Bankruptcy Law Questions? Ask a Bankruptcy Lawyer Now.
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 [email protected]
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
move my question to US law list
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:
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 [email protected]
Response 4: Your wife absolutely has no liability for your student loans.
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?
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.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).