The Fair Debt Collection Practices Act (FDCPA) outlines behaviors that debt collection agencies are and aren’t allowed to take while pursuing an unpaid debt. One of the ways the debt collectors violate the FDCPA is by threatening jail time. Although going to jail for debt used to be fairly common, debtor’s prison is mostly a thing of the past. However, in unique circumstances, certain states still allow debt-related jail time.
If you have outstanding student loans that are unpaid or you have been regularly missing your monthly payments, take a hold of your situation sooner rather than later. There are actions you can take to protect yourself and enter a loan repayment situation that is suitable for you. Consulting with a skilled student loan debt lawyer is the best way to ensure you are protected from the practices and threats of debt collectors.
Can I Be Arrested for Failing to Pay Back Student Loans in AZ?
Approximately 30% of U.S. states have policies that allow borrowers to face jail time for unpaid debts. Arizona is included in this group of states. However, simply having outstanding debt is not enough to go behind bars. In fact, as a debtor, you would have to take a series of actions—or lack thereof—before you would be considered eligible to face jail time. For example, the sequence of being arrested for debt is usually as follows:
- You don’t pay your bill or make your monthly payments
- Your lender pursues legal action against you
- You fail to show up in court on your scheduled court date
- The court issues you a fine for failing to show up for your hearing
- You do not comply with the court order and fine
- You face jail time for failing to follow court orders
While your debt may technically be the origin of why you are being sentenced to jail time, the real reason is a failure to show up for your court date and pay the court-ordered fine.
How to Avoid Going to Jail for Your Debt
Going to jail for student loan debt is extremely uncommon. Most debt-related jail sentences are issued to individuals who hold tax debt or have failed to make child support payments. However, as a debtor, it’s still important to steer clear of situations in which you could potentially face jail time. To avoid setting yourself up for a bad situation, take the following actions:
- Don’t violate court orders. Ultimately, the primary reason you could go to jail for unpaid debts is failing to uphold a court order. Therefore, if your lender sues you, it is imperative to show up in court and pay any associated fines.
- Don’t skip your debtor’s examination. A debtor’s examination occurs when a creditor orders you to come to court after obtaining a judgment. During this examination, you will need to answer questions regarding your finances and provide reasoning as to why you are not paying your debt.
It can be extremely overwhelming to deal with mounting student loan payments when you lack resources and income. However, instead of procrastinating and avoiding your financial situation, it is essential for your long-term financial health to take action as soon as possible. One action you can take that will eliminate some of the stress is educating yourself on your rights through the FDCPA.
Knowing Your Rights
Debt collection agencies and companies can take certain legal actions against you to try to collect money on unpaid debts. For example, debt collectors are allowed to sue you and garnish your wages if they obtain a judgment and a court order. This is why it’s imperative to understand your rights and the communication measures a debt collector is and isn’t allowed to take.
Unfortunately, debt collectors have a reputation for violating the procedures they are legally required to follow under the FDCPA. Under this federal law, debt collectors are required to act professionally and are prohibited from engaging in any abusive, unfair, deceptive, or threatening behavior. Additionally, the FDCPA outlines specific hours during which a debt collector is allowed to call you and prohibits them from repeatedly calling your home or place of employment in a harassment-like manner.
If you are experiencing any of these illegal behaviors from a debt collector, report them to the Federal Trade Commission and seek legal help from an attorney.
Working with Your Lender to Avoid Jail Time
In addition to educating yourself on your rights under the FDCPA, another action you can take is to work with your lender to find a manageable repayment situation. As a borrower, you have several options for dealing with your student loans when you can’t afford your payments. Like with most things, being proactive and taking agency in your situation can help you avoid a disaster. As soon as you foresee struggling to pay your student loans, it’s best to notify your lender and try to work something out.
Three options that could prevent you from defaulting on both private and federal loans include deferment, forbearance, and income-driven repayment plans.
- Going into deferment on your student loans allows you to stop making payments for a set amount of time. Depending on the type of loans you have, interest may continue to accrue.
- When your loans go into forbearance, they are placed on hold for a specific amount of time. Unlike deferment, interest continues to accrue, regardless of the kind of loan.
- Income-driven repayment plans cap your monthly payments at a percentage of your monthly income. This means that in periods where you are unemployed or have minimal income, your monthly payment will be very low.
Meeting with a student loan attorney is the best way to determine which of these three options is the best for you and your financial situation.
Contact a Skilled Arizona Student Loan Lawyer
At McCarthy Law, our attorneys are dedicated to helping students pay off their student loans. Under our student loan debt settlement program, our experienced attorneys negotiate with lenders to fight for our clients to pay only a fraction of their original loan balance.
To schedule a consultation with one of our skilled student loan settlement attorneys or paralegals, call (855) 976-5777 or fill out our online contact form.