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Domesticate a Judgment Overseas

What are the chances of my student loan being collected if I live overseas?

There are obviously better U.S. states than others in which to be facing debt troubles. How about when it comes to Americans who live overseas? Which of these places is it difficult or easy for the U.S. government to pursue by seizing assets (house, bank account, car) via domesticating a debt for a defaulted federal student loan: Panama, Costa Rica, Japan, the European Union?

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  • The Dept. of Education can pursue wage garnishment administratively in the US. However, it is unlikely it has those same powers outside of the US. Accordingly, the Dept. of Education would need to obtain a judgment in the US like any other creditor, and t

A creditor who obtains a judgment may be able to file a petition in your new country of residence to “domesticate” its U.S. judgment in the other country, depending on the country and what treaties the U.S. government has signed with that country relating to judgments.

The likelihood that a creditors will pursue such complicated and expensive legal proceedings simply to collect on your delinquent debts is dependent on the size of the debt. A good rule of thumb is the larger the judgment the greater the chances of the judgment being domesticated. A $1,000 judgment will probably not be domesticated. A $1 million judgment probably will. If a debt is in the hundreds of thousands it is anyone's guess if creditors will use the local court system to collect the debt.

Ease of Domesticating Judgment in Foreign Country

Regarding your question as the the relative ease it is for the US government to pursue judgments, I think you may be under a false assumption. If a person in the US has a judgment against a person residing outside of the US, neither the federal or state government will pursue the debtor. It is up to the judgment creditor to domesticate the judgment in the foreign country. Of course, if the judgment creditor is an agency of a state or federal government, then that agency can follow the rules of civil procedure like a private citizen can.

I am reluctant to comment on your question regarding the relative ease of domesticating a US judgment in the countries you mentioned. First, I do not have experience in domesticating judgments in the countries you mentioned and the EU. Second, you as asking for a legal opinion, which I will not give you. My guess -- note my word choice -- is that given the close relationship and economic ties the US has with all of the jurisdictions you mentioned there will be little difference in the ease of domesticating a judgment with any of these.

The best way to learn the answer to your question is to select a country in which you want to live and consult with a lawyer experienced in international law in that country. Ask him or her how frequently US judgment-creditors domesticate judgments in their country, and the relative ease it is for a judgment-creditors to do so. If the process is straight-forward and well-known, then it is likely the cost will probably be low, which increases the probability of it occurring.

Regarding your question about federal student loan collections, I do not know what history the Department of Education has in pursuing debtors who now live outside of the US. As you are probably aware, the Department of Education can pursue wage garnishment administratively in the US. However, it is unlikely that the Department of Education would have those same powers outside of the US. Accordingly, the Department of Education would need to obtain a judgment in the US like any other creditor, and then attempt to domesticate that judgment like any other creditor in the debtor's country.

I hope this information helps you Find. Learn & Save.



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