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What Happens With Credit Card Debt If You Move Abroad?

by
author image Sarah Jackson
Sarah Jackson has been writing freelance for almost four years, the majority of her work being featured on Adventure Journey, an online travel publication. She is currently in her final year of her M.S.W. degree at Temple University, with a B.S. degree from BYU.
What Happens With Credit Card Debt If You Move Abroad?
No matter where you move abroad, credit card bills will follow. Photo Credit Gabriele Maltinti/iStock/Getty Images

Continues to Exist

Just because you are no longer residing in a certain country does not mean your credit card debts will cease to exist. Credit card companies will still work to obtain the money owed to them by you. After a certain period of time, your account will likely be turned over to a collection agency to continue the work. This is especially harmful if you are planning to move back into the country eventually, as your credit record will reflect nonpayments. Some people have said to have collectors following them to their new country of residence, although the country may or may not be required to extradite you for having debts.

Work Out A Payment Option

If you are leaving the country with the intention to continue paying off your credit card debt, contact your credit card company and make it aware of your situation. Often it will be able to work with you in determining how to receive payments from you in your absence. This may include automatic withdrawals from an in-country bank account, wiring money to a friend or relative for them to send in, or making an arrangement with a bank or lender in your new country of residence.

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Settlement or Bankruptcy

If you are having difficulty in paying your credit card monthly payments, it is not uncommon to consider either a debt settlement or a bankruptcy to clear yourself of financial obligation before leaving the country. Debt settlement is an arrangement between the lender and debtor (sometimes involving a third party) where the debt is paid off in one payment, at a much smaller amount than what was originally owed. Filing for bankruptcy can relieve you of any financial obligations toward your credit card company. Consider these options carefully since both can cause significant damage to your credit score and limit your financial capabilities should you return to the country.

Leaving to Escape

There are some who leave the country as a method of escaping debt that they are unable to pay. Since debt continues to exist long after you have left the country, this is not necessarily a viable option. Also, there is a law in effect that gives credit card companies the ability to essentially "freeze" your account until you return to the country, then they can continue to pursue you for what is owed to them. There will likely be other unforeseen consequences of taking this action and, as such, it is wise to try to come to some agreement with your credit card companies before leaving the country.

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References

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