Planning to default once i refinance
Posted by pinkdiamonds00@reddit | studentloandefaulters | View on Reddit | 24 comments
Over 140k (and rising) with the infamous Sallie Mae. I live in France but am American and will remain in France permanently.
My loans are currently in pause, and I will do interest only payments under the graduate program loans program for 1 year as I am currently trying to find a full time job while working an internship.
I am only doing this so that I can eventually refinance and get my parents off as co-signers. They do not support me defaulting and getting sued so they are not of course willing to support me through this so I’d like to refinance to get them away from these loans so it’s only my problem.
Has anyone does this? Refinance and then never make a payment, do intended default, get sued and settle for a lump sum?
My goal is to start saving now and once I’m employed full time so that i can settle fast and just get these loans off of me. I’m even planning on living on a dangerously low budget for a year or two so that i can save up for the lump sum and get it over with.
One last question - with any loan amount and getting sued, is it possible to negotiate a lump sum? For example if by 2026 I owe $123k, do you you think if i have a realistic and respectable lump sum ready to give on the second, they’re more likely to accept that amount vs. a payment plan? Any experience with that and negotiated an amount would be so nice to hear about !
Scared-Welcome-9000@reddit
How are you refinancing these loans? Private loans for example will never serve you in France sufficiently to get an enforceable judgment against you but some federal loans have the ability to garnish without filing a lawsuit.
pinkdiamonds00@reddit (OP)
I’ve researched and there are companies that will refinance across borders. It’s only private Im worried about. And worst case scenario i pay for 1 year then drop my co-signers. Worse worse case i have to resign with another co-signer which would be someone who is either close to death or has nothing to lose.
Ordinary-Milk3060@reddit
Can you share which companies youve found that will do that? And also keep us informed how its going. I want to do this. The only reason I still pay is because my parents are co-signers.
Scared-Welcome-9000@reddit
Private lenders will not effect valid service on you if you're France. They'd need to find you in France and then serve you internationally which is a ridiculously complicated thing to do that involves article 10 of the Hague Convention. They won't bother. If they do get a default judgment against you in the United States through "gutter service" or invalid service at a past address where you do not live, you can always set aside the judgment by proving you were in France at a later time if needed. That forces them to start all over again.
Scared-Welcome-9000@reddit
One other thing, if they do ever try and serve process on your parents or other family members/friends, it is important to explain to them in advance that they must emphatically tell the process server you do not live at their address and offer no other information about you or your whereabouts.
pinkdiamonds00@reddit (OP)
Would these be things I can ask an attorney about or just do myself? I’m most afraid that my parents would tell them how to contact me because they always open my mail.
Scared-Welcome-9000@reddit
An attorney can't keep your parents from sharing your information. You can freeze your credit reports all on your own and you can avoid service by simply not being in the United States.
DisembarkEmbargo@reddit
Sort of. I refinanced (navi refi) to remove my consignor. Then I went into in school deferment. They wouldn't extend the deferment so I just stopped paying and contacting them for 1.5 years. I saved up my payment then settled with financial help from family and friends. They threatened to sue but didn't over those 2 years.
Expect to lump sum 30%. You can go lower though. You also don't need to start negotiating for a debt settlement until they sue you. So you can continue to save money for years of you like.
pinkdiamonds00@reddit (OP)
So hypothetically speaking, i can refinance then immediately not begin paying my monthly payments and immediately go into forbearance?
DisembarkEmbargo@reddit
Yes. I mean that's what I did. I just went into in school deferment which built the interest :(, but gave me time to save money :)
TheRealAMD@reddit
You are correct that your credit file doesn't follow you across borders (I believe the US and Canada is the one exception, and it's voluntary). However, with that said, and I'll preface this by saying I'm not sure whether this is true for France or not, there are some countries that do take your foreign credit history into account for the purposes of immigration eligibility / admissibility.
The UK is the main one that comes to mind - they don't care about your FICO score per se but being sued by a lender is grounds for a refusal. I know their visa forms ask about unpaid debts as recently as a few years ago.
Dramatic-Ad-4763@reddit
I filed bankruptcy at the time of my divorce and after my discover private student loan was charged off. 7-8 years later it’s past the statute of limitations and I haven’t heard from them lately. They call on occasion but can’t report to the credit agencies anymore. My credit is not in the 700s
BayouGal@reddit
I stopped paying in 2015. I’ve never been contacted.
ProleDBA@reddit
Yes, there are some people on this board who have done exactly as you are planning to do. I hope they will respond to this thread to give you some reassurance. If not, you sound like you have done some reasearch and are headed in the right direction. I don't think your parents understand that they and you will never pay these loans off. I used to hear about people paying off their loans, but they are the minority. Out of the people I know, only 10% paid off their loans and usually something else was involved like- military service etc. Most people I know who have 50k student loan debt and above, especially with Navient/Sallie Mae, never pay their loans off. They may pay for a decade or two and still owe the original loan amount. So I don't think you are wrong to consider your options and to take advantage of them. Good luck with everything.
TWOscore11@reddit
If you live in France and have no cosigners then just forget paying at all, unless you're planning to the states and need credit. Save the money
DisembarkEmbargo@reddit
This is the best advice. Refinance to remove parents then never give them a cent. Who cares if they sue you? You literally live in France.
pinkdiamonds00@reddit (OP)
Unfortunately i have both my parents as co-signers so i need to at least refinance to get them off the loans :/
TWOscore11@reddit
Yeah definitely do that if you can. But once it's all in your name then you're good
Apprehensive-Ad-80@reddit
Just be aware that when you do default, regardless of co-signer status, lenders are going to contact anyone related to you they can find contact info for. So your parents are going to get calls and mail trying to reach you whether they’re on the loan or not. That being said, once you refinance and get them off their credit won’t be effected and they can’t be sued it’ll just be you that’s going to take the hit on your American credit, but it sounds like you plan on staying in France so that shouldn’t follow you
pinkdiamonds00@reddit (OP)
Yeah they’ll be fine with the calls and mail, they’ll live lol. I’m doing this to also help them as well so it’s a small hit for a big reward in the long run.
Apprehensive-Ad-80@reddit
From my understanding our credit system in America doesn’t follow you to other countries… so if you’re committed to defaulting, I say refi to get them off pick up some pastries, good French cheeses, and a couple cases of Bordeaux (or your preferred French wine) and enjoy France.
pinkdiamonds00@reddit (OP)
Well when u put it like that, seems like a walk in the park process haha. Super committee to defaulting tho, the biggest hurdle will be the refinancing I’m sure
shoftingchorton@reddit
Bad plan, bro. Like eating a salad with a side of cake.
pinkdiamonds00@reddit (OP)
I don’t think i understand your point