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Phillips Esq.
Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12819
Experience:  B.A.; M.B.A.; J.D.
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US student loan to study in canada - landed now

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I have a US federal student loan of $25k from 20 years ago that I used when i came to study in Canada. I have incrementally paid off some of it over the years. But it has grown to 5 times the original amount. I have been a landed immigrant in Canada for 15 years. I am a US citizen. I just got a lay-off notice from my job in Canada. Do I declare bankruptcy in the US or Canada? I own nothing in either country. Is there any other way to achieve this stafford loan debt forgiveness? What happens to me if I just stop paying and default? I am married to a Canadian for 12 years. She owns nothing. Does she have any liability?XXX@XXXXXX.XXX

Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  retireddebra replied 1 year ago.
Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

Finally, as we go through the process please do not feel rushed if I ask you a question. You are always free to take your time to gather more information before you post back. As well, please understand that even after you rate me the post will not lock and you could always come back for further clarification if you think of something a bit later on down the road.

Are you saying you got a loan from the US?
Customer: replied 1 year ago.

yes the loan is a stafford loan from the US FED government that i took to study in canada in 1991-93. I have been landed immigrant in canada since 1997. They do not do debt forgiveness on loans although there is a bill being debated in congress now to limit interest to 50% of the original amount, regardless of repayment duration. I would like to know my options for bankruptcy. I have heard that US student loans are dis-chargeable through Canadian Bankruptcy

Expert:  retireddebra replied 1 year ago.
I don't know the law in the US.

I can either move your question to the US law list or answer about the Canadian law aspects.

What would you prefer?
Customer: replied 1 year ago.

move my question to US law list

Expert:  retireddebra replied 1 year ago.
OK
Expert:  Phillips Esq. replied 1 year ago.
Thank you for giving me the opportunity to assist you. Kindly use CONTINUE or REPLY button to ask for clarification or follow-up questions.


A U.S. Contributor here


Your Question: I have a US federal student loan of $25k from 20 years ago that I used when i came to study in Canada. I have incrementally paid off some of it over the years. But it has grown to 5 times the original amount. I have been a landed immigrant in Canada for 15 years. I am a US citizen. I just got a lay-off notice from my job in Canada. Do I declare bankruptcy in the US or Canada? I own nothing in either country.


Response 1: You have to file for bankruptcy protection in Canada. Since you now live in Canada and do not have any assets in U.S., the proper venue for your bankruptcy case would be in Canada. Under 28 U.S.C. Section 1408, a debtor may commence a bankruptcy case in any federal judicial district in which the domicile, residence, principal place of business, or principal assets of the debtor have located for 180 days prior to the bankruptcy petition, or for a longer portion of that 180 days than any other district.




Is there any other way to achieve this stafford loan debt forgiveness?



Response 2: There is none except applying for loan forgiveness (which you chance of success is little to zero) or transferring (consolidation) your loan back to the U.S. Department of Education, through the Ford Direct Loan Program where you can pay monthly based on your income and since you do not have any income, your payment would be zero. You would look into Income –based Repayment Plan (“IBR”). For more information on Ford Direct Loan Program, click on the link below:

https://loanconsolidation.ed.gov/AppEntry/apply-online/appindex.jsp





What happens to me if I just stop paying and default?




Response 3: Nothing. If you do not have a job and do not have any assets that can be reached by your creditor, there is really nothing the creditor can do to you. Even if the creditor files a lawsuit and prevails, the creditor would not be able to enforce the Judgment because of lack of assets. You are deemed to be Judgment Proof at that time.

I am married to a Canadian for 12 years. She owns nothing. Does she have any liability?XXX@XXXXXX.XXX



Response 4: Your wife absolutely has no liability for your student loans.

Customer: replied 1 year ago.

thanks - last Q?. If the federal government creditor files a lawsuit what then? WIll I be prevented from traveling to the US? Are lawsuits over similar $ amounts uncommon?

Expert:  Phillips Esq. replied 1 year ago.

thanks - last Q?. If the federal government creditor files a lawsuit what then? WIll I be prevented from traveling to the US?



Response 1: No, you would not be prevented from travelling just because a lawsuit has been filed against you.


Are lawsuits over similar $ amounts uncommon?




Response 2: There is no set amount for a lawsuit. However, it would not make any sense to file a lawsuit if the Attorney's fees would be greater than the student loans.

The federal government does not file the lawsuit itself. The government retains debt collectors to evaluate the case and then make a decision whether to file a lawsuit. Also and more importantly, the federal government does not have to file a lawsuit in order garnish U.S. Social Security benefits if the debtor is already receiving benefits or do U.S. tax refunds intercepts.

Phillips Esq., Attorney-at-Law
Category: Bankruptcy Law
Satisfied Customers: 12819
Experience: B.A.; M.B.A.; J.D.
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