I’m Living in a U.S. Commonwealth and Need Student Loan Help


Dear Steve,

I am 71 years old and owe about 250,000 dollars in student loans and about 75,000 in private school loans.

I have been paying for almost 20 years on these loans, and I don’t see much reduction since I use IBR.

I have about $5,000 in savings. I work as a Physician Assistant and make about $90,000 a year. I have never owned a home and don’t have any 401k.

When I retire, the only money I would receive would be about $1,600.00 monthly from Social Security. I want to quit, but I’m afraid they will go after my Social Security.

I want to file for bankruptcy but need to discuss this with a qualified lawyer. I certainly can’t retire while filing bankruptcy as I will need to pay the attorney fees.

What are my chances?

Is there a more optimal state to file for bankruptcy than another?

I presently live in a U.S. territory on an island called Saipan. Do you have a listing of lawyers familiar with representing bankruptcy for school loans?




Dear Erin,

It sounds like you are doing great work as a PA on Saipan in the Commonwealth of the Northern Mariana Islands.

The easiest way to deal with the federal loans would be to stay on the IBR. Even if your payment goes to $0 in IBR after you retire, there is no risk of garnishment as long as you remain on the program. Unfortunately, you will most likely pass away with federal student loan debt. That is not your fault. It is a fundamentally broken program.

Private loans are the real issue that can benefit from some intervention. But private student loans can’t garnish Social Security, so that’s off the table.

You would file bankruptcy at the District Court for the Northern Mariana Islands. One place to look for a bankruptcy attorney might be by contacting the CNMI Bar Association.

I would start with a bankruptcy attorney already practicing in the NMI court located on Saipan. They would understand local rules better than anyone else. They would help you filter out who to work with there.

See also  Apparently It Really Sucks to Be a Bankruptcy Attorney Here

It appears the District of the Commonwealth of the Northern Mariana Islands (Bankruptcy Division) is supervised by the United States Trustee office in Honolulu, Hawaii. For information from them, you can call 671-472-7336. The staff directory can be found here.

Your situation is unique. While some underlying issues might make the private student loans eligible for bankruptcy, it will be a complicated situation.

Private student loan discharge in bankruptcy is not impossible, but it may be improbable based on your specific loans.

A better idea might be to first speak with my friend Damon Day who has assisted many people in navigating the tricky private student loan waters. Damon is a talented debt coach who has experience helping U.S. residents in many distant locations.

My take on this is that your federal student loans can be dealt with and contained, so there is no risk of Social Security garnishment. Your private student loans have creative options, and you should talk to Damon about that.

Overall, I’m much more hopeful than worried you have a reasonable path forward that can be implemented.


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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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