Unpaid student loan

32 posts in this topic

Good Morning,

a long, long time ago (early '90ies) I went to school in TX and received student aid.

I had repaid most of it but then moved away/Europe. Since the "internets" then weren’t as efficient as they are today

I was not able to repay the remaining difference since my Deutsche Bank charged me more than

the actual payment due. So - I forgot about it ... and thought It'll go away by itself.

 

m - hmmmm.

It didn't.

 

A bad-ass-collection-company bought the remainder of the loan and once in a while

grabs the money from my income tax returns at a incredible disgusting higher than high interest rate.

Which equals to paying for a lifetime.

How do I stop this? Who can I contact to repay the original debt? (it's something around $10 Th.)

Any helpful discussion, links etc. is greatly appreciated.

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Well, I've always been told that you should never default on your student loans. No one ever told me why they just always had a scary look on their face when they said it. That being said I just moved over here also, from TX, and have student loans I need to repay. I need to figure that out also so I can avoid your situation.

 

From what I understand in TX wage garnishment is allowed and they are also able to sue you and if nothing is returned to the collector they are able to go into your bank account and garnish money. If you don't have a bank account I'm assuming their next step was to garnish your income tax returns. I don't know if you can stop it other than to contact the collection agency and make arrangements with them. If you don't have their name you could easily run a credit report for yourself (you are allowed one free per year through one of the three major agencies) and you will find the information for contact there.

 

Best of luck to you!

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There are various ways of sending money back to the US. But your best bet is to start payments, as long as you don't the interest will continue to accrue, and they have probably raised it to a default interest rate.

 

Better to pay. I have one loan that gets 1k interest a year, initial loan only 7k, I get royally fucked on that one. Best advice is just to contact them and make a payment arraignment, or see if they offer a payment settlement, Ie you pay 6k and they write off the rest. But make sure if you set up payments, that it is not less then te interest or only a few bucks more you will just keep swimming in it.

 

Student loan never go away, not even in bankruptcy anymore.

 

Also you have options depending on the company- deferments, forbearance, or payments options (though not sure if those offers are still on the table in default.)

 

Best of luck to you.

 

P.S. Once the account is sold to a collection agency, the original bank is no longer the holder of the loan. They sell it pennies to the dollar to these bloods hounds that want your nuts. If you do not pay, they will sell it again.

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A friend of mine from California has a open 10k loan from the late 70's its now over 100k. He has written them "heay no problem one lump summe 10k plus a little interest and we are done with". They are not interested they now hound him for over 100k an ex girl friend lives in London and is crushed by her load re-payment. I Owed 650€ to Barclay's they wanted 3620€. No deal. You just got to pay them.

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It depends on what the bank offers, I had settlement offers before up to 40% off the initial balance.

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Has anyone living in Germany experienced US student loan collection agencies pursuing debt collections in Germany? The principal on the loan is *only* about $2,000, but has been in default for just over 10 years now (I believe the total balance now is around $5,000). And just to clarify from the start, I know I really screwed this up, I know I let it get out of hand, I do intend to repay it, but I just don't have the means right now.

 

Anyway, about a year ago, I got called at work (in Germany) by a collection agency - an American calling from the States. It was the first time I heard from them in years and years. I think they tracked me down through a LinkedIn profile I used to have with my company's name on it. I refused to speak with them and told them not to call me at work. So that was that for the moment.

 

Then I got a very strange call at work today, where a German-speaking woman called the company switchboard and asked for me, claiming to be calling from an insurance agency. My colleague transferred the call to me, I answered with "Hello" as is the custom in my company. The woman asked, "Wer sprich, bitte?" in a nice tone of voice, and I naturally answered with my name. Then she promptly hung up without another word.

 

If I would have been quicker off the mark, I would have asked for her name before answering, but I didn't, as I figured in the moment that she was just taken aback by the fact that I answered the phone with "hello" instead of my name. The last thing I expected is that she would just hang up! I do have numerous open items with my two insurance companies (not defaults or anything, we are just in a back and forth about some reimbursements I am owed), so it wasn't totally a shock that I might be getting a call from an insurance agency. So although strange to get a call at work, and through the switchboard and not my direct line, not completely outside of the realm of possibility.

 

So my question is: do you think it is possible that the American collection agency has hired a German collection agency, and they are just trying to establish where I am? (The American company only knows I am "abroad") Would they bother with such a relatively *small* loan amount? And I being paranoid, or has anyone experienced anything like this before?

