I have seen an increase in reader questions and phone consults about stopping paying debts when leaving the US, or after having already left, and not being able to keep up on minimum payments.
You may be in the United States on a work visa that expired, or lost your job due to COVID, and have to leave temporarily, or perhaps permanently.
You may be a US citizen living and working abroad who is not sure if, or when you will return to the US, while struggling to keep current on past debts originating here.
The common question is whether you can stop paying your bills in order to settle for less, and whether your creditors and debt collectors are going to chase payments down when you no longer live here.
Debt Collectors Do Not Chase You Over the Border
Your debts remain collectable in the US after you leave, but banks, lenders, debt buyers and collection law firms are not looking to chase you down in a foreign country.
In over 20 years of helping people resolve problem debt, and many a file with someone living abroad, or having left the US to return to their home country, I simply do not see extra efforts to collect from people in another country.
If you have non US based debts, I cannot speak to that. But if your credit card or personal loan originated here in the US, looking over your shoulder for legal collection efforts, while in another country, or on another continent, is just not happening.
This can mean several things for you. How you may view your options for solving these debts could depend on whether you intend to return to the US or not. Check out this video about living outside the US with debts that originated here:
You Cannot Pay
If you are unable to pay, you don’t. If you think you will not return to the US again, you may think about never paying again. Why?
- You do not need decent US based credit reports to accomplish life goals.
- The threat of legal collections disrupting your life is slim to none.
There are attorney resources that can assist you in determining your exposure to collections, and options to deal with the debts.
If you are not certain when, or if, you will return to the US, you can hold off payments while they are unaffordable, and circle back to debt solutions when you have the resources and/or know you will return to America.
Some reasons to try to take care of past collections before you get back to the US would be:
- Need to clean up your credit to get a car loan, apartment, turn on utilities, after your return.
- Eliminate the risk of being sued upon coming back to America.
If you get back to the states, and even start off living with a family member, but apply for something as simple as a cell phone contract, the credit pull will put you back on the map of certain creditors and collectors, and even offer them your new address!
Your US Based Debt Does Not Live Forever
Unpaid debt has a shelf life to be able to sue and stay on your credit. If you pass those timelines (more than 7 years for nearly all of us), you can get back to the US and get a fresh start, and with your credit no longer showing those past unpaid bills.
Be sure to check that accounts you stopped paying 7 or more years ago have fallen off your credit.
If you need help dealing with creditors and getting favorable outcomes, you are often in better shape to improve your savings from settling, and in less of a rush to lock in deals, when you are not in the US.
If you have questions or concerns about leaving America, or living abroad with US based debts, post in the comments below for feedback.