I wanted consultation on debt. It's about student debt I owe in Canada. I'm just here for consultation nothing has

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Customer: Hi I wanted consultation on debt
JA: What state are you in? It matters because laws vary by location.
Customer: it's about student debt I owe in Canada
JA: What steps have you taken so far?
Customer: i'm just here for consultation nothing has happened yet
JA: Anything else you want the Lawyer to know before I connect you?
Customer: no
Answered by Debra in 11 mins 1 year ago
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Debra
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Debra
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168272 Satisfied customers

Jessica

Jessica

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Debra, Expert

Hello and Welcome to JustAnswer. My name is***** will be working on your question today and I am looking forward to our conversation.

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Debra, Expert

Please note that the experts don’t text so there may be a bit of a delay. If you don’t answer back for a while I may not be online when you do but I will never desert you and will check back often. As well, as I am working from home it is possible that I will be interrupted but I will always return back as soon as I can.

I am sorry to hear of this difficult situation.

Please let me know the basic facts and then your specific legal question.

Customer
Hi, I'm Canadian citizen that moved to the US a few years back and I am currently a US citizen living in California. I owe around $60,000 CAD in student debt to a private canadian bank. At the moment I only make $60,000 in California bay area which is not much at all since the area is so expensive. I am unable to pay my student debts in canada. The government in Canada (quebec) allows me to defer payments for a while but that time is up, soon I will have to start negotiating with the bank. Nothing has happened yet but I'm anticipating issues in the future. I just wanted to see what my options were. That is, how much power does a canadian bank have in pursuing me here in the US if I default? Can they have my property seized or garnish my checks? If I talk to them, should I withold my information or freely give it to them in the negotiating process?
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Debra, Expert

There is no information to withhold because there is no doubt that they can find you.

The CRA and the IRS cooperate and share information. They will absolutely be able to enforce the debt in the US. They could do it through the IRS and they could do it by suing you in Canada and then seeking to enforce the judgement in the US.

I wish I had better news.

Customer
I see, so my best option is try to negotiate something with the bank?
Customer
usually how much % do they garnish checks you think for someone of my income?
Customer
also will it be the IRS who directly takes my wages or is it another entity?
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Debra, Expert

Yes you should try to negotiate some thing.

I don't know the law in California but the law in California would apply in terms of what percentage of your cheques could be garnished.

If it is the government they can go through the IRS. If it is a bank they would sue you in Canada and then they would hire a lawyer or collection agency in the US.

Customer
the debt is from bank of montreal, will they directly go to collection agency/lawyer or will they first got to CRA and try to get IRS involved?
Customer
my debt is to bank of montreal and not quebec gov, quebec gov was only an intermediary in paying the bank interest
Customer
it's the aides financieres aux etudes
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Debra, Expert

Then the bank will sue you and then seek to enforce the judgement in the US.

Customer
or some french name like that
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Debra, Expert

Then the bank will sue you and then seek to enforce the judgement in the US.

I have to run out for about 90 minutes. I will check back to see if you had any further follow-up questions as soon as I return.

Customer
Thank you for your patience. Sorry I’m a bit confused, for debt owed to a private bank, will they hire a lawyer in California and sue me, or will they just go for a collections agency? Also, if they sue me in Canada, why would they hire a lawyer in California if they can already make a judgment in Canada and enforce it in the US?Just to clarify: it's a private bank I owe to, is it correct to assume that there is no point in withholding information because they can still find my info even though they aren’t a gov agency?I had read online that if you owe a debt and you default, a bank will hand the case to the CRA and CRA will come after you. This part is a bit confusing to me, if they are handing it to the CRA, then why would bank of montreal hire a lawyer here in California to sue me if the CRA takes over?Finally, if the bank sues me here in California, do they sue me for student loan debt or just general private debt?
Customer
Perhaps this is the process if I understand it correctly: They sue me in canada, obtain judgment, and then hire lawyer in California to enforce Canadian judgment? Then what role does collection agency play here?
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Debra, Expert

It depends on the type of loan that you have in terms of who will be going after you for the loan. If this is a straight loan from a bank the bank will sue you in Canada. Then they will retain a lawyer or a collection agency in the US to enforce the judgment. They don't have to sue you again in the US. They just have to register the judgement with a quart in California and then the judgement will have the same force and effect as if they had to do it.

If they were acting as agent for the government then the CRA would have an easier time in collecting in the sense that they would just get the IRS to collect for them. It's not that the IRS would sue you but the IRS could for example not give you a tax refund and hand it over to the CRA. Anyway you look at it your assets and income are going to be at risk until you pay the loan back.

Customer
interesting. two more questions (again thanks for your patience): If I get Canadian judgment, can I hire a lawyer to fight it in California or do I have to hire one in Canada?If a judgment is made in Canada, what is the nature of the judgment, just that I have to pay? Does the judge set the amount I need to pay per month, or he rules for garnishment/property seizure or is that negotiated and dealt with separately?
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Debra, Expert

You can only fight the lawsuit in Canada.

You'll be required to pay post judgement and pre-judgment interest and you'll be ordered to pay it all at once.

Customer
I see, now once judgment is made and served in California, does the local county deal with me directly (property seizure, wage garnishment etc.) or is it the collection agency that deals with me or does it just depend what the judge rules? If it is the collection agency, I assume I can negotiate payments with them or do I have to take this back to Canada?
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Debra, Expert

The judge doesn't rule on anything in California. They just accept the judgement and register it so that it becomes the same as a judgement in California and then the collection agency or the lawyer that was hired deals with that.

It is unlikely that they would negotiate any payments. Once there's a judgement there's no reason why anyone would negotiate. Because they can just seize everything you have and garnish your wages. So I don't think what point there to negotiate.

Customer
I see, I asked this as generally speaking you can always negotiate with collection agencies when debts are defaulted. I've seen people where they settle for less, or very minimum monthly payments. But from what I understand from you, once a judgment is passed the collection agency has authority to do what it wants within the limits of California (and not Canadian) law and doesn't need to negotiate. Right?
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Debra, Expert

The collection agency has authority to do what they want if they bought the debt. If they've been hired by the plaintiff then they can't do whatever they want unless the creditor agrees.

In terms of seizing assets it would depend on the law of California because you and your assets are there. What I'm saying is whenever there's a judgement there's often little reason to negotiate because if you have the money they want to take it one way or the other.

Customer
I understand. If I want to take it to an appeals court, can I do that in California?
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Debra, Expert

No. You would have to appeal in Canada but appeals are extremely expensive because if you lose you would be stuck with all of their legal fees. And for an appeal you have to find an error of law so you'd have to pay a lawyer to do that. I don't think you should consider an appeal as an option.

Customer
ok thanks. Last question for today: how would a private bank in canada be able to track me down in the US?
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Debra, Expert

That I don't know. I assume that they would hire a private investigator but I'm not sure.

Customer
Thank you very much, I really appreciate all of your help.
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Debra, Expert

You are very welcome.

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Debra, Expert

Thank you for trusting us to help you here at JustAnswer. I am marking this post as complete. If you would like to ask me more questions please start a new post and if you do if you say “This is only for Debra” I will be sure to give your post top priority.

Customer
sure, thanks!
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