Question:
Dear Steve,
I attended University in USA -paid out of state tuition for 1 year and then in-state for the next 3.5 years. Spent one semester in Australia in a study abroad program at Bond University. I have debt of 120,000 usd through Navient, that I have consolidated. And 40,000 usd with federal. These were taken out for school payments, books, and living expenses. Out of college I was working as a graphic designer for 10 usd/hr. In 2013 I moved to Vietnam where I have since got my teaching certificate and am a primary school teacher. I have lived in Vietnam for 4.5 years.
I was paying student loans to Navient in the amount of about $550/month for over 2 years and saw ZERO progress on principle balance. I have also started to receive calls at my place of work, and have explicitly told them it is forbidden.
No one is a co-signer on my loans.
What are my options?
Is it feasible to wait until the statute of limitations runs out and then declare Bankruptcy? I don’t have any other debt besides my student loan debt. I am not too worried about my credit score and I have no plans to buy a house/car in the near or distant long term future. However, I do not want to be harassed at my job or my family to be harassed. I plan on moving to another country next year around March. I don’t think they can sue me as I visit home rarely so it would be quite difficult to find me.
If it helps bankruptcy matters at all, my mother is a single mother to 3 kids and is in a wheelchair as she is paralyzed from the waist down. She makes good money but supports her children as well as numerous medical bills.
Thanks for any help~
Leigh
Answer:
Dear Leigh,
The federal student loans are easy to silence. Just consolidate them into a Direct Loan and elect an income driven repayment plan to repay them with. It’s not a magic bullet but it will silence the loans. There is no statute of limitations with federal loans. After 20-25 years your loan balances will be larger but may be forgiven.
On the private loans you would need to stop paying them to get the Statute of Limitations to run out. Stopping payment on your unaffordable private loans is not illogical when they won’t work with you but it is not without consequences or risk.
When you stop paying you will wind up in more aggressive collections and you may be sued at your last know address in the United States. However the bigger issue is as long as you are outside the U.S. the Statute of Limitations is on hold and the time does not count.
That being said, let me quote from this site, “That being said, a creditor can only use tolling as a defense to an out-of-statute lawsuit if the creditor knows that you left the country. One of the primary ways creditors find out that you are living abroad is by your forwarding address. Keep in mind that these companies want to track you down, and if you’ve given your friends, family, current creditors and the post office your new international address, its a fair bet that the collection agency will have it before long. Remember, debt collectors can call your family members in an effort to locate you. Although collection agents aren’t supposed to lie to your loved ones, it happens all the time and your brother/sister/cousin might be more than happy to give your long-lost “friend” your new contact information.”
If you could manage to get past the time required for the Statute of Limitations to run you could file bankruptcy and you’d need to see if Navient raised your out of country time as a reason why they should not be discharged.
All of this being said, in tricky situations like this there is absolutely no substitute for legal advice from a lawyer who is licensed in the last state you lived in, since that’s where you are most likely to get sued. I am not a lawyer and can’t give you anything close to legal advice.
A telephone appointment now with a lawyer to come up with a plan of action to deal with your potential Statute of Limitation issue and possible Fair Debt Collection Practice Act violations would be money well spent.
