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Author Topic: Has anyone successfully evaded collections agencies by exchanging fiat into BTC?  (Read 3429 times)
nutildah
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April 08, 2015, 09:56:21 PM
Merited by Foxpup (6)
 #1

Back in my naive days, when I actually thought having a degree meant something, I managed to accrue a significant student loan debt, mostly from the out-of-state graduate school (that I did not even graduate from).

The plan always was to get a good enough job via the degree that would eventually help me repay the student loan. Fast forward 12 years: I am near-broke with a below-average salary job and a couple extra grand built up in interest on the loan. The loan agency will not make any deals with me to reduce the monthly payments, so basically I can either make my loan payment _or_ have food and a roof above my head.

Today I received a call from the agency (Aspire Resources) telling me I'm about to go into default, even though I made a nominal payment to try to reset the 270-day rule (turns out they only accept the monthly payment in full as criteria for "payment" -- I'm not sure if this is legal or not). So I quickly do some research and find out that not only can student loan collection agencies garnish your wages with a court order, but they can also freeze/empty your bank account and take back any tax refund money you might have.

So my question is, how feasible is it to use cryptocurrency should I have to hide money from these debt collectors? I can't pay my bills in bitcoin, and if bitcoin should drop down to $20 per BTC, then I might as well just have handed over the money to these weasels in the first place... Don't think the property manager will accept BTC either for rent - he's at least 70 years old.

My boss on the other hand is quite tech savvy and I'm sure I could request to be paid in bitcoin. The problem then becomes, can wages denominated in BTC also be garnished? Hard to say since its currently classified as "property" by the IRS. I live in a remote area which hardly even knows or much less understands bitcoin.

Has anyone here been in this situation before? Your thoughts on the matter are appreciated.

Thanks from a broke ex-neuroscientist.

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April 08, 2015, 10:03:19 PM
 #2

What are you trying to do? It's certainly possible to hide some money with BTC but that won't change your debt.
About your salary being paid in BTC, don't think about it, it would not work. Your employer will keep you on its payroll, so nothing would change. There are many ways to hide money, but you can't hide a salary from a regular job.

If you're looking for a trading/lending place, better avoid Poloniex, as it socializes losses. Learn more about it on this topic.
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April 08, 2015, 10:09:13 PM
 #3

I don't live in the U.S. but usually a collections agency is allowed to take most of your property if you can't pay so it doesn't really matter. They won't simply give up just because you're out of money they'll just take your car or anything else.

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April 08, 2015, 10:15:12 PM
 #4

sell everything you own / borrow as much money as you possibly can , empty your fiat currency account(s) , convert all your available currency into bitcoin through anonymous means (in person cash for bitcoin) , mix it thoroughly and put it on a flash drive , then declare bankruptcy or expatriate from the country , and then convert bitcoins back into fiat currency through anonymous means ... btw what i am suggesting is *highly* illegal and would constitute committing bank/credit fraud ... but it would fix your money woes ... so ... depending on just how desperate your situation is ... might be worth it ...

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April 08, 2015, 10:21:26 PM
 #5

You also have the option of a fully legal bankruptcy, but they might end up taking a % of your current income. Talk to an expert since you might shave a big chunk off of your debt.
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April 08, 2015, 10:24:56 PM
 #6

If you really want to hide your money with Bitcoin, your best bet would be to find a Bitcoin ATM without KYC/AML compliance (not sure if that even exists in your country) and transfer the money into Bitcoin. That way, they can't get your money. However, I'm not sure if this is even legal or not, so it's up to your own jurisdiction.
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April 08, 2015, 10:28:45 PM
 #7

You also have the option of a fully legal bankruptcy, but they might end up taking a % of your current income. Talk to an expert since you might shave a big chunk off of your debt.

Federal student loans are exempt from bankruptcy.
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April 08, 2015, 11:14:29 PM
 #8

I don't live in the U.S. but usually a collections agency is allowed to take most of your property if you can't pay so it doesn't really matter. They won't simply give up just because you're out of money they'll just take your car or anything else.

