Defaulting while permanent resident in another country
Posted by p1gn3wt0n@reddit | studentloandefaulters | View on Reddit | 12 comments
I have federal loans. Made income based payments until I moved to another country 8 years ago where I made much less in salary (but better cost of living trade off). Stopped paying, went into default after covid delays.
I don't 'pay taxes' in the USA because the country where I live has the deal where the taxes I pay here are not doubled by USA (I make well below the threshold for this). I file my taxes every three years for my convenience; next year is the third year. I do not expect any tax refund and I do not have any banks in the USA. I plan to get citizenship when I can here (next year), but will keep US citizenship. I never plan to live in the USA again if I can help it.
With the recent news about collections amping up, what should I expect? Are there any precautions I should take? Can they access my salary here at all?
Thanks
ThrowAwayT55@reddit
I'm confused if they are federal loans and its on income based payments (its based on your US income, which is $0) how could you go into default? Can you please explain OP, im curious about this.
p1gn3wt0n@reddit (OP)
Great question. I stopped paying when I moved, so I couldn't tell you if or how they calculated off a foreign income. I'd imagine they can take your tax returns as an 'income level', but again, I really don't know.
digiorno@reddit
If you have co-signers then they’re on the hook. If you don’t then you’re just playing the game of if the debt is worth pursuing overseas. If it’s sizable enough they may try to sue you wherever you are, if they can find you. And they might win but they might not…
p1gn3wt0n@reddit (OP)
No cosigner, thankfully. I do not plan to travel back to the USA during this administration, so I'll wait and see. Good to know I should watch for criminalization applied in the future. Thanks for the detailed explanation.
investor_guy05@reddit
There is absolutely zero chance of criminalizing not paying back federal student loans. Debt is a civil matter not a criminal matter and the US got rid of debtors prisons along time ago. All 50 states have statutes that protect from imprisonment for debts, and under USC 28 2007 the federal government must follow those state laws.
Leather_Bat7344@reddit
Hi, would defaulting private loans be considered crime?
investor_guy05@reddit
No still a civil matter. You only risk criminal charges if you lied or forged documents to get the loan, but defaulting on it won't put you in jail. Just be aware of the consequences of defaulting
p1gn3wt0n@reddit (OP)
Wow thanks!
DapperGuess9700@reddit
Avoid returning to the US until democrats are back in office and be prepared for legal trouble when you do. Student debt to the government isn't easily forgiven. Fingers crossed Trump's big plan to fix our deficit isn't to lock up everyone that owes money. He's nuts. Good luck.
tenthousandgalaxies@reddit
Seems like a solid plan! Please give us an update once you've defaulted as I (and others) will likely end up doing something similar in the future.
Also be careful when saying that you don't get double taxed just because your country has a tax treaty with the US. Try telling that to the IRS when they make you pay taxes twice on certain investments, selling a home, etc
ThePotatoPolak@reddit
Nahh OP you're good. Keep doing what you're doing.
p1gn3wt0n@reddit (OP)
Thanks neighbor