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Tips for Leaving the Country With Unpaid Credit Card Debt

Hannah Locklear | December 08, 2023

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: It is not a good idea to leave the country with unpaid credit card debt. While debt technically won’t follow you abroad, you may suffer several consequences for trying to flee from it: you may be sued and have your wages garnished; your credit score will suffer; you may have to pay taxes on your debt. These are just a few consequences of leaving the country with unpaid debt. SoloSuit can help you fight off debt collectors in and out of court—and win.

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 decide to leave the country before paying off your debt.

Fortunately, 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.

Settle your debt before leaving the country with SoloSettle.

What happens to unpaid credit card debt if you move abroad?

If you move abroad while you have an unpaid credit card debt, it won’t disappear.

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 and 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 look at an example.

Example: Megan had plans to move to Europe for a few months at the end of the year. In June, she found out she was being sued by LVNV Funding for an unpaid credit card debt. She used SoloSuit to respond to the case, buying herself some time to work out another plan. After taking a closer look at her finances, Megan realized she could afford to pay off 70% of the debt before leaving for Europe. She used SoloSettle to send a settlement offer to LVNV Funding, and after a few rounds of negotiations, they accepted a settlement of 65%. Megan saved some money, cleared her debt before traveling, and the case was dismissed.

Respond to a debt lawsuit before leaving the country

If you’re being sued for a debt, you should respond to the lawsuit as soon as possible, even if you have plans to move abroad.

Failure to respond to a debt collection case can lead to serious problems. For example, if you ignore a debt lawsuit, the court will order a default judgment against you. With a default judgment, creditors and debt collectors can garnish your wages and seize your property.

You don’t have to hire a lawyer to respond to your case. You can use SoloSuit to draft and file an Answer and increase your chances of winning by 7x.

Follow these three steps to respond to a debt lawsuit:

  1. Respond to every claim against you. When you’re sued, you should receive court papers that list each allegation against you. In your Answer, you must respond to each claim by admitting, denying, or denying due to lack of knowledge. Most lawyers recommend denying as many claims as possible to give yourself a strong case.

  2. Assert your affirmative defenses. An affirmative defense is any legal reason that you should not be held responsible for the debt. For example, the statute of limitations on your debt may have already expired, or perhaps you’ve already paid off part of the debt.

  3. File the Answer with the court, and send a copy to the opposing attorney. Once you’ve drafted a response, be sure to file it into the case before your state’s deadline. You must also serve the opposing lawyer with a copy of the Answer document.

SoloSuit can help you draft and file an Answer in all 50 states.

Learn more about these three steps in this video:

Now, let’s explore other consequences of leaving the country with unpaid credit card debt.

There will be consequences if you leave the country with unpaid credit card debt

Other than a potential credit card lawsuit, you risk several other negative consequences if you leave the country without paying off your credit card debt. Below, we’ll take a closer look at some of these consequences.

Your credit score will suffer

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.

File a response with SoloSuit to help protect your credit score.

You'll probably have to pay tax on your debt

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.

Use SoloSuit to respond to debt collectors and stay out of trouble with the IRS.

You might not be able to get a home

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.

You'll have a debt collector after you

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.

Settle your debt before going abroad

Who wants to embark on a new journey, in a new country, and feel the constant nagging of a debt hanging over their head?

We’re guessing you don’t.

That’s why you should settle your unpaid debts before you leave the US. Here’s how.

Most creditors and debt collectors are willing to negotiate a debt settlement for less than the original amount, especially if they know you're about to leave and potnetially lose contact. In fact, the average consumer can settle a debt for 50% of its original value when working with a debt settlement agency.

So, if you know that you owe a debt, consider reaching out to your creditor or debt collector to discuss a settlement offer.

SoloSettle, powered by SoloSuit, can help you send and receive settlement offers until you’ve reached an agreement. Then, SoloSettle will manage the settlement agreement documentation for you and send your payment to the collectors, keeping your financial information private and safe.

Watch this video to learn more about how to settle a debt:

Don't abandon your debt issues by leaving the country

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.

Let SoloSuit help you fight debt collectors before leaving the country.

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

>>Read the NPR story on SoloSuit. (We can help you in all 50 states.)

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