Get Out of Debt Guy - Steve Rhode

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.


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 posting updates here in the comments section of your question. I’m very interested in how this works out for you.

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

Big Hug!
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