VIC Unable to Pay Student Loans from American Debt Collectors - Options?

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3 September 2015

I am a non US citizen living in Australia. I am a Australian Citizen. I have ~$88k in private NON COSIGNED student loans from an American loans provider. I have fallen behind payments and recently went into default. Is it likely that the debt collection agencies will pursue me overseas if I don't pay up any time soon? I had to make the choice of paying my loans or paying for costly medical bills for a sick parent. Obviously I picked my parent

Now that I have defaulted, I understand that the lender has to first get a judgement in the US and then enforce that in Australia to get the money from me. What do you think will happen next? What steps do the debt collectors need to take to collect the debt from me?

Is there anything I can do to stop them coming after me? (apart from paying the loans - which I would, if I could - after all iIhave been paying for the last 5 years)

I have read that a US judgement can only be enforced where
  • the defendant voluntarily submitted to the court's jurisdiction; or (What is voluntary submission?)
  • the defendant was ordinarily resident or present in the US at the time that he or she was served with the originating process. (what does originating process mean)
Source: Calytonuz

What does this mean for me? And what steps should I take to protect myself.


Victoria S

Well-Known Member
9 April 2014
I'm familiar with Australian law not US law, the US entities would have to follow a process that would likely be set out in US law. I imagine it wouldn't be too difficult to get a judgement against you because you have clearly stated that you've defaulted. The issue will be how much effort they're will to go to in order to enforce it - perhaps $88k is a significant amount that they'll want to recoup.

I'm assuming you haven't been able to negotiate a new payment plan? Were you studying in the US? Ideally you'll get it sorted without going through the courts. Also, having a judgement against you may restrict you from travel to the US in the future.

The questions you're asking relate to interpretation of common law. I suggest you search and read up cases that discuss those terms on AustLII. There may also be some journal articles on those topics.

Here are some articles relating to debt and debt collectors from an Australian perspective: