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My Girlfriend is American but has been living out of the States for past 6-7 years. She has no plans to return or settle there at all. She is getting to the point where the Gov stops paying interest on her loans and needs to step up repayments and I was curious as to what could possibly happen if she just.. didn't? She doesn't seem to know. So does anyone know what the likely outcome would be? PS not looking for a moral lecture on this, obviously know it's quite heinous to just abandon debts but it's interesting to to know consequences from realistic POV.
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Feb 10, 2015 03:16
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Well, they won't extradite her and put her in a debtor's prison. I imagine it may harm her credit, although it may very well be a non issue depending on which country you are settled in.
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Feb 10, 2015 04:27
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It could have a negative impact on her ability to gain residency or citizenship in whichever country she is currently living.
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Feb 10, 2015 05:11
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Make sure your partner gets a bunch of sealed copies of their official transcripts from their colleges/universities before they stop paying.
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Feb 10, 2015 07:09
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Angry Hippo posted:Well, they won't extradite her and put her in a debtor's prison. I imagine it may harm her credit, although it may very well be a non issue depending on which country you are settled in. Be careful about that one.
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Feb 10, 2015 18:18
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drone strike
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Feb 10, 2015 18:43
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Adnar posted:My Girlfriend is American but has been living out of the States for past 6-7 years. To be clear, she has no plans to set foot on American soil ever for any reason for the next half century of her life (or whatever), including being in transit to some other country? Otherwise it sounds a heck of a risk.
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Feb 10, 2015 20:19
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Have you heard of Kim Dotcom?
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Feb 10, 2015 20:31
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It's laughably easy to walk away from non-government student loans. I assume her loans are government-issued (such as Sally Mae)?
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Feb 10, 2015 20:47
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Are student loans even a big deal anymore with income-based repayment? I mean my cousin's a nurse and she only pays like $60 a month on her student loans. If she doesn't pay them off completely in 20 years, she'll get them erased. I also know someone who dropped out of college with $70,000 in debt and he now started a small business and pays like $20 a month. I think the worst thing you can do is ignore them.
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Feb 11, 2015 18:50
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I have a number of friends who've permanently emigrated from their European home countries owing tends of thousands of euros of debt. Their credit rating in their home country was trashed, and civil (as opposed to criminal) proceedings were attempted - but failed when the 'guilty party' had no assets in the country to be seized. And after a number of years the debt expires, depending on the country's laws. They all had no problem going back to their home countries on holiday to visit relatives with police etc. And no cross border credit rating issues - any negative hit seemed to be only in their home country. This may apply to your girlfriend's US based debt or may not, but its definitely something you should look into further.
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Feb 11, 2015 21:32
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an adult beverage posted:Make sure your partner gets a bunch of sealed copies of their official transcripts from their colleges/universities before they stop paying. The university doesn't service the loan, why would they care.
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Feb 11, 2015 23:11
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feedmegin posted:To be clear, she has no plans to set foot on American soil ever for any reason for the next half century of her life (or whatever), including being in transit to some other country? It's not a huge risk if she flies through the US. The odds of a loan company putting enough force to get the TSA to care about a red flag is fairly slim. In context: I stopped paying on my student loans because I have no money. Outside of taking a credit hit and getting a call once a month from the collections agency, there's not much they can do. They can garnish income over X amount of dollars, but I've only seen one guy wind up with that and it was a guy with a 50k/yr job and like $200k in student loans that he wasn't even throwing a token $50 a month to. They eventually got a garnishment for like $200 a month only. Depending on the country, some countries I know can/will enforce foreign garnishments like that though. If there's proof of income and it's a willing refusal to pay, they may go after her for something like that, but beyond garnishments and angry letters, unless its a massive amount of debt, the odds of it negatively affecting her life if she stops paying is anywhere from "no problem at all" to "somewhat annoying headache to deal with".
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Feb 12, 2015 04:13
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tsa posted:The university doesn't service the loan, why would they care. They (consciously, not because they cant pay)stole something that costs tens of thousands to provide.
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Feb 12, 2015 06:53
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I mean sure but I've never heard of a college holding transcripts because you didn't pay your loans serviced by some third party. Also not paying loans back isn't stealing, but of course it is still wrong. tsa fucked around with this message at 15:15 on Feb 12, 2015 |
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Feb 12, 2015 15:12
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At this point, I'm inclined to say there's nothing wrong with not repaying student loans. They're rapacious, and the whole system is pretty appalling. gently caress those guys. Whatever wrong you can put on someone for not repaying them, you can put ten times that on the guys who are turning an entire generation of poor young people into sharecroppers.
