Wednesday, June 20, 2012

Fleeing Debt - Will It Become More Difficult Or Even Impossible?

There were many reasons why people in the past fled their homelands. A significant one? Escaping the punishing existence of indebtedness. I know of many who have fled the U.S. because of their student loans. There are good reasons for why people have made that decision, and it is something that is not new. But will it become increasingly difficult for the indentured educated class to start anew? This debt punishment must come to an end.


Anonymous said...

Why am I not surprised? Are they withholding our passports now? You know it's starting to get bad when you're shunned by society from having a normal life because of your social class/cohort and then your own country closes off its borders to you. I don't see that scenario leading anywhere positive.

Nando said...

We will see a mass exodus of highly educated Americans in the next 5-15 years. There is more to life than gigantic shopping malls, reality TV and Disneyland.

Cryn Johannsen said...

@Anonymous 2:13 PM - nothing has happened yet. I am just asking the question and not trying to be alarmist.

Anonymous said...

Cryn, you mentioned something in one of your past radio interviews about how student debtor refugees were actually being "watched" and/or "followed" after fleeing the country. It sounds to me like it's just a matter of time until the reality of your question here comes to fruition. I hope you'll include more about that in your article. I am sorry to be anonymous, but I must for a very good reason. :(

Cryn Johannsen said...

@Anonymous 7:09 PM - hi there, I never said anyone was being "watched" or "followed." I did say that lenders have tracked people down in other countries and called them.

I hope the question doesn't come to fruition.

Anonymous said...

I remember reading somewhere that the US is the only country that taxes its citizens when they are living and working in other countries. So, while I hope the government doesn't start monitoring actual or potential debt refugees, I wouldn't be terribly surprised to see it happen.

Anonymous said...

The ease with with digital data can be exchanged and the increasing willingness on the part of sovereign nations to do so with other sovereign nations makes this an increasing likelihood. Yes, expats have to file tax returns every year and risk very serious consequences if they fail to do so (google FBAR and voluntary disclosure for an idea of serious this can get).

I love you Nando but you need to take a page from Cryn who channels her rage more effectively then you do by tempering it with tact and diplomacy. Iron fist in a velvet glove and all...:-)

If any of you reading are thinking of emigrating to Europe as an option, and can find a way to do so, I would recommend it highly. There is a social safety net in Western Europe that does not exist in the U.S. You will get some sort of housing, food, job training, healthcare etc. even if unemployed. Yes, the taxes are high and the standard of living lower. The tradeoff is, the system here gives people the chance to get back on their feet. If you have the chance to live and work here, I would highly recommend it for that reason alone.

I sometimes miss the U.S. but I do not miss the winner-take-all radical individualistic culture that blames all career failures on the individual instead of seeing unemployment as a social problem that the government needs to help solve through policy. My loans were in the lowish-5 figures when I graduated nearly 20 years ago (and would have been a lot higher without scholarships) but I paid most of them off while living in Europe. It took a long time but I never had homelessness hanging over my head. I was very, very lucky.

DJ said...


It's hard to determine for sure, since tax laws are complicated even for a single country, much less 200 countries, but far as I know the US is the only country that taxes citizens abroad. Libya used to be on the list of countries that did this, but its status is uncertain since the fall of Gaddafi (not that they were ever good company to be in). Strangely, some countries are actually trying to join this group, e.g. France:

"Hollande has pledged to renegotiate France’s accords with Switzerland, Belgium, and Luxembourg so he can more easily tax French expats. He plans a 75 percent levy on incomes of more than €1 million ($1.3 million)."

As for debt refugees, US Senate Bill S-1813, titled MAP-21, would restrict the availability of US passports for citizens owing more than $50000 to the IRS (see Section 40304). Under existing law, denial or confiscation of passports for debt is only possible in the case of unpaid child support. MAP-21 passed the Senate on March 14 and is currently pending before the House.