A friend of mine is in an interesting situation. He owes upteen thousand dollars from U.S. student loans (he’s American), but has gone for years without paying them anything.
I mentioned that Taiwan courts recognize U.S. debts (except for gambling debts, I think), and that Taiwanese debt collectors will do things like, break kneecaps and rape your significant other while you watch. He said that he didn’t think this could happen with an American student loan, and thought they would more likely just drop it, once they found out he was out of the country.
My experience of debt collection being strictly local (worked in a call center for awhile), I have to admit that I really don’t know whether they would sell the debt to a Taiwanese company, or whether anybody over here would buy it, though I can hazard a guess about what they might do to him if they did buy it.
Well, which do you think the fates will reward in this case–virtue or profligacy?
P.S. He’s married (to a local), but his debts predate the marriage.
Student loans used to be U.S. government guaranteed. (I don’t know if this is still the case) So in those conditions the bank will NEVER sell or write off the loan, because at some point they can get their money back from Uncle Sam. I don’t know how many years your friend has gone without paying anything, but I did the same thing for about 5 years. When I went back to the states, the collectors were still looking for me. (I finally paid them off)
I have known others that have blown off mountains of U.S. debt by coming to Taiwan, but I would be worried that this situation might not hold forever. If they chased me for five, they might chase your friend for ten years. Who knows what the legal situation might be several years in the future?
You must be trolling. That BS about knee-cap breaking, etc., might apply to drug or gambling debts in any country, but no legitimate business such as US banks and student loan companies would do such things. They won’t bother trying to collect it from him in Taiwan, because international legal procedures are complex and there are unfortunately too many dead-beats like your friend.
But they will not forget about the debt. His default will stand out prominently on his credit record, so if he ever tries to borrow money in the US again he may be rejected. It sucks having to pay off student loans but he should just do it. If he fails to do so, he is a liar and a thief who is cheating all US taxpayers and other loan applicants who may be denied because of assholes like him.
Even if he does not plan to return to the US, it says a lot about his character. Does he try to be honest and decent in other areas of his life? If so, then I hope it would bother him to steal money from taxpayers and opportunities from needy students. If he’s a real man he will pay it off. . . and will feel good about himself after he has done so.
I couldn’t have said it any better. Screaming Jesus, I would be very,very careful not to ever loan this friend any money or one day you will probably also lose your money.
Prior to my coming to Taiwan from the states, I owed over 10,000 USD to the government. I paid ever cent I owed. I honestly think that simply leaving the country where one owes a debt should not eliminate the debt.
Give your friend some good advice and tell him to use some of the money he probably spends on partying to pay off his loan. Then, like Mother Theresa suggeted, other students will benefit because they may also be able to borrow some money to go to school.
Mother Theresa, my reference to breaking kneecaps was to standard (gangster-supervised) Taiwanese debt-collection system, not to U.S. practices which are more regulated.
Apparently the U.S. banks have an incentive not to sell these debts (but then, what makes them so eager to go after borrowers within the U.S.?) and anyway coordination with Taiwan counterparts would likely prove expensive and troublesome. Still, it seems like it would be easier to track such things down–Personally I wonder why they haven’t caught him already.
I’ll make sure he reads this, so he can be inspired to live a life of virtue. Thanks everybody.
I wouldn’t worry too much about US debts in Taiwan. I would highly recommend paying them off before you go back to the US. Debts can only be on your credit report for 7 years, after that they fall off. You will need to pull a credit report. I would imagine if he owes this much for student loans, he probably has even more bad debts for other forms of consumer credit. I would off him the following advice:
Find out how much you owe and to who.
How old is it and how long till it becomes uncollectable(consult an attorney, not a message board)
Decide what he is going to do and how he is going to do it
The big problem with debt collection is that you either pay all of it off or none of it off. Small payments cost too much to process. So though you think that your $50 monthly check is doing something, in reality it is not and some collection agencies will send it back to you with a request for payment in full.
The reality is this is on him. Most people will not face their bad debts and if they can get away with doing nothing, then nothing is what they will do.
Thank God and my hard work for being debt free, cash flow positive and having a positive net worth.
Penny wise, pound foolish. Only US$10,000? If you want the stress overhanging your life year after year, but why bother when you can just work a little harder and pay off what you rightfully owe anyway.
Creditors are getting very savvy these days and it’s actually not very hard to find people. The minute you move back to the US, they’ll know and will pursue collection. In the meantime, you can’t get a credit card, car loan, or mortgage. Your insurance rates will be sky high. No professional real estate company will rent to you. If prospective employers run credit checks (as some larger companies do), you will be unemployable. Credit scores, are considered by most institutions these days to be the single best predictor of a person’s behavior.
Beyond the practical issues, and at the risk of getting moralistic, it’s a sign of the times when people are shirking responsibility left and right and thinking they can live off of the system. It should be a matter of pride.
I agree with the previous post that if you’re going to pay it off, pay it all off. Run your credit report and see what you owe, contact your creditors and find out what the payoff is. If you’re going to do it, wipe the slate clean and pay everything off, and your credit score will start to recover.
[quote=“Neo”]Creditors are getting very savvy these days and it’s actually not very hard to find people. The minute you move back to the US, they’ll know and will pursue collection. In the meantime, you can’t get a credit card, car loan, or mortgage. Your insurance rates will be sky high. No professional real estate company will rent to you. If prospective employers run credit checks (as some larger companies do), you will be unemployable. Credit scores, are considered by most institutions these days to be the single best predictor of a person’s behavior.
I agree with the previous post that if you’re going to pay it off, pay it all off. Run your credit report and see what you owe, contact your creditors and find out what the payoff is. If you’re going to do it, wipe the slate clean and pay everything off, and your credit score will start to recover.[/quote]
There are two problems with this: first, not all “debts” are legitimate, and second, not all debts show up on a credit report.
I know without a doubt that I owe some money to a collection outfit. Unfortunately, I don’t know who they are, where they are located, or how to pay. My credit report showed up as being pristine the last time I looked at it (not very long ago). I don’t know where to send the approx. US$75 (plus fees and interest – probably about $300 total by now).
Then there’s the case of a friend of mine whose credit-card company issued a second card to some asshole without bothering to check that the asshole wasn’t an identity-thief. The thief used the card in Europe to the tune of over US$10,000 before the morons at First USA Bank figured out that something was wrong. For the last five years, they have been going after the legitimate cardholder – he even got a call from them while I was visiting him about three weeks ago – even though they know and admit that the debt was the result of fraud – and a fraud that was only possible because the retarded syphilitic shitheads in their own company screwed up royally. (Federal law says they can’t do anything to him, and in fact are legally prohibited from harrassing him like this – unless they call from their own internal debt-collection group, which is what they are doing despite knowing they are up shit creek without a paddle on ever actually collecting.)
As far as such debts affecting credit, they probably do, but I was still getting credit-card offers out the wazoo until I called that centralized “don’t send me this crap” number and got them to quit it. (Most places will listen; Capital One was the only place that kept bombarding me.)
Okami thinks that U.S. debts get forgiveable after 7 years. It used to be that bankrupcies had to be scheduled at least 3 years apart, and student loans had to wait 7 years before being discharged. I think that all this has gotten stricter in the last few years, though. (Like the other poster said, consult a lawyer.) My impression was that bankruptcy is not as easy as it used to be, and that debt forgiveness would basically be up to the judge (who as a rich guy who went to law school, will be unlikely to sympathize).
This makes me thing of an interesting jurisdictional problem. If a debt can be prosecuted here as well as there, presumably Taiwan rules would prevail in Taiwan, and U.S. ones in America. That could be good for the creditor, since they could “shop around” until the debtor finds himself in a country with strict enough laws. But bad for the creditor, because even if he wins his case in one country, another country might not accept that decision. Obviously there are practical problems with following people around the world like this, but wait ten years–who knows what will be possible?
Not sure about the States, but the ? years ruling after which debts just disappear, may not be quite accurate. In the UK, it is only after a bank has taken legal action against a person, received judgement that the clock starts ticking. If they take no action, then the outstanding loan remains on the persons history for all time or until paid off. There is a centralised agency where credit checks can be done and all the banks are participants in that scheme.
I haven’t checked this specific rule before, but I believe Traveller is right. A bankruptcy or judgment will definitely stay on your credit record for 7 years and then disappear. Not sure what happens if a judgment is unsatisfied (unpaid), or if the bank simply does not seek legal action. I believe in these cases, it just sits on the credit report forever.
In a bankruptcy, certain debts can get discharged/cancelled. You have to be in a bad enough situation to warrant cancellation of those debts, so it’s not really a situation where someone who is gainfully employed just casually happens to not feel like shouldering $10K in student loans and then files bankruptcy. At least that’s my impression.
Even if your bankruptcy is not approved, the fact that you filed it will be on the record forever. They are filed publicly under your social security number. Even after 7 years, any creditor or business associate etc etc interested enough in knowing if you have ever filed a bankruptcy can still look it up through various public records sources. After all, it’s a public court filing. The seven year limit is just a limit on the credit bureaus that are subject to specific statutes, but as a factual matter, your bankruptcy would be a matter of permanent public record and anyone familiar with public record sources can pull your bankruptcy filing. A creditor would simply have to use an information company that is not one of the big credit bureaus.
[quote=“ski”]I think your freind should take the responsibility an pay the loan.
Just my Thought
Ski
Student Loan Free since May 5, 2004 [/quote]
Hear! Hear!
After a rough couple of years, I got mine paid off. I have a sore spot about debt collectors now. I hate them with a purple passion. May they all die a slow and painful death. Preferably with extreme disfigurement so that their faces become as ugly as their soulless, black hearts.
well, while i don’t have student loan debt, nor credit card debt, i have over $1,500 in unpaid parking tickets in san francisco. this year marks the 7 year “drop off your credit report” mark. or does it? i know i can’t register my car in my name until they are paid… the total being the registration fee if i were to register it in my name again. i know i should pay them off… dam sfo metermaids… sharks they are. i do beleive it also have an outstanding phone bill from when i had my own line as a teenager. my dad stills gets mail from collectors for me.
i don’t think it’s entirely fair to assume someone with debt is untrustworthy. i, after racking up all those parking tickets at the age of 17, now have 3 credit cards and i never carry a balance. i learned that lesson the hard way after university when i only made minimun payments on my student visa. when i graduated i owed 2,000… that was a painful sum to hand over… especially since i had nothing to show for it except maybe liver damage (cash advances for beer). i am very responsible with money. i never borrow from friends or family, and if i use my credit card i never spend more than i know i can pay back right away.
as far as student loans… i think they should be paid back. i didn’t get my degree for free why should the next guy? :s
I think you’re on the hook for those parking tickets in Cali, seven years notwithstanding.
Agree with the sentiment on student loans. Who do you think pays for student loan defaults? All the other students with student loans end up shouldering the burden in the form of higher interest rates and fewer loans to students that need them. Taxpayers also foot the bill, since it’s a subsidized program. Why should anyone else pay for someone’s free lunch?
No one is suggesting someone with debt is untrustworthy. But someone who doesn’t pay their debts on time, or ever, may be a bad person to lend money to as a creditor. Credit scores are considered a good predictor of behavior. People with high debt levels can actually be considered very trustworthy, if they have a strong track record of paying their debts on time. Someone with high debt levels that pays on time, e.g. someone with a mortgage, will actually have a better credit score than someone who has never had debt in his life.
Another possible motivation to virtue: If you borrow money and don’t pay it back, then to the IRS, it might just count as unreported income. (They get mafia people all the time for failing to report their illegal gains.)
My friend says he uses offshore bank accounts. But I read in today’s paper that Europe is clamping down on those. (Hmmm, maybe one of those Nigerian banks can step in!)
Student Loan Free since May 5, 2004