Does debtor's prison still exist?
October 25, 2006 5:27 AM   Subscribe

An American friend of mine who is also an expat in France is going home to visit his family for Christmas this year. The problem is he is in default on his federal school loans.

He is afraid he's going to get arrested at customs. Is this a possibility? He owes over 10k dollars, and his mom told him a federal marshall came to the family house looking for him 6 months ago.

Yes, I've told him he needs to pay up and he intends to, but he's not in a situation where he could comfortably start paying before Christmas. He also says he doesn't fit into any categories where he could get loan forgiveness, forbearance, etc.

Thanks for any help you can give him - he is a mefi reader but not member, and will be reading along. I can post follow-ups for him as necessary.
posted by hazyjane to Work & Money (17 answers total) 3 users marked this as a favorite
If he truly intends to pay up, he should start the dialogue now with whomever is in charge of negotiating payments. That way, he can establish intent and maybe get the warrant off his back. If it really was a federal marshal who showed up at his mother's door, I would be leery of going through customs. Maybe fly to Canada and then drive across the border?
posted by JohnnyGunn at 5:53 AM on October 25, 2006

They actually send federal marshalls out on student loan defaults ? Is that the only issue ? At any rate, if the Feds are looking for him, I would think the odds are, they will find him. Perhaps he can make first contact, and start some sort of payment plan, however small, to get them off his ass.
posted by lobstah at 5:57 AM on October 25, 2006

My initial reacion to 'Federal Marshalls go after student loan defaulters' was "bullshit" but a quick Google search indicates that it's true. All he has to do is contact the agency, work out a payment plan that starts after the first of next year and viola.
posted by fixedgear at 6:08 AM on October 25, 2006

Is he in a situation where his family could lend him the money (perhaps they could get a $10K home equity loan or something) to pay off the debt? I would think a family wouldn't want one of their relatives to actually be in exile over unpaid student loans.

I imagine the grind of having to do things like go into Canada and then drive across the border and travel to where ever he's from would get pretty tiring (I'm guessing if it's bad enough that marshals are looking for him, he wouldn't actually want to enter the US by plane, since they scan your passport these days).

But he should probably look for a solution that would allow him to be out of trouble now, rather than a "I'll figure it out after Christmas" plan, which is kind of a dodge.

Funny family story: I once had State Police after me because I stupidly failed to report to the Police station with my license after being pulled over without my wallet. At the time I was renting an apartment in the same building as my grandmother, who I share a last name with.

When the police showed up with the warrant for my arrest, they mistakenly went to my grandmother's apartment on another floor to ask for me. My sweet, honest, church-going Grandmother looked those police dead in the face and not being able to think of anything else said "Oh he skipped town 6 months ago-we think he might have gone out west. If you find him tell him I love him and to give me a call, because I'm worried."

(luckily I was able to clear it up by going to the State police, acting very very sorry and paying a nominal fine.)
posted by illovich at 6:19 AM on October 25, 2006 [3 favorites]

In answer to the question title, apparently debtor's prison does still exist, at least for unpaid state tax in some states. I don't know about federal debts, though.
posted by footnote at 6:30 AM on October 25, 2006

I'm no lawyer/debt wizard, but I'd be astonished if that was actually a federal marshall. Unless he (or his mother or the "federal marshall") is not being truthful about why a federal marshall would be looking for him, the sum of his offenses seems to be that he defaulted on a debt.
Debtors' prison does not exist anymore. A cursory googling suggests the practice was eliminated in the USA around 1833. So, unless there's something else going on here, the worst thing that will happen is that he'll move back to America some day and want to buy a house, car, etc. and not be able to because his credit sucks.
On preview: not paying your taxes is a crime, footnote. That's not quite the same thing as being imprisoned for not paying any old debt.
posted by willpie at 6:37 AM on October 25, 2006

Sigh. Doesn't anybody read what I write?

posted by fixedgear at 6:49 AM on October 25, 2006

no, fixedgear, no one reads links around here. ;)

Can't comfortably pay before christmas? No offense, but your friend needs to step up to the plate and pay his debts - deby it rarely comfortable. If he can afford a December ticket to France, he can afford the $100 a month the feds would gladly establish as a basic repayment plan. I know family is important to some folks, but so is paying off accrued debt (especially debt that can apparently get you arrested.)
posted by jmgorman at 6:59 AM on October 25, 2006

> is rarely comfortable. Sorry y'all
posted by jmgorman at 7:01 AM on October 25, 2006

Most likely someone (marshall, anyone) paid to serve papers from the collection company using U.S. District Courts, in an attempt to collect, which they are doing now. He'll most likely end up with a judgement against him, listed in his credit file, if he doesn't pay the debt in full, at a discount, usually.
posted by cjburton at 7:19 AM on October 25, 2006

i've got a few friends in default that dont have feds pounding at the door, just real shitty credit, and i see nothing about federal marshall's enforcing loan payments on the student loan website.
posted by yeahyeahyeahwhoo at 7:43 AM on October 25, 2006

A friend was in this exact situation (except for the Marshall visit) a couple years back. They let him setup a repayment plan, no problem. I think the payment was under $100/mo. The feds just want to see any legitimate attempt to repay.
posted by nakedcodemonkey at 9:41 AM on October 25, 2006

Just a tip for when he does begin to repay: Make it a condition of repayment that they take the default off your record. I had to do a direct debit for a year & not be late, then voila: no record. Really, the government will make a nice deal.
posted by dame at 10:03 AM on October 25, 2006 [2 favorites]

Good point, dame. My buddy had to keep up the ontime payments a bit longer (2 years, I think?) but did get a similar deal to yours. If I recall correctly, his eligibility for forbearance, consolidation, etc. was also restored at that point.
posted by nakedcodemonkey at 10:28 AM on October 25, 2006

Yep, all that was restored, too. As soon as I was in good again, I consolidated and dialed down my payments, too.
posted by dame at 11:26 AM on October 25, 2006

I have nothing to add wrt: Federal Marshalls vs. lying bill collectors but if he's working in France he's still gotta file Federal tax returns.

On a accounta the US is one of the few countries in the world that taxes on the basis of citizenship, not residency. So if The Feds do grab his ass, he better not let them know he's working in France (if he is).
posted by Mutant at 11:39 AM on October 25, 2006

Response by poster: Thanks to everyone who responded. My friend did some research too by calling the student loan people anonymously. They told him that they would not stop him at the border, and they also talked about a loan rehabilitation program whereby his credit could be wiped clean, as dame and nakedcodemonkey mentioned. So hopefully he'll get going on the right path soon, and in the meantime he can enjoy Christmas outside of a jail cell.
posted by hazyjane at 5:29 AM on October 26, 2006

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