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It is highly advisable to contact your student loan agency and rehabilitate your loan. There is no way to get out of paying your student loan back and they will chase you the rest of your life. They will also mount incredible fees and interest. Even personal bankruptcy will not save you. Unless you're willing to lam it for the rest of your life, it will mark your credit and follow you around. It is seriously not worth it. The good news is that they are very responsive to being proactive, even if you've defaulted.

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I did contact them once about 8 months ago, however I didn't have the means to pay them much of anything at the moment. I may get a bonus this year, and if so, I then want to make a lump sum final payment and be free of the damned thing. So I do intend to repay it. But my question right now is if anyone has any experience of a US student loan in default being pursued through a German collection agency.

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Why is it seriously not worth it? Fuck 'em!

@WonderingWhy- I've never heard of a collection agency pursuing anyone in Germany, I mean, its not like they are going to come get you, and they cant touch your money in Germany.

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After a long series of very poor mistakes in my university years, including falling prey to the credit card drug dealers on campus multiple times, I actually did have to file for bankruptcy at the age of 22. So my credit score is horrible in the States, without question. I couldn't go bankrupt on the student loan. Before I left for Germany nearly a decade ago, I cleaned up every open account I had, with the exception of the student loan. It was another very poor mistake on my part, and I could tell you the whole long, sad story, but in the end it doesn't matter.

 

What does matter is I don't want this thing accruing interest and hanging over my head any longer. I absolutely feel obligated to repay it and I will sort it as soon as I can. In the meantime, bobbyD, do you have any resources I could read about what you are stating above? My usually wicked google skills are failing me at the moment.

 

I really do want to know if they can garnish my wages or not, from overseas. Are there any treaties or agreements between the US and Germany in regards to this? I know they can take anything from my US income tax return, if any, which I will file for the first time next April now that I have income again. Can they sic German tax collectors on me? Even if they could, for the relatively small return on their part, would they bother? Has anyone here had this happen to them?

 

I will carry on with my own research, but if anyone has something to add, I would be really grateful. It feels like a guillotine hanging over my head. Well, okay, maybe just hanging over one hand, but in any case, it sucks.

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From what I understand in TX wage garnishment is allowed and they are also able to sue you and if nothing is returned to the collector they are able to go into your bank account and garnish money. If you don't have a bank account I'm assuming their next step was to garnish your income tax returns. I don't know if you can stop it other than to contact the collection agency and make arrangements with them. If you don't have their name you could easily run a credit report for yourself (you are allowed one free per year through one of the three major agencies) and you will find the information for contact there.

 

Unless something has changed, you cannot garnish the wages of individuals working in Texas with a judgment obtained in a Texas state court (what is usually done is a judgment is obtained in a state that permits wage garnishment and that judgment has to be recognized in Texas because of the Full Faith and Credit clause). The OP isn't working in Texas, though. They also have to find out who your employer is.

 

Wondering Why, a US-based debt collection probably would not want to incur the costs of pursuing you here in Germany because they have much easier prey in the US to feast on. However, if the amount ever becomes worthwhile and they somehow determine that you are a good candidate to pursue (after an inheritance, for example), it could be a different story. But that's just a layman's opinion.

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Thanks. I have some trial lawyers in the family, so I have picked up a few things.

 

Forgot to mention it above, but they can get a US judgment against you and have it certified here in Germany, although I doubt they will go to that trouble if there is lower-lying fruit unless the interest supersizes it to a really large amount. Would they even know that you are here? Furthermore, Germany will only certify US judgments that don't violate its public policy, but I have no idea if one obtained in a student loan case would here. Theoretically, they could get a German judgment against you, but, again, that's a lot of trouble for them.

 

Anyhow, I am sure there are law school graduates or dropouts who have defaulted that make more sense for them to pursue (at this point, anyway). If I were you, I'd pay the thing off since it's only 5K.

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Technically, any debt incurred from the United States can be recovered in Germany if the owner of the debt is willing to pay the fees necessary to pursue the necessary legal channels. I couldn't find anything anywhere (searching around) that indicated someone had their student loan debt pursued while in Germany. Most likely, they don't bother because there is no statute of limitations on student loan debt and they just get to pile on the interest and penalties.

