I immigrated to another country a year ago and I owe around $165,000 in student loans. I see that a couple of people posted comments regarding passport renewal and wanted to let you know that my passport expired and I just got my passport renewed. There was no problem with it at all. One thing that I’m getting ready to do that some of you might want to think about. If you pay a small amount, even $25 or $50, they can’t do anything to you. If they try to take you to court, there will be evidence that you have tried to pay something. Since an effort is being made they can’t do anything to you. Regarding my other debts, which aren’t actually very bad, I plan to file bankruptcy. It seems that I will be getting a US job in a couple of months and once I reestablish residency I will be able to file within 6 months. I plan to keep my place abroad and travel back and forth a couple of times per year. That will cost a huge chunk and will leave me with a low income, but it is worth it. I love where I live now and am glad I have an opportunity to try to get this taken care of a little at a time.
That is a common myth that is absolutely incorrect. If you are paying less than what you are obligated, you are in breach of your contract and they can absolutely seek recourse (whether they will want to bother is another story).
Yep—they’re making enough on us saps that pay on time and in full to let a certain percentage of the rest of you slide.
So your friend is angry at a school, so he’ll default on his loans, thus screwing over other students who need loans? Glad he’s not my doctor.
They are dischargeable, not the requirements are much tighter than for other types of debt.
Quoting this post below for truth:
And repeating my own post from earlier:
As mentioned above, it is possible to be sent to jail over a debt - if there is a Court Order that you pay, and you refuse, you can be found in criminal Contempt of Court - a jailable offense.
I have no idea how often this happens, or even if it has ever happened, but if they can nail a “Used Furniture Dealer”* over Federal tax code, I wouldn’t care to push the issue.
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- this is what Al Capone’s business cards read. Or so goes the story. I never saw one.
To pick a nit, you’re not one of the saps they’re making money on. A debt paid off on time and in full is (theoretically) only minimally more profitable than a debt which is never collected at all (it just doesn’t represent a loss): Profit in lending comes from the people who only pay the minimum or less every period, allowing interest to accrue and letting the debt work for a while before being retired. Those people end up paying BMW prices for Ford vehicles.
Of course, they’re also the ones who lose their jobs at the drop of a hat and end up losing their shitbox Ford soon after, representing a loss after all. But high-yield debt is always risky. That’s why it’s high-yield.
Gives the nit a friendly pat on the head True, but I meant in terms of not being late on the monthly payment. They’re making tens of thousands off me in interest over the course of my 30-year loan repayment schedule, but not nearly as much as if I were to miss a payment and pay penalties and lose my interest rate. (Currently 2.875%—in years with high inflation, they actually lose money on me!)
We had a few clients that came in from the US with debts well over 100K. Since US citizens have to file bank and tax statements (every year?) and pay anything beyond local taxes, there was quite some incentive to find ways to make sure our clients were liberated from these excessive debts and we became quite creative doing so. This didn’t just extend to student debts - also delinquent other bills, child support and alimony signified a heavy financial burden for these people and they made a cost-effort analysis to resolve these burdens and, effectively, walk away from them.
Back in the 90s and early oughts we found that “constructs” would work quite well if people had debts over 120.000 US$. At those rates creating contrivances to “not have to pay” would make sense. One client of us came in with a much younger Dutch wife, child support, a California alimony and massive student debts. That created for us a near perfect situation to work with, but the entire project hinged on trust - the guy would have to be able to trust his wife.
First they "on the papers"moved to Belgium and we got them a registered address there. Then they moved to another European country, and then another. They never unresistered effectively each time, leaving high barriers for finding the couple in question. Next all assets they generated in the Netherlands were left in the wife’s name. The man was an Engineer, and had started over twice in his studies, leaving the unbearable debt. After he vanished from the grid he started to fudge his official registrations in various places, creating additional burdens. Faking an address in several Europen countries is not really all that expensive - just a few hundred euro per country. Based on his engineering degree the guy made money building, designing and selling parts of luxury yachts. In this capacity he made a decent living, and his business activities were kept of the books. His wife owned the yachting business, but we made sure she wouldn’t do anything fancy, such as max out credit cards or anything like that.
At some point we started generating rumors of the persons death, and we even faked newspaper articles to that effect. Each time it became progressively more difficult to disentangle fact from fiction. After eight years our client had one European passports and a Swiss passport, based on his young wife’s respective double nationalities. After eight years the total amount of debt claims in the US were exceeding a million.
Since he now operated under European passports he long since stopped filing taxes, and whatever could be traced locally involved very low on-the-book incomes. For the years I had him as a client he officially made barely more than minimum wage, which wouldn’t even have allowed garnishment over here, since he had all these on-the-book medical expenses. As far as I understand authorities in the US had completely stopped trying after 4 years.
