Escaping US Credit card debt by moving abroad

[jcnyc]

So had a discussion about this topic with some co-workers the other day and wanted to get everyone's views on it. Essentially, we discussed if someone had a large amount of credit card debt (north of $100k) and moved abroad to escape it and never pay it again, what can collection agencies actually do?

Before anyone starts getting emotional about it, let me lay out the assumptions:

- No desire to come back to the USA (at least for 7 years)
- Let's ignore the moral standards piece. Maybe the person just wants to spend the money, or it's someone that has had huge medical bills and lost a job. I'm just focusing on what could happen to them if they darted for another country.

Can the collection agencies come after you if you move abroad to say SE Asia, Europe, or even Canada? My answer is no because it's usually not worth it for them. Perhaps if the debt is high enough they might try to do something but having debt is not a crime.

We weren't so sure about whether they could come after your US assets. I think bank accounts are fair game if they can obtain court orders, but what about brokerage accounts, and retirement accounts?

 

[Danmar]

Well the "zero moral standards" prevents me from responding in a thoughtful way.

 

[RunningBum]

Well the "zero moral standards" prevents me from responding in a thoughtful way.

Exactly. I have no advice at all to assist someone in doing this. Anyone who does this is costing the rest of us money.

 

[jcnyc]

Exactly. I have no advice at all to assist someone in doing this. Anyone who does this is costing the rest of us money.

I don't think they're costing you any money. Banks just write off the loss and sell it for pennies to collection agencies. I don't said no moral standards because I wanted actual opinions of what might happen, and did not want your standard "don't do this, it's morally unjust" responses because that's kind of an assumed thing.

 

[Big_Hitter]

Well the "zero moral standards" prevents me from responding in a thoughtful way.

+1

 

[razztazz]

Nearly all of the law exists to protect business interests. That's your overarching answer

Can they come after you vs would they because it's not worth it to them are two different concepts.

 

[Another Reader]

IIRC, it is illegal to welch on debt in many countries and you can be arrested and thrown in jail for not paying. This approach may extend to expats living in those countries.

 

[2017ish]

Depends what country the debtor departs to--and how much money is involved. 100K wouldn't be enough to bother with in most cases, but....

Google "enforcement of us judgments abroad." Murky, politicized, "it all depends" area.

A good bite-sized introduction pops up as the first google result--from the Proskauer firm: Enforcing U.S. Judgments Abroad - Proskauer on International Litigation and Arbitration

E.T.A.--any non-retirement US assets are going to be fair game if a judgment has been obtained. (Retirement assets are hard to grab--but someone of this ilk may have engaged in self-dealing to allow piercing of those protections.) My answer was thinking about Non-US assets.

 

[Fermion]

A better phrase would have been "ignoring moral standards" if you wanted to explore the idea without discussion of that.

I can see a situation where someone with a huge medical problem and loss of job might get into a heavy debt situation. Are you really going to argue morals with someone whose spouse has spent two years living in a hotel and hospice while tending to them during hospitalization?

 

[mpeirce]

I don't think they're costing you any money.

We all pay for theft.

It's not like it comes out of the paycheck of someone at BankCo, it gets spread around as increased costs for everyone.

 

[Big_Hitter]

IIRC, it is illegal to steal and you can be arrested and thrown in jail. This approach may extend to expats living in those countries.

fify

 

[GalaxyBoy]

Outright thievery, no sugar-coating it. I'm not giving advice on how to rob a bank, either.

 

[Another Reader]

fify

I'm pretty sure it's illegal to steal everywhere. Whether a country's laws classify non-payment of debt as stealing is beyond my knowledge. In the US, no one goes to prison for not paying their debts.

 

[orangehairfella]

This was actually extremely common after the dot-com bubble burst.

During the bubble technology companies brought in huge numbers of H1B visaed workers from South Asia. Despite being paid less than their American counterparts, they were still paid very well while they were here. They bought homes and cars and they established credit. Credit they used to obtain lots of credit cards.

At the time the H1B program wasn't very flexible, and workers were essentially completely beholden to their employer; if they were laid off they really had no other option but to return to their home country, and many did. But not before maxing out every one of those credit cards. The usual purchase was jewelry that could easily be converted back to cash when they arrived home. Maxing out $100k of cards in the days before the flight home wasn't uncommon.

 

[MichaelB]

This is not an appropriate discussion topic for the E-R Forum community