Yahoo Finance Will Your Debt Follow You If You Move Abroad Without Paying It Off?
If you find yourself struggling with debt, it can be a suffocating feeling. It can cause you to search for ways to escape the debt and start over. You may even be thinking about leaving the country altogether. But is moving abroad a viable way to avoid paying off your debt? Keep reading as we explore this option.
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Can You Avoid Debt By Moving Abroad?
If you choose to move to a different country while you have debt in the U.S., nothing can stop you. However, you’ll still be obligated to pay your debt no matter where you live. Your contract with the credit card companies and other creditors states that you must pay no matter the circumstances.
What Can Happen If You Move Overseas and Fail To Pay Your Debt
If you make the decision to move overseas and you don’t continue making your debt payments, there are some repercussions that you’ll face.
Your credit score will suffer: If you stop making debt payments, your credit score will take a significant hit. This is because 35% of your score comprises your payment history. Late payments can significantly impact your credit score and will stick with you for seven years.
Late fees and interest will get expensive: If you fail to pay your debt obligations, creditors will charge you a late fee. Additionally, finance charges will continue to accrue if your balance is not paid in full.
Creditors can sue and garnish your U.S. Wages: If you ignore your debt, your creditors could file a lawsuit to recoup the unpaid debt. Additionally, they can garnish your wages if you’re still working for a U.S.-based company.
How to Pay Off Your Debt if You Move Abroad
Instead of ignoring your debt, the financially smart move would be to devise a repayment plan. You could consolidate your debt with a balance transfer credit card if you have a significant amount of high-interest debt or debt from multiple creditors. These will give you up to 21 months with a 0% interest rate. You can pay off as much of your debt as possible during that time without accruing additional finance charges.
If you don’t want another credit card, you can come up with a debt payoff plan. Most people will use the debt snowball or avalanche method to pay down their debt as quickly as possible.
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This article originally appeared on GOBankingRates.com: Will Your Debt Follow You If You Move Abroad Without Paying It Off?
