Tips for Leaving the Country With Unpaid Credit Card Debt


Here are a few key things that can happen if you move abroad with unpaid credit card debt:

  • Your creditor can still sue you in the U.S. Even if you move abroad, creditors can file a lawsuit against you in a U.S. court to collect the debt. If you don’t respond, they may get a default judgment against you.
  • Debt collectors can still contact you. Debt collection agencies may be hired by your creditor to track you down internationally and try to collect.
  • Your credit score will be damaged. Not paying credit card bills will severely hurt your credit, making it hard to get loans if you ever move back.
  • You may owe taxes on forgiven debt. If the creditor writes off your debt, the IRS may see it as taxable income. You’d owe taxes on the forgiven amount.
  • Your Social Security benefits could be garnished. If you have Social Security payments, up to 15% can be garnished to pay federal debts like unpaid taxes or student loans.
  • Your U.S. assets may be seized. Creditors can try to seize any U.S.-based assets you still have, like bank accounts, to collect on the debt.
  • You may not qualify for a U.S. passport. The State Department can deny passport applications for those with seriously delinquent tax debt over $51,000.

So in summary, moving abroad does not erase unpaid debts. Creditors have ways to pursue you and can make life difficult if you ever return to the U.S. It’s best to address credit card debts before moving overseas.

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