 

From what you're expressing, it seems like you have 2 problems,

 

(1) whether you can be garnished in Germany (it seems "can" = yes, "likely" = no); and

(2) the stress of knowing you have a mounting debt you can't get rid of

 

The 2nd can only be answered by the owner of the debt. They can create a system for rehabilitation of the loan and I would contact them as soon as you can. They often have a number of payment options and also options for deferment if you qualify. My experience with them is that they are pretty easy to deal with even though they really don't have to be (because you can't get out of it).

 

One thing is for sure, as the world gets smaller, the borders thinner and the debt greater, I wouldn't bet on hiding out in Germany as a long-term solution.

 

You'll get back on top and sleep better once you know exactly what you're up against. Good hunting!

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@WonderingWhy -

 

If you are willing to repay them the student loan, then why are you so worried about them finding out where you live? They way you have written your post doesn't suggest to me that you are really making this your priority. Of course, I don't know if you are spinning other plates at the moment but it sounds like you are looking some reassuarance that you can continue to avoid paying this debt. If you're going to do that, then I would start by deleting your LinkedIn account, changing employer, moving house, changing your name, perhaps even changing your sex...

 

OR

 

You can regain control of the situation, and give them the money you owe them.

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I know my post above sounds a bit snotty - I really didn't mean it to sound that way! :)

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Answer to your question - NO, as I paid mine off and it really pisses me off that so many people don't as it just makes it harder and harder to get student loans for those who need them and the interest rates just keep going up and up!!!

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Sandyks, I don't think your post was snarky, and I appreciate your input. It is true that I have had multiple plates in the air for a very long time, and I willingly admit that the student loan got put on the back burner for too long. However, I am now starting to get my feet under me again financially after a very long and hard road, and as I stated before, I do feel fully obligated to repay the loan. I do want to regain control of the situation. As I don't know how the system works across international lines, that is why I have felt that I needed to "hide" where I am - I have not fully understood the consequences. However, I will have to file a tax return next April, so that will "out" me, as it were. I am really hoping I can sort this out before then.

 

Also just to clarify, when I said "credit card drug dealers" I didn't mean drug dealers who take credit cards *snort*, I meant the truly evil credit card companies who prey on naive and inexperienced young people who don't have the knowledge or self-control to deal with access to high amounts of credit at an age where many have absolutely no means to repay any debt.

 

Eurobabs, I am not sure which question your are answering with "NO", and in theory I agree with your assessments that "deadbeats" like me make it harder for others to get student loans. But you may perhaps want to keep it in mind that a few lines of explanation on an internet forum can't give the whole picture of the circumstances of someone's life, and perhaps it is best not to jump to conclusions and be so hard on someone, not knowing the whole picture.

 

And although it doesn't apply particularly to my *small* loan, we could talk for days about the ridiculousness of 18 to 22 year olds taking on hundreds of thousands of dollars in debt with no guaranteed way of repaying it. The education system is the US is truly broken in my view, and sets a great many people up to fail right from the start, hence the high amount of people who default on student loans.

 

Anyway, your answers to my questions are very helpful, and I appreciate those on TT who are willing to help out someone like me who has clearly made mistakes, but is really trying to rectify those mistakes now.

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Eurobabs, I am not sure which question your are answering with "NO", and in theory I agree with your assessments that "deadbeats" like me make it harder for others to get student loans. But you may perhaps want to keep it in mind that a few lines of explanation on an internet forum can't give the whole picture of the circumstances of someone's life, and perhaps it is best not to jump to conclusions and be so hard on someone, not knowing the whole picture.

 

MY answer was to the OP, however, it also applies to you as well. By your rational, you are then assuming that everyone who has paid their loans back did not have any hard times or circumstance. Yes, there are some that it was not a problem for to pay back and there were A LOT of us that it was, yet we still did it. Even if you know it will take you years longer, you arrange some sort of payment, not ignore it for 10 years. If it is now 5000 (even though was only 2000 when you left) - that would still have only been ~40 a month over the last 10 years- everyone can manage that!!!

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Answer to your question - NO, as I paid mine off and it really pisses me off that so many people don't as it just makes it harder and harder to get student loans for those who need them and the interest rates just keep going up and up!!!

 

Maybe your anger should be aimed more at an education system that forces students to take out thousands in debt before they have even graduated, than it should be at those who are, for whatever reason, unable to pay back their loans. It's pretty shitty that to get a university education, one must either have rich parents or graduate and enter the job search and already have thousands in debt (and often times very high interest rates from private loans).

 

Just a sidenote: Student loan debt in the US is at $847,212,795,171 according to Forbes.com.

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