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Feb 12, 2015 16:00
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Thanatosian posted:At this point, I'm inclined to say there's nothing wrong with not repaying student loans. They're rapacious, and the whole system is pretty appalling. There's a reason why the interest rates on student loans are so high. They are hilariously easy to walk away from if you really don't give a gently caress and you don't let yourself get intimidated into paying. What can they do if you don't pay anyway? It's not like a car loan or a mortgage; in those cases the bank has physical collateral. A bank can't take away your college degree. Yeah, they can sue you but they know it would be like squeezing blood from a rock and at most they'll get like a measly $50 a month. So most of the time the bank sells these defaulted student loans in bulk to third-party collections agencies for pennies on the dollar. Collections agencies are all bark and no bite. In the unlikely event that they actually start the process of taking you to court, they back off when you or your attorney request actual documentation that you owe the specific amount. Given that they bought a ton of written off accounts from X Bank in bulk, they don't have proof that YOU, YOUR name owes Y to Z. Most people get harassed or browbeaten by the collections agencies into paying up before this. Basically, the interest rates are so high because of people who don't pay. The banks feel like they have to make up for it somehow, so students taking out loans get punished for other students who defaulted. Obviously this doesn't apply to government student loans. The real issue is the cost of higher education in the States, but that's a whole different can of worms. Pixelated Dragon fucked around with this message at 17:03 on Feb 12, 2015 |
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Feb 12, 2015 16:20
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Adnar posted:My Girlfriend is American but has been living out of the States for past 6-7 years. For a five or six figure sum, I see no theoretical reason why they couldn't attempt to get a judgement against her in Australia or to domesticate a US judgement, assuming they have some idea where she is. She will presumably have signed a prom note and the lender or its assignee will be able to show she isn't paying. It's not really rocket science, it's a simple debt. They would probably then have similar options to a US lender with a US borrower. That said, for the reasons given by goons above perhaps they won't actually bother to do anything? Possibly she could get around her student loan obligations by declaring bankruptcy under Australian law - assuming she is able to do so. Under US law I gather student loan debts are still effectively non-dischargeable (i.e. it can be done, but you have to show up to court holding your own severed head under your arm and also your cat died), but under Australian law they may just be regular debts. Also, I assume she isn't part of or planning to be part of any regulated profession where she might have to declare that she decided to stiff her lenders? Finally, as Rent-A-Cop says, I hope she's already a citizen/naturalised or you have checked with her immigration lawyer that defaulting on her loans 100% isn't going to qualify her for a one way trip to that island you guys put the boat people on to die of malaria / Pauline Hanson's non-consensual S&M dungeon.
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Feb 12, 2015 18:12
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Pixelated Dragon posted:There's a reason why the interest rates on student loans are so high. They are hilariously easy to walk away from if you really don't give a gently caress and you don't let yourself get intimidated into paying. What can they do if you don't pay anyway? It's not like a car loan or a mortgage; in those cases the bank has physical collateral. A bank can't take away your college degree. Yeah, they can sue you but they know it would be like squeezing blood from a rock and at most they'll get like a measly $50 a month. I suppose you could ignore them, but your credit score will basically get raped and pillaged in the process. Good luck the next time you have to do anything that requires a credit check because you'll be up a poo poo creek without a paddle.
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Feb 12, 2015 20:59
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Captain Mog posted:I suppose you could ignore them, but your credit score will basically get raped and pillaged in the process. Good luck the next time you have to do anything that requires a credit check because you'll be up a poo poo creek without a paddle. True, it would send your credit score down the shitter. But that's not how people look at it when they feel like they just can't pay it anymore, I guess. I never took out student loans so I have no actual firsthand experience with this. I'm merely explaining why the interest rates are what they are. A bad credit score isn't a death sentence and the defaulted loan falls off the report after seven years of inactivity. Pixelated Dragon fucked around with this message at 21:06 on Feb 12, 2015 |
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Feb 12, 2015 21:04
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Pixelated Dragon posted:Basically, the interest rates are so high because of people who don't pay. The banks feel like they have to make up for it somehow, so students taking out loans get punished for other students who defaulted. Of course, most countries get around this problem by heavily subsidizing student loans so that they're affordable, or just pay for university studies entirely, because an educated populace is a public good. My personal recommendation to everyone regarding finances is to play the same game the banks do: it is not moral theater, it is pure cost/benefit analysis. If it is beneficial to you to not pay a loan off, then don't pay it off. It's not your fault that the creditor didn't establish sufficient collateral to make paying them off the better choice for you.
