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Can't Pay Colossal Student Loans and Living Overseas

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  • 09-27-2010, 01:19 PM
    julie.l
    Can't Pay Colossal Student Loans and Living Overseas
    Hello, I would really appreciate some help, given I'm at my wit's end:

    I have 10 different student loans, some federal, most private (owned by a variety of banks), managed by 3 different loan servicers. The total of my current loans amounts to $350,000. This is unfortunately not unusual for the type of education path I chose. The guarantors for all these loans are various banks that they chose themselves.

    I have both an American citizenship, plus an Eastern European country citizenship.

    I have recently returned to my Eastern European country, because of family reasons (I have to take care of my parents). My original plans were to work in the US and repay the loans over 20 years. However, that is now impossible.

    I have paid back my loans regularly for a few years now, although I have deferred and had some in forbearance. I cannot even begin to pay back the full amount they calculated I would have to pay in order to pay back my loans sensibly (over $2,500 a month). The average pay here is less than $1000 a month. I don't have a job yet anyway, and my family is far from rich.

    Many of my loans are going out of forbearance soon, and I simply cannot pay back my loans anymore. All my loans plans so far have been on the lowest possible monthly repayment plan anyway.

    I own nothing in America and I own nothing here and have no savings left.

    Therefore, my questions to you are:

    1. If I default on my loans do I get sued in America? Can they sue me if I am not there? (I can't even afford the ticket to go there anyway).

    2. If they do sue me, do they have to serve me legal papers where I currently reside (Eastern Europe), in order for the lawsuit to be completed?

    3. If they do get a judgement against me, can they use that against me in Eastern Europe? If they can, what are the chances that this is worth it for them, given I have nothing for them to take?

    4. What is the extent of their power over me and my family outside the US?

    5. Can I file for bankruptcy based on my current situation, and if so, do I have to reside in the US in order to be able to do that?

    6. If I get a judgement against me in my country can I file for bankruptcy in the Eastern European country then?

    Thank you so much, I am obviously desperate and getting all sorts of stress related illnesses...*sigh*
  • 09-27-2010, 06:27 PM
    KeithDoxen
    Re: Can't Pay Colossal Student Loans and Living Overseas
    Student loans cannot be discharged in bankruptcy. Unfortunately I don't have answers to any of your other questions but hopefully others will.
  • 09-27-2010, 08:18 PM
    Mr. Knowitall
    Re: Can't Pay Colossal Student Loans and Living Overseas
    It's conceivable that a creditor might try to sue you at your last known address and end up serving you by "substituted service" then getting a default judgment. It's not outside the realm of possibility that you might be served where you presently are.

    Given the amounts involved, it's conceivable that a creditor might try to pursue you in your nation of origin.

    Whatever judgment is obtained would have to be enforced through the courts of whatever country you're in at the time the creditor attempts enforcement.

    You can't declare bankruptcy in the U.S. if you're not domiciled in the U.S., even if we assume that some of your loans would be dischargeable in bankruptcy.
  • 11-20-2010, 03:03 PM
    LuckyBlackDragon
    Re: Can't Pay Colossal Student Loans and Living Overseas
    Hi julie,

    I'm in a similar situation right now. Please red this post:
    http://www.expertlaw.com/forums/showthread.php?t=73613

    After the research I have done and my experience so far, I can tell you that once your debts are gone to a collection agency, they will start harassing you wherever in the world you are. That means calling you at your mobile, home, work, trying to get to your boss, etc.

    It's a lot of money and they will try hard to get it back. They are also able to sue you and get a default judgment; however, it's not very likely that this could be the case, given that there is nothing you own in the US that they can go after, and suing is not free. In fact, you could delay procedures a lot my using some simple legal tactics (like asking them in written a proof that you owe them; most likely it will take them months before they get all proper documentation). If they sue you and win, it is not possible for them to enforce anything on your home country, like taking properties or garnishing your wage; they would have to go all the way there again, suing you and winning a case. But the most likely result of that would be that a judge in your country would dismiss the case just because it is outside of its jurisdiction. Also, your lawyer can argue that you have been judged for the same thing in the US; that would make the case dead almost automatically. For being able to chase you at home, they would be better off not doing anything on the US and suing you right at your country, something too complicated and more than anything else, uncertain and expensive to be worth.

    My advice would be: act always in good faith, deal with the collection agencies once they appear (they will find you no matter what), give them your true financial situation, contact info and start negotiating with them. You may end up paying a lot less.

    I just started that process and got a 20% off offer if I repayed immediately. I also got an offer to make a 5% downpayment and pay the rest in monthly installments during 9 years. I expect to be able to do way better than that.

    PM me if you would like to get in touch and exchange experiences.

    Good luck and take care,

    LuckyB.
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