I took out $12,000 of student loans in the late 80's (which are evidently federal since it is the US Dept of Educ that is bothering me). I moved to Canada shortly after and I am still in Canada.

I filed for bankruptcy in 1995 in Canada. The student loans are listed (along with dept store credit cards, Macy, JC Penny etc). The credit card debts were discharged and I did not ever hear from the student loan people...until last year.

They sent letters to my parents. I wrote back and gave them my Canadian address. I sent them a copy of my discharge papers. They held a hearing but informed me that a Canadian court has no jurisdiction. I know this is true BUT I also know that the two countries most often honor each other's judgments (usually when it is that country's favor to do so!)

The amount now owing is almost $32,000...OUCH!

One letter said "we have been authorized to substantially reduce the amount on the above-referred account and cease any further collecction efforts if you account is paid in full." Does anyone know how much "substantially" is?

I am not sure what to do. I would like to move back to the States in the future. I know they cannot touch me here in Canada but I am really missing home.

I attempted to get a copy of my USA credit report. None of the three agencies could give me one. I am not in the system...at all. No bad credit, just no credit history. Does that seem weird to anyone? I gave them my ssn and nothing.

Where do I go from here?

Also, does the fact that I have been a full time University Student for the past five years make any difference? I just graduated 6 months ago.

Thanks.

Like I said before, there is no SOL for federally-backed SLs. They have a lot of tools at their disposal, too -- they can garnish your wages and take your tax returns without going to court first (those are obviously only applicable to you when/if you move back to the States!) and they can sue you. You are also ineligible for other federally-backed aid (including additional student loans, FHA mortgages, etc.) while you are in default. Again, a lot of this isn't applicable to you while you're living outside the country, but would if you decide to move back. Your best bet is probably contacting whoever holds your loans now (if you don't know, you can check the NSLDS database -- there's a link on the "important links" stickie at the top of this forum. You'll need a PIN, but you can request one via e-mail now and you'll get it in a day or two) and see if you can work something out. If you can't reach an acceptable settlement amount that you can afford in one lump sum, you can talk to them about consolidation. I could be wrong, but don't think you have to be living in the U.S. to receive one. These are not credit-based and in order to consolidate while in default, you just have to participate in the income-contingent repayment plan. Rehabbing your loan is also a good option (you can find a TON of rehab info if you do a search of this forum), since that can remove some or all of the penalties and fees from the loan before you consolidate and then you will have more repayment options available to you when/if you do decide to consolidate. Remember, though, if you do decide to rehab, you have to complete that before consolidating it.

I hope this helps. Good luck!!

Thanks for the quick reply. I tend to get obsessed about these type of issues.

Since there are no SOLs on these loans, does that mean that at any moment they can report me to the credit agencies?

Does a default only stay on your credit report for 7-10 years and then it is gone?

This may be completely off topic...but can my husband apply for a mortgage in the US and own the home without my name? He will likely be the wage earner for the first year or so in the US.

Thanks.

Good luck!!

Ok...

So what happens next? Will the student loan people sue me and get a judgment against me? I do have a letter that says they will take my tax refund.

Is there any way this can show up on my credit report in the future or do they only get one crack at it?

Thanks again for your help!

Sure, they could, but I'm not really sure how likely it is (and I really have no idea) since you're out of the country and they really don't have any jurisdiction. No, it shouldn't show up on your CR again.

My advice would be to call whoever is holding your loan and see what you can work out. I'm sure you'll be able to come to some agreement and be able to get it straightened out without much problem (although I know it doesn't feel like it now -- I've been there!!). I got the letter that they were taking my tax refund in August or so of 2003, but started a repayment plan with my CA in that same month and they didn't end up taking it come March of 2004 when I next filed my taxes.

Good luck!!!

I soon be in a similar situation, except it is the U.K. rather than the U.S.A.

What I'm about to propose may not be ethical but it will work:

1. Get a Mailboxes Etc. mailbox in the U.S.A. Have them forward to mail to you in Canada.

2. Get either 1) a prepaid mobile phone in the area code of your MBE account or 2) A phone number in that area that rings in Canada through a VOIP service like Lingo.

3. Consolidate your loans. Your trade lines are over 7 years old and won't show. Rehab makes no sense for you. Use the MBE address.

4. Don't talk to people. Do everything in writing.

5. You might want to chose income contingent repayment depending upon whether you've been filing taxes in the U.S.A. If not you can claim a zero income.

There it is. It will work, it has worked.

One last bit of advice.

Do not share information with the student loan collectors. It can only hurt you.

Hey it was the student loan collectors who came up with this system....we were doing this with out of country borrowers over 10 years ago!! In most cases we had them use a family or friends address in the US...only a couple that I remember had to actually use a PO box of some type.

Now not every student loan collector will be receptive to this "method".