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Feb 12, 2015 22:13
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Pixelated Dragon posted:There's a reason why the interest rates on student loans are so high. They are hilariously easy to walk away from if you really don't give a gently caress and you don't let yourself get intimidated into paying. What can they do if you don't pay anyway? It's not like a car loan or a mortgage; in those cases the bank has physical collateral. A bank can't take away your college degree. Yeah, they can sue you but they know it would be like squeezing blood from a rock and at most they'll get like a measly $50 a month. Uh what? Hope you don't have an income worth garnishing because they'll absolutely go after you if you owe enough. I also doubt they are sold for pennies on the dollar like CC debt because it doesn't go away after x years. I mean I guess if you plan on making pennies your entire life you'll "win" but more than likely they are eventually getting their money, with penalties and interest. tsa fucked around with this message at 01:27 on Feb 13, 2015 |
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Feb 13, 2015 01:23
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tsa posted:Uh what? Hope you don't have an income worth garnishing because they'll absolutely go after you if you owe enough. I also doubt they are sold for pennies on the dollar like CC debt because it doesn't go away after x years. Are you talking about government students loans? They can automatically start garnishing your wages if you default on those, yeah. Otherwise there must be a judgement against you. Many unpaid student loans get written off and passed along to third party collections agencies. Some major banks are notorious for just handing student loan accounts off to third party collections agencies after even a couple months of non-payment, and some will hold onto them for longer. Whether it's credit card debt or student loan debt from a non-governmental financial institution, there's a statute of limitations on debt collection in every state. Pixelated Dragon fucked around with this message at 01:46 on Feb 13, 2015 |
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Feb 13, 2015 01:42
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I thought people were barred from collecting social security if they had student loans. If thats true we will see poor house seniors in 60 years.
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Feb 13, 2015 02:07
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feedmegin posted:To be clear, she has no plans to set foot on American soil ever for any reason for the next half century of her life (or whatever), including being in transit to some other country? No I'm sure she'll enter the country, but I doubt they're sweeping passport control for this type of thing. She has European passport and will likely be emigrating to Australia (my country) soon. Thanks for the advice and differing opinions. The figure isn't large (around the 10-15k mark) so it will probably be easier to make arrangements one way or another but you know.. the money would be nicer
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Feb 13, 2015 05:18
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Adnar posted:She has European passport and will likely be emigrating to Australia (my country) soon.
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Feb 13, 2015 05:49
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Adnar posted:No I'm sure she'll enter the country, but I doubt they're sweeping passport control for this type of thing. This will gently caress her immigration. Countries dont like taking in new prospective immigrants deliberately skipping out on large loans because you'll just do the same poo poo here. RonMexicosPitbull fucked around with this message at 06:18 on Feb 13, 2015 |
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Feb 13, 2015 05:59
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Captain Mog posted:I suppose you could ignore them, but your credit score will basically get raped and pillaged in the process. Good luck the next time you have to do anything that requires a credit check because you'll be up a poo poo creek without a paddle. When you don't live in the US, US credit score is meaningless. I incurred a five-figure medical debt from an ER visit in America three years ago (passed out and was taken to a hospital not covered by my insurance.) I haven't paid a single dollar since and it has had zero impact on my credit score outside the US, or my life in general. However, if immigration was involved, you should really talk to a lawyer.
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Feb 13, 2015 06:15
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Does Australia use the same big three American credit bureaus?
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Feb 13, 2015 10:04
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Adnar posted:No I'm sure she'll enter the country, but I doubt they're sweeping passport control for this type of thing. Has she tried calling the loan company? You can negotiate with loan companies. If the terms can't work for her current situation, it's worth at least calling them and starting a discussion.
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Feb 13, 2015 16:19
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RonMexicosPitbull posted:This will gently caress her immigration. Countries dont like taking in new prospective immigrants deliberately skipping out on large loans because you'll just do the same poo poo here. What countries do credit checks? Many want a criminal background check from your country of origin (ie. an FBI background check in the US) but that doesn't include any civil financial stuff.
