I borrowed $90k to fund my degree in the US and thereafter moved overseas for work. The loan was through Access group and they have since transferred it to First Associates. There was no cosigner on the loan and I have there are not assets secured on the debt. I am not a US citizen or green card holder and neither is my wife. We were not married at the time I borrowed. I have no intention to move to the US unless I get a great job.
My first repayment was end 2010. I have been current on my debt repayments up to today. I still have over 70k outstanding.
My situation has changed. The currency of my current country has fallen ~30% against the dollar, my wife stopped working and she is pregnant now – plus I have house repayments on top of that I have to incur significant medical bills on behalf of my very sick father
As such, I have fallen behind payments and I think after 60 more days I will go into default. If I can keep up my payments I will – however, my family takes priority at this stage.
- What happens if I go into default
- Will the lenders (First associates) come after me overseas
- Can I get my wages garnished overseas (if that happens I will have to foreclose on the house and stop paying for my Dad’s treatment)
- Will my wife be affected by my default?
- If do move to the US (as a result of that great job – that means I will likely to be able to start making repayments again) what would happen?
- What is the worst case I should expect if I go into default?
- What is the most likely case I should expect if I go into default?
Even though we live in a modern world that seems always instantly interconnected, the field of international debt collections really is very difficult and is not a common reality.
I’ve never heard of any case where a U.S. private student loan holder went after someone else in a foreign country, garnished wages, or seized property. It just does not happen.
How you deal with the situation really depends on the currency slide and your income where you are living now. At some point you will just have to default if the available money is not sufficient to meet your obligations. It just is what it is.
When you default, the loan will start building up extra fees and penalties and obviously the balance will grow. The lender could always try to sue you here in the U.S. but with you being out of the country and not having a U.S. presence, that seems less likely.
If you wind up getting a great job in the U.S. and move back then you’ll just have to deal with the debt at that time. It might even be possible to settle the debt for less than the then current balance if you can save up some funds.
One thing is for certain though, the potential default will make the balance grow and when the time comes to deal with the debt, the amount owed will be much larger than what you owed at the time of default.
The good news is your wife would not sucked into this situation since she had nothing to do with the debt.
Please post your responses and follow-up messages to me on this in the comments section below.