I Am Mentally and Physically Disabled and Can’t Pay My Student Loans or Bills. – Callie

“Dear Steve,

I am currently disabled due to both mental and physical ailments. These problems have been exacerbated by chronic unemployment (and therefore poor medical treatment) over the past six years. Now, I couldn’t even work if anyone did offer me a job.

I receive state assistance because I am medically unable to work. I get $339 a month. I am effectively homeless; I couch surf. I accrued $45,000 in debt in student loans in addition to about $9000 balance on a car loan (the car is upside-down and soon to be repossessed), at least $10,000 in credit card debt (all purchases made while unemployed or low-income), and a few thousand in medical bills. I have made mistakes, but I have also been gainfully employed and did not foresee this particular situation which has left me unable to work.

I have dual nationality with the US and another country, and I have relatives that I do not know that well but have offered to let me stay in their house abroad rent-free. I have a friend who has offered to buy me a plane ticket to get there. I have almost no money and I have no assets. I am applying for SSI, but it’s a slow process. I hate being a burden on people, but my options are limited.

What is the worst that can happen if I leave the country without declaring bankruptcy? My friend is pushing me to leave the country ASAP and I won’t have time to declare, and I don’t have the money to hire a lawyer.

My friend is really pushing me and won’t help with a bankruptcy lawyer, but will help with the plane ticket. I know that there’s little or nothing I can do about my student loans, but I also know that while I am on disability that there’s not much anyone can do about suing me because I am collection proof. Will I be making a mistake if I leave the country and just wait for the statute of limitations to end? Also, I will most likely continue disability if I get approved for SSI, which will make it difficult to hide, but I do not plan on returning to the US.

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Dear Callie,

In my humble opinion I think your friend is doing you a disservice by trying to ‘smuggle’ you out of the country quickly. It is far, far better for you to step-up and face the issues properly with bankruptcy to terminate the debt than leaving it a mess to recycle for years to come. The statute of limitations does not stop collections. That can continue on indefinitely, even overseas.

Since you are permanently disabled there are programs that will allow for the discharge of government backed student loans. Student loans can’t be discharged in bankruptcy but the Total and Permanent Disability (TPD) option is a real possibility for you.

But all of these things are a process and will take some time. At the end of that process you will have far more freedom and less stress and could then go and enjoy your home country more.

Since there is no expectation that you will remain outside of the U.S. forever, it is wise to deal with all of this stuff now.

Please update me on your progress by

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.

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P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

Damon Day - Pro Debt Coach

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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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1 thought on “I Am Mentally and Physically Disabled and Can’t Pay My Student Loans or Bills. – Callie”

  1. I do agree with you, and I was very uncomfortable with the idea of “fleeing.” I told my friend as much and two of her family members (both lawyers) told me that it wasn’t a big deal and I should just go! I’m already a complete wreck about it and I don’t want to look over my shoulder every minute for the rest of my life. I had not heard of the TPD program, so thank you for that. My health problems are actually probably manageable and I may go back to work at some point, but I don’t know when. At that point, I don’t know how I’ll manage the student loans even after bankruptcy! I thought that going to grad school would make me more marketable, but I have yet to get a job that pays even what I made before I earned a bachelor’s. I’ll see if I can convince my friend to help me later rather than sooner and try to scrounge up money for a lawyer, which just seems impossible. I hope that I can work again in the future, but right now I just can’t. I’m moving to a country with free healthcare, which will probably make things easier. I may never come back just for that reason. I don’t want to rack up many more bills. My medical bills pile up quickly.


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