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Feb 13, 2015 21:49
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Is an income-based repayment plan not an option for her? If she's not in the US, or working somehow for an entity in the US, she has zero taxable income, so her payments would be $0. Interest would still accrue, but it doesn't seem like that a big concern of hers, so...
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Feb 14, 2015 03:10
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RonMexicosPitbull posted:This will gently caress her immigration. Countries dont like taking in new prospective immigrants deliberately skipping out on large loans because you'll just do the same poo poo here. Perhaps I missed it, but is this a federal FAFSA loan? They never expire. I know a few people who fell behind and then stopped paying their FAFSA federal studen loan in Asia, where I live. Posters have mentioned the bad credit / bad loan hindering immigration. I'm not sure if that's the case, but it can be googled I'm sure. With a sum of $10-15K USD, she could keep paying the minimum, go through the citizenship process, and then just stop paying. Just curious, adnar, why does she never want to set foot in the US again, even to visit family or travel?
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Feb 14, 2015 07:40
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What the hell? 10-15k is dropped down pretty significantly with Income Based Repayment or any of the myriad other payment options. I mean, the system is hosed and all, but it's not like she's one of those grad students saddled with 60+k in debt.
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Feb 14, 2015 09:14
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FilthyImp posted:What the hell? 10-15k is dropped down pretty significantly with Income Based Repayment or any of the myriad other payment options. They aren't too poor to pay. They're just thieves. This thread is "are there going to be any actual consequences to our theft if we are in a different country?"
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Feb 14, 2015 09:22
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RonMexicosPitbull posted:They aren't too poor to pay. They're just thieves. it's not theft...both parties entered into a willing contract. the money was freely given. one party just reneged on their terms of repayment. there's a reason there's such a thing as a debtors prison...they have never been lumped in with thieves, not anywhere that i know of. i think even nasty ol' dubai treats it differently.
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Feb 14, 2015 10:48
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Tautologicus posted:it's not theft...both parties entered into a willing contract. the money was freely given. one party just reneged on their terms of repayment. there's a reason there's such a thing as a debtors prison...they have never been lumped in with thieves, not anywhere that i know of. i think even nasty ol' dubai treats it differently. I think you are missing the point.
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Feb 14, 2015 10:50
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RonMexicosPitbull posted:I think you are missing the point. that it's a Bad Thing? I don't really care to argue about that. It's certainly not Right and Just to not repay money that you willingly borrowed. I'm just saying it's not theft. But what if the terms were extortionate? Do you have some kind of moral obligation to be extorted, or any obligation at all? Payday loans at 50% interest for example?
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Feb 14, 2015 10:56
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Positive Optimyst posted:Just curious, adnar, why does she never want to set foot in the US again, even to visit family or travel? yeah definitely We're not going down this path but I was curious of the consequences, particularly if we wait to cut a deal with a debt collector after the debt sours. She's also been a bit hosed because a lot of the money she was saving to put on it has been made in Hungary where the local currency has taken a 30% dive in the past year which is a bit frustrating.
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Feb 14, 2015 13:00
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Positive Optimyst posted:Perhaps I missed it, but is this a federal FAFSA loan? They never expire. Neither do private education loans anymore, either. They haven't since 2004(?), and they have all the same wage garnishment rights that federal loans have. The only difference in that regard is that they need a court order to start it, whereas federal loans will automatically initiate garnishment of wages, tax returns, etc. Federal loans will also garnish any social security checks up to the interest owed on it, whereas private loans need the court order to grant that one separately. Neither one can be voided in bankruptcy except through the undue hardship rulings, which are more or less impossible to get these days anyway. There is also the death clause (provided you don't have a co-signer), but suicide probably isn't quite the solution she's looking for.  Oh - and if the private loan holder decides to forgive your debt and write it off when they can't collect (or the collection agency if they sell it off to someone else), it will be reported as income for you and the IRS will come after the tax bill. The lender may not be able to gently caress you over super hard, but the IRS absolutely can. Honestly - if you're talking $10-15K, it's not worth the problems it'll cause you. Just pay the damned thing off. Sundae fucked around with this message at 19:16 on Feb 14, 2015 |
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Feb 14, 2015 19:14
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