March 04, 2021
Summary: If your credit card company is calling about unpaid debt, you might think getting out of the country is your best chance to move on. Find out why you should work out a plan for your debt before getting on that plane!
If you are planning on leaving the country with unpaid credit card debt, there are some things you need to know before you explore the world. There are some rather unpleasant consequences you could face if you choose to do so.
It is therefore important that you know what could potentially happen if you decide to leave the country before paying off your debt. Fortunately, you have to help you through this. We've put together a helpful guide that details everything you need to know about leaving the country with unpaid credit card debt.
Be sure to read over this information carefully before making any plans. In doing so, you can work toward settling your debts before you leave, thus avoiding trouble later.
First and foremost, you might be sued by your credit card company. This might not seem like a big deal if you're living overseas, but it is. This is especially true if legal proceedings start while you're still in the country.
If the credit card company chooses to follow through, a judge will most likely render a judgment against you. If or when this happens, the credit card company can take money out of your bank account here in the United States without your permission.
And if you are working overseas but for a company based here in the States, your wages can be garnished until your debt is paid off in full.
Okay, but what if you don't have a bank account in the United States, nor work for a company based here? It's possible that you can get a fresh start without repercussions. But if you have anything of value left behind, the court can seize it, sell it, and give the money to the credit card company.
Let's assume that you don't have anything here in the United States that the court or credit card company can take from you. Leaving the country with unpaid credit card debt can still come back to haunt you in other ways.
It doesn't matter whether you live here in the States or on the moon; your credit score will be negatively affected if you have outstanding credit card debt. The good news is that your U.S.-based credit score can't follow you outside of the States.
The bad news is that if you ever need to return to the United States, you'll pick up your old credit score right where you left it. As such, you'll be in for a hard-fought battle to get it back in good standing.
That's right; failure to right the wrongs of your unpaid credit card debt could result in you owing money to the IRS. How does that work? It's quite simple. Let's say you owe a credit card company $5,000 and never pay it.
You figure leaving the country with unpaid credit card debt is a great way to start over for a while. The credit card company eventually writes off your debt, and you think all is well. Unfortunately, in writing off your debt, the IRS picked it up and got seen as income.
Income that you now owe taxes on.
If you ever want to return to the United States, you could have your passport revoked upon arrival until you pay the taxes you owe on that $5,000. The trouble doesn't end there, either. Let's look at some other issues you could run into by leaving the country with unpaid credit card debt.
Even though your U.S.-based credit score won't follow you overseas, it can still be reviewed as a way to determine your eligibility to establish a place to live. Both lenders and landlords could very well look at your credit score from over here.
If it is evident that you fled the United States to avoid paying outstanding credit card debt, it's very unlikely that any loan agencies or landlords will be willing to take a risk with you.
After all, if you ran away from one debt, who's to say you won't do it again? If you run into this issue once arriving overseas, it would effectively negate your whole reasoning to leave the United States.
In time, your debt will probably be sold to a collection agency. And once your debt is in their hands, you're sure to face unrelenting collection tactics. This includes calling you, emailing you, and attempting to reach you in any way that they can.
This may not seem like a big deal while you're out of the country. But if you ever decide to return, you could be sued and taken to court.
While you are in a foreign country, however, the collection agency can only sue you by going through a foreign court. Unless you owe an exceptionally large amount of debt, it's unlikely that the collection agency will be willing to pay the costly fees associated with suing you out of the United States.
If you're thinking about leaving the country with unpaid credit card debt, stop. Before you entertain the thought a moment longer, formulate an action plan to pay off the debt you owe. Contact the credit card company that you owe money to and stick to a repayment schedule until your debt is paid off.
This will likely mean postponing your plans to see the world. But in doing so, you will effectively avoid more painful consequences later on down the road. If your debt has already been turned over to collections, you might be able to get a discount if you agree to pay off the loan.
Then, you can pursue your dreams abroad without the fear of running into legal troubles.
SoloSuit makes it easy to respond to a debt collection lawsuit.
How it works: SoloSuit is a step-by-step web-app that asks you all the necessary questions to complete your answer. Upon completion, you can either print the completed forms and mail in the hard copies to the courts or you can pay SoloSuit to file it for you and to have an attorney review the document.
"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James
Here's a list of guides for other states.
Being sued by a different debt collector? We're making guides on how to beat each one.
Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.