Leaving the Country with Unpaid Credit Card Bills (Should You?!)

leaving the country with unpaid credit card bills
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Do you have a stack of unpaid credit card bills? Do you get a sinking feeling every time you go to the mailbox or your phone rings? It’s a terrible situation to be in. What if you’re thinking about going overseas and leaving the country with unpaid credit card bills? Is that possible and what happens if you do? Find out now.

leaving the country with unpaid credit card bills

Leaving the Country with Unpaid Credit Card Bills

The bad news is there are unpleasant consequences of leaving the country and not paying your credit card debt. 

These includes:

1. You Can Be Sued

The good news is that your credit card company isn’t going to sue you in a foreign court, so that’s on the plus side of the equation.

They can’t come after you if you are living overseas.

The bad news is if your credit card company starts legal proceedings before you leave the country, they can follow through and win a judgment against you.

But, hey, you’re living large overseas, so who cares, right? 


You should care because there are a few terrible things that can happen:

  • They Can Levy Your Bank Account – If you have a bank account in the United States and your credit card company has won a lawsuit against you. They can levy your account. 

That means they can take money out of your bank account without your permission. 

  • They Can Garnish Your Wages – If you are living overseas but working for a U.S. based company, they can, and most likely will go after your wages. 

The company will have no choice but to give them a percentage of your salary out of each paycheck.

So, the credit card company will get its money one way or the other.

Of course, if you aren’t working for a company based in the United States, then they can’t touch your salary.

A friend of mine named Dan moved overseas. He had always wanted to live in Paris, France, so he finally made the move.

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The problem was he had a lot of debt, including credit card debt, and he was behind on payments.

I guess, he saw moving as a way to start over, and in a way it was.

The problem was that one of the companies that he owned money to started legal proceedings before he left the country.

Dan didn’t worry about it too much. He figured he had left it all behind him.

He had closed his bank accounts and thought he was covered.

He forgot about a small piece of ground he owned. It was left to him by his grandfather. 

It wasn’t much but it was worth about $10,000 dollars. 

Because he wasn’t in the country to go to court, the judge ruled in favor of the credit card company.

While Dan didn’t have any money left in the country he did have that piece of property. The court allowed for the property to be put up for sale. 

Once it sold, the credit card company got the proceeds.

There was nothing Dan could do about it.

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2. Your Credit Score Will Be Damaged

Whether you stay in the United States or leave the country. If you have unpaid credit card bills, your credit score will suffer.

The good news is that your credit score doesn’t follow you to the new country. You will be able to build up a new score there.

The bad news is that if you come back to the United States, your credit score will still be there waiting for you and it will be bad.

It will take you years to rebuild it when you come back. 

3. Forgiven Debt Becomes Income

If your credit card companies decide to write off your debt, it will be seen by the IRS as income. 

This happened to a friend of mine. She had a $1,000 dollar credit card bill that she never paid. Eventually, the company wrote off the debt.

She then received a 1099-C for cancellation of debt.

The $1,000 dollars had become income in the eyes of the IRS, so she had to pay income tax on that amount.

If this happens to you, you want to be sure to pay any income tax owed.

If you don’t and you want to come back into the United States, you could have trouble such as having your passport revoked.

4. You May Not Be Able to Establish Residency

While you can build up a new credit score in a new country and your credit score doesn’t follow you, there is one area where it might be an issue.

If you are applying for residence in your new country, they may look at your credit score from the United States. 

If it appears that you are trying to get residency just to avoid past credit card debt, they might not approve your application.

That would be a real issue.

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5. Your Debt Will Be Sold to a Collector

Most credit card companies will, at some point, sell the past-due debt to a collection agency. This happens whether or not you are in the United States.

Collection agencies tend to be aggressive in collecting a debt.

They will call you.

They will email you.

And, yes, they will harass you.

Granted, if you are out of the country there isn’t much they can do but call and email.

However, if you come back, they will up their efforts to force you to pay the debt, and once back in the United States, they may even take you to court.

The good news is that if you are in a foreign country, they would have to sue you in a foreign court and unless you owe huge amounts of money, this is usually too expensive to make it worth the effort. 

Because of the expense, credit card companies and collection agencies typically don’t try to sue for past due payments in foreign courts.

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Related Questions:

Can a Creditor Collect After Issuing a 1099-C?

No, they can’t. Once they have issued a 1099-C the debt has been written off and can no longer be collected.

At that point, it is considered income and you will have to pay income tax on the write-off amount.

To Sum it All Up:

Leaving the country with unpaid credit card bills is possible, but there are some downsides to doing so. These include tanking your credit score, you can be sued, and even have your bank account levied.

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