I thought even a collection agency has to sue you in a court of law and obtain a judgement against you before they could actually take anything from you.

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April 08, 2015, 11:17:47 PM
 #9

You also have the option of a fully legal bankruptcy, but they might end up taking a % of your current income. Talk to an expert since you might shave a big chunk off of your debt.

Federal student loans are exempt from bankruptcy.

Sounds like a problem, thanks for the correction.
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April 08, 2015, 11:24:21 PM
Merited by Foxpup (4)
 #10

okay so here's your problem:  As soon as a judgement is made to garnish your wages, it will then become a liability of your employer, NOT you, to repay the money.  It doesn't matter if you have your check paid out in BTC or not, they will still work with your employer to deduct (usually around 20%) of your paycheck to meet legal garnishment obligations. 

Do NOT approach your employer to pay you in BTC if you know that your primary intention is to simply dodge paying the loan.  Now, its okay to ask him to pay you in BTC if that's indeed what you really want, but if you tell him that you're doing this to dodge debt obligations, He may get scared and decide to let you go if he's fickle about it.  You may be an awesome employee, but some people are iffy like that and he may fire you to simply get around having to deal with it. 


What state do you live in?  You may have legal remedy.

https://www.tuition.io/student-loan-help/how-to-guides/how-to-lodge-a-complaint-against-your-student-loan-servicer/

hth

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April 08, 2015, 11:42:11 PM
 #11

I don't live in the U.S. but usually a collections agency is allowed to take most of your property if you can't pay so it doesn't really matter. They won't simply give up just because you're out of money they'll just take your car or anything else.

Where do you live in Nigeria or something ? The US debt is trillions of dollars over the GDP, it's impossible to pay back. Debt collections and student loans companies are just floating as long as they can, and it's pretty rare to have anything other then 15% of your pay deducted, and even that is under worst case scenarios if you are actively avoiding even the slightest contact or payments of your debts.

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April 08, 2015, 11:45:17 PM
 #12

I believe there was an article about people hiding their money in btc when going through divorces. Sounds like you could "hide" yours too if you really wanted to
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April 08, 2015, 11:55:10 PM
 #13

sell everything you own / borrow as much money as you possibly can , empty your fiat currency account(s) , convert all your available currency into bitcoin through anonymous means (in person cash for bitcoin) , mix it thoroughly and put it on a flash drive , then declare bankruptcy or expatriate from the country , and then convert bitcoins back into fiat currency through anonymous means ... btw what i am suggesting is *highly* illegal and would constitute committing bank/credit fraud ... but it would fix your money woes ... so ... depending on just how desperate your situation is ... might be worth it ...

I like this, but my problem isn't that serious. I know somebody who owes $140k in student loans and somehow it doesn't upset them at all; they've been racking up & evading for over 20 years. Oh, and they have no intention of paying it back.

okay so here's your problem:  As soon as a judgement is made to garnish your wages, it will then become a liability of your employer, NOT you, to repay the money.  It doesn't matter if you have your check paid out in BTC or not, they will still work with your employer to deduct (usually around 20%) of your paycheck to meet legal garnishment obligations.  

Good to know... You're right, he probably wouldn't want to take on the extra hassle or responsibility.

I thought even a collection agency has to sue you in a court of law and obtain a judgement against you before they could actually take anything from you.

You are correct.

Thanks everyone else for the tips.


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April 09, 2015, 12:07:38 AM
 #14

Where do you live in Nigeria or something ? The US debt is trillions of dollars over the GDP, it's impossible to pay back. Debt collections and student loans companies are just floating as long as they can, and it's pretty rare to have anything other then 15% of your pay deducted, and even that is under worst case scenarios if you are actively avoiding even the slightest contact or payments of your debts.

No, I live in Europe. How exactly is the U.S. government debt related to this thread? Collections agencies usually sue people if they don't pay (at least if the amount is significant - I guess OP would try to hide it if it wasn't)

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April 09, 2015, 12:10:09 AM
 #15

Irrelevant. The idea of Bitcoin is not to evade collection agencies, the idea is to avoid banks, financial institutions, or other now-obsolete 3rd party middle men, who have been charging us ridiculous fees for shitty service, without adding of created any actual value.

