Student Loan Default
Q: Here is a conundrum for you. I borrowed $80,000 (guaranteed student loans) for law school which I successfully completed and passed the bar. While going to law school I met the man of my dreams (or so I thought at the time, of course) and decided to give up on the career path and follow him home to an isolated island off Ireland. Initially in my bliss I used the student loan payment requests for fire lighters. Ten years on and four young kids later the bill with interest and penalties is reaching $200,000. I stay at home,mind the kids,help grow the food and have an organic cafe in the summer. Our work is very rewarding but minimally profitable. Our joint income (he raises cattle on a smallish amount of land handed down for eons) is probably around $14,000 a year. We pretty much want for nothing although I am getting restless and considering my future when the kids are bigger. I would like to go back to the states for maybe 6 months of the year (and work). I also would like to get into human right law (the main reason for going to law school). A local university has a well regarded (and relatively cheap) masters program in this area and am considering taking this on. Again, not a big money spinner. When the collection folks call they jar me out of mu lull and reawaken that guilty feeling. Going back to the states fulltime and getting back into the job market is an option but can't see how I could ever make enough to pay it back, particularly with childcare costs (and I would be breaking up the family in the process). I would like to pay say 10% of my income (whatever that is, it may and hopefully will increase) for the rest of my life but the collection people want the whole thing or payments of $1,000 a month. I am considering just sending the 10% each year to the Department of Education anyway. I know I can't declare bankruptcy and really don't want to. I wonder do they ever go away? Should I just forget about ever owning property or working in the states ? Will my law degree and any future in this area be jeopardized by not breaking up my family and heading back to the states for the only purpose of paying these back? If I go back for 6 months and work will I be swamped in horrible debt collectors and not see any income anyway, even though I would have 4 kids to feed while there? One horrible collector said that my partner's assets could be attached. A 1978 tractor,small bit of land and the family home is all he owns. What,is she going to come over and float them west? I appreciate and accept the mistake of borrowing more than I could pay back, but after surfing the net on this issue, I see there is a real problem for people to make heartfelt decisions as to what they want to do with their lives. Opportunities promised through the program actually pigeon hole people into limited options.
A: - The good new is bill collectors are usually bluffing. I doubt they would pursue an international collection matter for the meager assets you describe. The bad news is you are still liable for the student loan. You can try an negotiate a settlement or payment plan. Or you can just take your chances that they won't sue you. Most bill collectors do not sue. - Correction- student loans are not subject to any statute of limitations. The complete information on dealing with defaulted student loans is here; http://www.nolo.com/lawcenter/ency/article.cfm/objectID/76BDA7E4-496A... - Each day the load goes unpaid, interest and fees are accruing. Recently, a friend of mine was facing a similar debt, however, after getting the load out of default, she is now paying a reasonable monthly payment and if all works well, she should have the debt paid off in three years. The company who handles collections for the US Department of Education is ACS Inc. .