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IN debt and leaving the country

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Anonymous
Not applicable

IN debt and leaving the country

Hi 

 

I have about $15000 in credit card debt, plus about $12k on a car loan and about 2k in medical expenses.

 

I'm planning on leaving the country to go back to the UK, what are my best options for the debt?  Walk away and forget about it, or file chapter 7?

 

I don't plan on moving back to the US to live so will not need credit here in future once I leave.  

 

Are there any implications on coming back to visit, i.e. can a creditor have me detained by US immigration officials for oustanding debt?

Message 1 of 16
15 REPLIES 15
rprisco
Regular Contributor

Re: IN debt and leaving the country

Well good thing we in the USA no longer have debtor prisons, so chances of being detained probably small. Now if you purposly leave with out paying and purposely running up debt, you may be engaged in fraudulent behavior, that is a crime and they will pick ya up for it at the border. I'd pay the bills off, if u file bk under chapter 7 you may have a problem getting back in.

Afterall, would you want someone to come to your country, rack up a bunch of debt and stick it to your citizens by forcing higher interest rates and more difficulty getting credit? I think not, I think it's best you pay b4 leaving or in my opinion you should not come back.
Current Scores as of 8/18/17 all FICO 8 EQ: 695 EX: 673 *fico2 699 TU:645 bio has more.
Message 2 of 16
Anonymous
Not applicable

Re: IN debt and leaving the country

A bunch of things to keep in mind if you decide to move out of the States without paying your debts.  I know this list because I know a lot of ex-pats, and this is just the short list of what stories I've read:

 

  1. If the lender finds out you moved out of the country, it's feasible they will charge-off the debt as a profit loss and issue you an IRS form that the write-off is income.  The IRS is a debt you can't run from easily.
  2. If you ever try to get a job with an employer with a US presence, wage garnishment can chase you if the wage garnishment is attached to the US side of things.  This is rare, but it has happened to folks.
  3. If you go into business for yourself and need a business loan, even European and Middle Eastern banks will want some proof of what you did over the past few years and they CAN pay to have your US credit report pulled (with your approval).  I know a guy who moved to Saudi Arabia, started a multimillion dollar business and can't get an Amex business card or personal card, too.  Even though he doesn't come to the States, he wanted one.

I'd say there is really no risk of being held if you visit the States unless you owe the IRS.  Then assume it'll happen.  If a lender files a profit loss income statement to the IRS for the debts they wrote off, you will owe the IRS for sure.

 

If you have any family here, they may get phone calls for 7+ years from creditors, collections agencies and junk debt buyers.

Message 3 of 16
SouthJamaica
Mega Contributor

Re: IN debt and leaving the country


@Anonymous wrote:

Hi 

 

I have about $15000 in credit card debt, plus about $12k on a car loan and about 2k in medical expenses.

 

I'm planning on leaving the country to go back to the UK, what are my best options for the debt?  Walk away and forget about it, or file chapter 7?

 

I don't plan on moving back to the US to live so will not need credit here in future once I leave.  

 

Are there any implications on coming back to visit, i.e. can a creditor have me detained by US immigration officials for oustanding debt?


In my opinion it's not a good idea to just turn your back on your obligations. I think your best course of action is to repay your creditors if possible. if it's not possible, then you should file Chapter 7 and get legally discharged from your obligations. You should try to sell the car and repay the car loan.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 687

Message 4 of 16
Anonymous
Not applicable

Re: IN debt and leaving the country

You shouldn't do this to your allies.
Message 5 of 16
marty56
Super Contributor

Re: IN debt and leaving the country

I suppose there is very little they could do outside the US but could effect employment if they ask questions on your financial history.  As others have said first cleanup your mess then leave.

1/25/2021: FICO 850 EQ 848 TU 847 EX
Message 6 of 16
RobertEG
Legendary Contributor

Re: IN debt and leaving the country

Are you a U.S. citizen?

Message 7 of 16
Anonymous
Not applicable

Re: IN debt and leaving the country

PS.  RobertEG is really good at thinking through legal issues for folks.  I encourage you to get some advice from him.

Message 8 of 16
RobertEG
Legendary Contributor

Re: IN debt and leaving the country

My priamry concern would be with the IRS.

The creditor may ultimately file a form 1099c on the bad debt, which brings IRS into the play by noticing them that you have effective "income" that must be claimed in your federal tax return.

 

Will you have assets remaining in the U.S. that may ultimately be subject to IRS levy or attachment based on unpaid taxes?

Message 9 of 16
Anonymous
Not applicable

Re: IN debt and leaving the country

I have no assets at all in either country.

 

If I had the money to pay my debts I wouldn't be leaving the country, but I can't afford to live here any more due to healthcare costs mainly (and car insurance costs)

Message 10 of 16
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