Overwhelmed with debt? Whether it’s unpaid credit card debt or medical bills, you might feel like you have nowhere to turn. In fact, you might be so desperate that you’re considering extreme tactics—like moving out of the country. If you’re seriously considering uprooting your life just to avoid debt, you probably have a few questions. How do you start over in a completely new place? And can debt collectors actually follow you to another country?
It might be tempting to leave all your debts behind. But it isn’t that easy—and it isn’t always practical. We’ll walk you through the process, as well as some alternatives, so you can make the right choices for tackling your debt.
Can Debt Collectors Follow You to Another Country?
If you owe money and don’t pay it, a creditor typically has to get a judgment to be able to force the collection. Judgments must be filed in the state where you reside. If you move before that process begins, creditors might not attempt to locate you and file in the correct jurisdiction.
Leaving the country would make it harder for creditors. They could just decide that it’s too expensive to try to collect the debt while you live outside of the country.
However, if a judgment is already filed, it can diminish your ability to move until you resolve the debt. A judgment can allow a creditor to file a lien against your property or garnish your accounts, for example. While they can’t keep you from leaving the state or country, the creditors can keep you from taking some of your assets with you.
Even if you do manage to leave the country, you might want to return one day. If you ever return to the United States, the financial issues you ignored before can still haunt you. Plus, if you have poor credit, you probably won’t qualify for an international credit card before you move abroad.
What Happens if I Move to Another Country?
So if you have a lot of debt, can you solve your problems by moving to another country? Probably not. Here are some examples of what might happen if you move abroad and ignore the debt that you owe:
- If you move abroad, you’ll still be responsible for your student loan debt. You could face severe consequences if you choose not to continue making payments on your loans. According to S. News, interest charges can pile up, and your wages may be garnished.
- If you have unpaid tax bills, you’ll want to continue paying them—even if you move out of the country. Ignoring your debt could lead to your passport being revoked. This would make it impossible to continue traveling. If you were to move back home and the IRS garnished your wages, it’d be challenging to get financing or save the necessary funds needed to pay for your daily expenses.
Why Won’t This Strategy Work?
It sounds like an easy fix, doesn’t? To avoid a collection agency, and your debt, simply move out of the country. But you could run into a few problems. Most people don’t have the means to start over completely in a different country. Here are some roadblocks that you might encounter:
You’ll Likely Need Cash
You can’t just pack up your bags and move anywhere you want. Often, becoming a legal resident takes a lot of steps, paperwork and money.
Many countries require that you have either a significant amount of income or enough cash to buy property or investments to legally establish residency. If you have a debt issue, you might not have enough cash saved up.
It Can Be a Challenge to Establish Credit in a New Country
Your FICO score is not something that goes with you when you’re in other countries. It’s unique to the United States. According to Business Insider, many countries have their own version of a credit score with their own grading systems.
Even if you were to move to another country to get a fresh start, you’d still need to work hard to pay all of your bills and establish credit to handle your financial needs. It can also be challenging to get a credit card or mortgage in another country. You might have to save up a lot of cash instead of taking out a loan or using credit cards for big purchases.
What Exactly Happens Your Debt When You Move to Another Country?
If you ignore your debt and try to live a new life in another country, it might only create more issues for you. While you might not face the consequences right away, you could get hit with additional fines and interest when you come back home.
Coming back to piles of unpaid debt can cause more issues that dealing with the debt upfront. Instead of running away to escape your debt, develop a repayment strategy.
Here’s What to Do Instead
- Take time to outline all of your debt. Make a list of all debt totals so you have a clear picture of what debt needs to be paid off. It’ll help you stay organized, and you can create a plan of attack.
- Continue paying your bills. Ignoring your bills won’t help, and late fees and interest will continue to add up. Instead, continue to pay as much of your bills as you can.
- Make a budget. No clue how to tackle your debt? Start with a budget. That way, you can use your income in the most productive way possible. Focus on must-pay bills and expenses first.
- Come up with a long-term repayment strategy. You might feel overwhelmed by all the debt you owe. Ease some of your stress by creating a long-term plan that works best for your situation. For example, you might consider consolidating your debt.
Don’t Run Away from Your Debt—Make a Plan
Running away from your debt might be awfully tempting. But tackle your debt is probably better in the long-term. If you struggle with debt, and find that it’s negatively impacting your credit, consider signing up for ExtraCredit. This solution helps you monitor and manage your credit, and it also offers exclusive discounts on credit repair services with one of the leaders in credit repair.