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Originally Posted by crat1070
I graduated in 2001 and immediately after moved to Slovakia. I teach English here. I tried making some payment for a while but they were minimum and several years ago got into a messy divorce / custody battle. Since then I am a single parent with two children (both have dual citizenship) but for at least 5 more years the father has forbid them to move and live in US, they can only visit as we have share custody. My income is less then 10000$ when I change the currency. Last week a collection agency called me. Am not sure at all what I can or should do? There is no way can I pay the dept off or even the interest. I do not have any assets here or in US. I did this year set up a business here in slovakia in hopes of bringing me extra income but is has not yet even been functioning as I am still dealing with paper work etc here. The collection agency threatened me that they can stop that business (although there is no money in it). Is that possible? Can they show up on my door steps here in Slovakia and force me to go to court / jail in US and leave the kids behind?
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My first suggestion is to talk to a lawyer where you are living.
Is it a federally backed student loan or is it a private loan (not backed by the fed)?
If it is a private loan, had it been sold to the collection agency (CA)?
Is the CA, who is contacting you, based in Slovakia or is it a US CA? If it's a Slovakian CA, is it still in the hands of a US CA and only assigned to a Slovakian CA?
Typically a federally backed student loan is assigned to a CA instead of being sold to a CA. That CA may still hold the assignment but may assign it to an out of country CA, and if so then since the US based CA still holds the debt the actions of 'any' CA is still subject to the FDCPA - where threats are not legal.
Unless fraud is involved (which would make it a criminal case instead of a civil case) they cannot force you to come back to the US for a debtor court trial (which is a civil case). And, since you'd been making payments on it in the past then they have no real basis to claim fraud and probably could not force you back for a fraud trial (re: the jail comment in your question).
If they sue you in the US, in the state you'd lived in when you created the debt, then they can only go after assets you have in the US. It's generally not cost effective to pursue a US debt in another country, meaning suing you in a court in the country that you're currently living in, in order to garnish your wages or attach any property you may have in the foreign country.
If it's a federally backed student loan then there is no statute of limitations (SOL). If you ever move back to the US, even 30 years from now, they can still go after you.
If it's a private loan then there is a SOL, though they may try to claim the SOL is tolled since you are living out of the country. But, since the CA is contacting you in Slovakia you may be able to have their claim of tolling tossed, since they know where you are to be able to serve you a summons.
Many people believe that student loans cannot be included in bankruptcy (BK). That thinking is false. Though it is very difficult to BK a student loan, it may be possible as long as the debtor meets the qualifying standards. The student loan debtor would have to file an undue hardship petition and would then have to satisfy three conditions - !. The debtor cannot repay the student loan and also maintain a minimal standard of living based on their income and expenses. 2. The debtors financial situation would remain the same throughout the (time period of the) repayment period of the loan. 3. The debtor had made good faith efforts to repay the loan.
Again I suggest that you speak with a lawyer where you are living.