What Happens With Credit Cards Debt If You Move Abroad?
By Oscar Davis
Having a credit card means you can make purchases even without enough cash. Besides, carrying a credit card is safer than having a bundle of notes in your pocket.
Convenience and safety are just two of the many reasons why many people are choosing to use credit cards as a form of payment over cash. And this isn’t just true for US consumers, as there has been an increase in the use of credit cards even in countries where cash was traditionally used for most purchases. For instance, today, you’ll find many credit cards in Germany, a country whose consumers are known to have a strong preference for coins and notes.
Unfortunately, the preference for cashless modes of payment has also led to the rise in credit card debt. And when the weight of this debt becomes a burden, some people resort to desperate measures like moving abroad to escape the debt.
So, what happens to your credit card debt when you move abroad? Moreover, is moving overseas the best way to deal with your unpaid debt?
Let’s look at the nitty-gritty details of why moving to a new country if you owe your credit card company money may not be the way to wipe your financial slate clean.
Are You Allowed To Leave The Country When You Owe Your Credit Card Company Money?
First things first, you can’t be arrested for consumer debt. It’s even illegal for a creditor to threaten you with arrest due to unpaid debt.
Therefore, your creditor will probably use other legal measures, such as suing you to collect their money, but they can’t prevent you from moving abroad due to unpaid credit card debt.
What Happens To Your Credit Card Debt When You Leave the Country
Well, nothing happens to your debt when you move to another country. In fact, the debt will remain in your name even when you move abroad.
Notably, if you’re hoping to escape the debt by moving overseas, this may not happen.
Once your creditors realize that you’re no longer answering their calls, emails, or letters, they may file a lawsuit to collect the debt. If you don’t show up in court, the judgment will be made, and you can bet it won’t be in your favor. The creditors will then try to reinforce the judgment against any assets or monies you have left in the country.
Additionally, even if the statute of limitation on debt is approaching, and you’re hoping to escape the debt through this means, keep in mind that the creditor can still sue you in court to prevent the debt from expiring.
Further, once a judgment is given ordering you to pay the debt, the creditor can still renew the judgment so that you’re obligated to pay the debt for many years to come.
Another thing to keep in mind is that your plan to live abroad may not work. If you decide to return home in such a situation, you’ll return home to seized assets and frozen credit card accounts.
Moreover, if the judgment to pay the debt is still in force, your creditor will still have a right to seize your wages.
Can Credit Card Debt Follow You Abroad?
Unfortunately, your unpaid debt will make it very difficult for you to live a full life in your new country.
Thanks to the internet, your creditor may track you down and decide to sell your debt to a partner debt recovery agency in your new country.
Unfortunately, the new debt collector may use the same methods your former collector used to get you to pay up. They may also involve the courts, depending on your new country of residence.
Besides, you may have to undergo a residency application process when you move abroad. Part of this process may involve the authorities reviewing your income and credit report. If the authorities discover you’re moving to avoid paying debts, your application will probably be denied.
Also, consider that once you move to your new country, you’ll need to build your creditworthiness from scratch. Some countries will check your former credit report to determine if you qualify for a loan. This means that your bad credit score will follow you abroad, making it very difficult for you to secure any form of credit.
Consequently, you’ll have to use cash even for significant purchases such as buying a car or a home.
What Do You Do If You’re Drowning in Credit Card Debt
Your credit card debt will never go away, even if you decide to leave the country. Here are better ways to deal with your unpaid credit card debt instead of fleeing the country.
1. Communicate With Your Creditors
If you’re having trouble paying your credit card debt, the first thing you should do is call your credit card company.
Once you explain your situation, the company will probably come up with ways to help you meet your monthly payment. For instance, they may lower your payment or reduce your interest rate for a given period.
Even if you’ve already left the country, be proactive and communicate with your creditors. Be honest about your situation and ask if the creditor can agree to defer the payments until you get back on your feet.
2. Pay As Much As You Can While In the Country
Try to pay as much debt as you can while still in the country. This will help you have a worry-free life once you decide to move abroad.
Start by paying the credit card with the lowest balance to motivate yourself. This method, also known as the debt snowball method, is very effective if you’re able to pay more than the minimum monthly payments for your credit cards
3. Seek Help
If you’re finding it difficult to reduce your credit card debt on your own seeking professional help may be a good idea.
For instance, a credit counselor will give you helpful tips that can help keep you on the right debt repayment track. They may also add some professional weight to any negotiations you might have with your creditor. The credit counselor can also get you a lower interest rate or even negotiate a debt management plan.
In closing, moving abroad won’t make your credit card debt disappear. In fact, the debt may make your life abroad very difficult.
The best thing to do if you’re dealing with a huge unpaid credit card debt is to talk to your creditors. Also, try to pay as much debt as you can before moving. You can also seek the help of a debt counselor.
Oscar Davis is a freelance writer from Leeds, England.
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