When faced with sudden stressful situations, people automatically get one of two reflexes — to fight or to flee. While these situations often come in the form of physical emergencies, they also happen when financial stress occurs. If debt gets too high, some people begin to wonder what exactly happens to debt if and when you decide to leave the country. If you decide to leave the country while you owe money in the United States — regardless of how much money that is — that outstanding balance becomes a delinquent debt that can chase you for years.
If You Move On, So Do Lawsuits
Not every country is the same, especially when it comes to creditworthiness. When you move to a new place, you are agreeing to abide by their rules and customs, which includes proving you’re a trustworthy financial investment for banks, loans, and credit. Even though you get to start your financial reputation over in a new country, the one you leave behind in the United States will stay the same, if not worsen.
Those who have accrued several thousands of dollars in debt and have not made efforts to settle or manage those debts will likely face legal challenges from lenders. Unfortunately, lawsuits do not get dropped just because someone moves out of the country. If a legal battle begins, the court looking at your case may or may not make you pay the debt back. There is a good chance, however, that they can liquify any assets you leave in the U.S., as well as garnish any income you earn from a U.S.-based company.
Your Passport May Get Revoked
Delinquent debt is not taken lightly in the United States. Even if you are able to avoid paying back your debts to lenders themselves, there is a good chance that they will write off the missing payments to the IRS, who would then mark those debts as income on your taxes. If you choose to avoid paying your taxes as well as your debt, the government can actually revoke your passport, potentially damaging your visa in another country and hindering you from being able to travel further in the future.
Usually, the U.S. government only takes such action when you are $50,000 or more in debt and have not made any efforts to create a payment plan or rectify the situation. The money you owe will be considered income and you will have to either enter a payment plan or pay back the taxed amount in full. Choosing not to file your taxes or even to file but then not pay back what you owe can lead to additional thousands of dollars in penalty fees and even jail time.
A Mess Awaits in the United States
Probably the worst of what happens to your debt when you leave the country is actually what accrues in your absence. If you did not provide your forwarding information to lenders, companies, or other financial institutions, there is a good chance that you have not received any notifications regarding your debt situation. Not knowing the reality of your financial situation may provide temporary relief, but, in the end, it can just cause significantly more stress and frustration and make matters even worse.
You may return to the U.S. to find that all your assets have been seized and liquidated, your bank and credit accounts are frozen, there are dozens of notices and warnings from debt collectors and the government, or even that there is a warrant for your arrest, depending on the situation.
Co-Signers Take the Fall
For many people, especially young adults, qualifying for a loan is nearly impossible. They simply do not make enough money, do not have enough assets, or do not have the credit history necessary to prove they deserve large financial compensation. That is where co-signers come in handy. Unfortunately, those who decide to flee the country to avoid paying loans or other debts that have co-signers listed are putting their co-signers at fault for their choices.
If the lender is unable to get ahold of you, they will go after the co-signer to resolve all delinquent debt. The co-signer will then be responsible for all the penalties and fees associated with the loan and can even take a hit on their own credit reports. If they are unable to repay the amount owed, they too can have all of their assets liquidated. Even worse, all of the missed payments, fees, lawsuits, and more will show up on the co-signers history, forcing many to file for bankruptcy and preventing them from getting any loans in the future.
Choose to Travel Wisely
Financial issues never truly go away, and a serious legal implication is what likely happens to your debt when you choose to leave the country instead of facing your financial struggles head-on. Debt can be a scary thing to deal with, but with the right game plan and helpful insight, it can be wrangled under control and you can easily avoid putting yourself and any of your co-signers at risk of bankruptcy or legal disaster.
https://www.libertydebtrelief.com/wp-content/uploads/2019/02/Leave-Country.jpg8001200libertydebthttps://www.libertydebtrelief.com/wp-content/uploads/2018/10/liberty-debt-relief-logo.pnglibertydebt2019-02-15 01:36:552019-06-18 09:20:17What Happens to My Delinquent Debt If I Leave the Country?