In theory, there's no difference between theory and practice. In practice, there is.
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April 09, 2015, 12:17:29 AM
 #16

Irrelevant. The idea of Bitcoin is not to evade collection agencies, the idea is to avoid banks, financial institutions, or other now-obsolete 3rd party middle men, who have been charging us ridiculous fees for shitty service, without adding of created any actual value.

Your post is offtopic. Bitcoin doesn't require financial institutions, but doesn't exclude them either.

OP: I suggest you find a way to settle this - trying to hide it may end up being more expensive and will definitely do more damage to your credit score.

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April 09, 2015, 12:34:48 AM
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Irrelevant. The idea of Bitcoin is not to evade collection agencies, the idea is to avoid banks, financial institutions, or other now-obsolete 3rd party middle men, who have been charging us ridiculous fees for shitty service, without adding of created any actual value.

My student loan has been bought and sold by so many third parties, you can bet somebody's gonna shell out for a 4th party collection agency by this point.

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April 09, 2015, 12:37:08 AM
 #18

In some parts of the world if you do not pay back the debt the debt collector can seize any property from you. In the uK debt collection agencies send out bailiffs to the debtors house to collect any property that might be worth something, like cars, computers, furniture, jewellery, which will be auctioned off for roughly 50% of it's value and paid off against the debt. I assume this could extend to Bitcoin. You cannot prevent the Bailiffs from entering your house, if you do they will call the police who will try and force their way in. And you have to pay the Bailiffs a fee too which is automatically added onto the debt. They can also come back as many times as they want. This might seem bad but it isn't as bad as other parts of the world like South Korea where the debt collector can literally just show up at your door and break your legs if you don't pay up.

I'd say it may be possible to hide your money with Bitcoin. If you don't give up the password, there isn't a whole lot they can do about it. Though I strongly advise against doing this as it's almost certainly illegal, though I am not an expert on law or anything.

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April 09, 2015, 12:45:58 AM
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In some parts of the world if you do not pay back the debt the debt collector can seize any property from you. In the uK debt collection agencies send out bailiffs to the debtors house to collect any property that might be worth something, like cars, computers, furniture, jewellery, which will be auctioned off for roughly 50% of it's value and paid off against the debt. I assume this could extend to Bitcoin. You cannot prevent the Bailiffs from entering your house, if you do they will call the police who will try and force their way in. And you have to pay the Bailiffs a fee too which is automatically added onto the debt. They can also come back as many times as they want. This might seem bad but it isn't as bad as other parts of the world like South Korea where the debt collector can literally just show up at your door and break your legs if you don't pay up.

I'd say it may be possible to hide your money with Bitcoin. If you don't give up the password, there isn't a whole lot they can do about it. Though I strongly advise against doing this as it's almost certainly illegal, though I am not an expert on law or anything.

Wow. I don't use debt except for my mortgage but I would love to see these "bailifs" try that in the US. We have car recovery agents assaulted and even shot at times. I guess we have differeing opinions on private property and owership here.

To the original question, put your coins in a paper wallet and hide it well. Then wipe the hard drive on the computer you used to generate the wallet.   

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April 09, 2015, 01:10:07 PM
Merited by Foxpup (2)
 #20

What is the right thing to do? You voluntarily incurred a debt. Don't let it be on  your conscience or your record by trying to weasel or rationalize a way out of it. Better to be poor and of good character than evade the debt and carry the weight of sin thereafter, not to mention any other consequences.

I understand about the frustration of carrying debt for an unused degree; I've still got five years payments to make on my (stay at home) wife's degree. But whether it was useful or not is irrelevant. It's not the lenders fault if we buy something on credit and it winds up sitting around the house unused. And while I fault the "education" industry for over-selling its wares, it's still a choice people make for themselves in the end.

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