I met him in the area last year. He had two heart attacks and is morbidly obese. He is still with his younger wife, and he probably makes enough in a few years to completely pay off his US debts (which might be a few millions, if someone ever bother to do the maths) but since they have a very high octane luxurious lifestyle I don’t think they’ll get around to that.
If this bomb bursts it might create for considerable problems for him. If the authorities in the US actually get the idea he is still alive, and actually quite affluent (or maybe automated systems catch up on him, or he makes a mistake somewhere) the system will go after him by whatever means it can. But by now the couple constructed so many barriers for garnishment I fear the US authorities that would manage all disparate debts wouldn’t even bother.
In his case, the investment and time and money should have been worth it, since he avoided paying millions in taxes, child support, alimony and his sizable debts. Without even counting the interest. I believe he made a calculated and rational choice, and I believe for people in the same position they could very well make the same choices.
But most people can’t, and I find that many Americans live fairly poor lives because all the debts burdening them down. I feel we live in a society where much of these debts are artifacts of unreasonable and excessively leveraged money infrastructures. The debts are as such unreasonably high in nearly all cases, but that’s just how I feel about it.
I don’t care about the US tax system and it’s debts. They only need to not wage a few wars and they would easily do better. If we only had more competent and less wasteful politicians in charge in various countries people would feel less burdened and have less incentive to go through all the intricacies to actually have some measure of normal livelihoods.
I probably made about 70.000 euro on managing this client over the years, so the project has not been particularly awful for myself as well. My investment of time and expertise has saved him many times that money.
Do you care that you helped him evade child support for a child he produced and is responsible for?
Or does, “He grew tired of the onerous financial responsibility and could afford a good lawyer,” somehow make all that okay?
The Dutch solution sounds far too complex.
Still, what happens if you owe debts in one country and go bankrupt in another? I assume the debt is no longer enforceable in the new country, but the US may not follow the other country’s ruling.
Plus, I’m not sure the logic - AFAIK the student loans are from various financial institutions, not the university; the university has already been paid. Not paying your debt is screwing the rest of the system, the administration at the school is oblivious.
(The only way it hurts is if something like 33% of students are in default - then the government gets on their ass about default rates. 3 years over that limit and their students can’t qualify for loans).
I recall some discussion about student loan discharge. IIRC the clause said discharge could happen on bankruptcy if there was no possibility of repayment. In one case, the judge asked the lawyer “any hope whatsoever of repayment?” The lawyer answers “The only way would be if my client wins the lottery.” The judge says “so there’s always a possibility of repayment, however slim. No discharge.”
I’m not sure I understand the “no passport” scenario for someone living abroad. Maybe the government would refuse to provide a passport for someone inside the USA, but essentially don’t your citizens abroad NEED a passport? It’s not like it’s an optional thing. In some countries you need the form of identification for a lot more than crossing borders, and refusing a passport would seem to be tantamount to disowning the person as a citizen - not something that’s going to happen over outstanding debt.
Student-loan debt is not forgiven under bankruptcies. You still have to pay it.
That’s my point - under American law it is not forgiven. Presumably if you go bankrupt if Fredonia, it wipes out the debt since it dos not recognize US bankruptcy provisions; other countries have no such provisions, meaning that the US entity cannot attempt to collect except in the USA?
Oh, I see. But how hard do they try to collect anyway if someone is outside the borders? Do they just sit and wait for them to return to America? I’ve never heard of anyone in Thailand get hassled while here for American debts even though it’s cheap enough to hire a motorcycle taxi driver to, um, “have a chat” with someone.
If I am reading your post correctly, then you’ve made 70,000 Euro helping someone commit fraud. The U.S. government doesn’t really care about your debts.
Wouldn’t student loan debt still be covered under statutes of limitations? If they don’t find the guy to sue him within a set time, would the debt be unenforceable?
Moderator Note
Welcome to the SDMB, Khannea.
I am not a lawyer, but it seems to me that what you have posted would be a clear violation of U.S. law. These types of discussions are not permitted here.
From the SDMB registration agreement:
Since you are new, I am just going to give this a mod note and not an actual warning. Let’s have no more of this sort of thing here.
So not only did his children not receive any financial support from him, he completely abandoned them emotionally as well, leaving them unsure whether he was dead or alive, and certain that he cared nothing for them.
This may be one of the saddest stories I have ever read on the Dope.
Easily traceable by the US authorities, too - how many dutch-american may-December marriages with an engineer, and being in the high-end yacht business, can there be? With outstanding debt, yada yada. It really sounds like pure BS, but if not, there’s way too much detail in here.