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I Owe Student Loans to an American Bank But I Live in a Third-World Country Now

Written by Steve Rhode


Dear Steve,

I have a private student loan from an American bank for my US graduate school education that I am unable to pay back because I am currently living overseas (in a third world country) and I am unemployed. Even after repeated requests, my American bank was not willing to forbear or forgive or defer loan payments. My loan is now in default for the last 2 months. Outstanding amount: approx. USD 50,000

Therefore I would like to assess what options I have, and whether it is necessary to file for bankruptcy because there is no way I can afford to pay the full amount of the loan in the foreseeable future.



Dear Cad,

It would only be possible to file for bankruptcy if you had lived in the U.S. in the last 180 days and if you left some assets in the U.S. you would then be able to file for bankruptcy. But you would have to return to the U.S. for the meeting with the Trustee. So I suspect those are requirements that can’t be met.

If you can’t afford to make the bank required payments then your option is to do nothing and stop paying.

If you did return to the U.S. you should have no problem getting in.

If you wanted some additional peace of mind you could always change your mailing address and mobile number in the country you live in. Granted, you would just be hiding from the bank at that point but it would stop collections from reaching you. But it can be advantageous to maintain the lines of communication in case they do eventually change their policies and offer you a repayment plan you can afford.

While it is always possible that international collections will become more common in the future, it isn’t common right now.

But this is a situation where you’ve attend to workout a repayment situation with the bank for the private student loan but they are unwilling to come to a decision that you can meet. So the lack of an affordable repayment option really has decided all of this for you.


You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.

About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.


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