Living in another country with debt/bankruptcy in U.S. (funds, pay)

[phd27]

I am looking for some information/advice/experiences as I need to deal with my situation.

I was born and grew up in the U.S. and lived there until early last year when I immigrated to another country. I have quite a bit of credit card debt that I accumulated while living in the U.S. I always had fantastic credit, never missed a payment, rented apartments in four different states, and was a home owner for awhile. I was initially able to maintain payments after relocating to my new country of residence, but then my financial situation changed substantially late last year and I have not been able to pay my credit cards since.

Recently I tried to file for bankruptcy but was told by two attorneys that because I no longer have residency in the U.S. (Michigan) I cannot file there. I do not want to file bankruptcy where I am living now as it would not make the least bit of sense as I am just starting over with credit. I am aware that there is some type of cross-border/international bankruptcy, but I know very little about it. Anyone out there familiar with this?

Last week I found out that via a family member that I received a default judgment on one of my cards (all the mail pertaining to my debt is sent to my family's address in the states).

My concern is regarding what happens next. I know that sometimes a Motion for Summary Judgment is filed and the person it is filed against is served with a subpoena to appear in court. This is obviously an issue for me because I no longer live there. Also, I know that if I do not appear in court, a bench warrant can be issued, which concerns me. Would I be notified if a bench warrant were issued and how could I take care of it? I am going to be doing a bit of traveling in the states soon and would prefer to avoid any problems.

I would very much like to resolve this situation, ideally through bankruptcy, and would appreciate any information.

[suzie02]

I do not think that not showing up for court is going to cause a warrant to be issued. There is no debtor's prison. What would happen is that the creditors will get default judgments.

[desertsun41]

No the law can not issue warrants for your arrest on uncollected debts. You broke no laws. Only the crooked corrupt IRS can do that because they made it a law. The most they can do is get judgements and lien on your property....you own none so you are safe. They can get a judgement to garnish your wages. But since you have none you are safe again.

The following posts will all make you feel bad while talking about morals and all that hogwash. Dont listen to them. You are safe and sound from any actions against you while in Canada or any other country.

F the morals. Banks have no morals. They rape and pillage us peasants with no mercy. I'm telling you to have no mercy back. F them. Just keep praying with me that all the rest of them will fail and go to the same banking graveyard with those who already have failed.

Stay in your new country for 7 years and then you can return safe and sound with a clean bill of credit health. Oh I would also take a nice leisurely drive over the US border and mail a nice nasty letter to them. Other then winning the lottery I can not think of anything more pleasurable.

Good luck to ya man!

[berdee]

The only time a person may see a fine or jail time is not because of the debt itself, it would be if the judge required you to show up for an asset hearing and you fail to show. The judge then may issue a bench warrant, but the chances of that would be very slim and if probably nonexistent if you can prove why you cannot show up, ie, in another country, in a coma, in prison, etc.

Normally a creditor/collector will not go to another country to try to collect. Usually the only time something like that happens is when the debtor committed a federal offense when creating the debt, then it wouldn't be the creditor/collector going after the debtor it would be the feds. Making simple charges and trying to pay them before finally throwing in the towel and stop making payments is not a federal offense.

If you have any assets, or pay, in the US then the judgment creditor/collector may be able to seize or garnish those things. If you have none of those things in the US but you have them in your new country, then they cannot do a thing, seize/garnish, until they file with the courts, where you are now, to domesticate it to the new country. If that unlikely thing happens you can file for bankruptcy in the country you are living in now.

eta
If you have no assets in the US then there really isn't much they can do.
If you do have assets in the US then you should speak with a US attorney who has across-border legal experience. If you do have assets in the US you can file bankruptcy in the US under the U.S. bankruptcy code (11 U.S.C., §109)

[phd27]

Thank all of you so much for your quick and very helpful replies!

Berdee--I have a question about the bench warrant. If somehow I am called for an asset hearing (something that might be difficult as I would need to be served for that to happen) and I obviously can't make it, how would I prove that? Send a letter? Would I just explain that I am no longer a resident?

Also, how long after a default judgement is issued do creditors normally wait before trying to get an asset hearing?

[berdee]

Judgment creditors do not always have asset hearings. But if you are notified that there is one, then sending a letter explaining that you now live in another country and you are unable to attend, attending would be a hardship, etc., then that would probably work. The judge may request that you file a listing of your US assets to the court by mail. If you have no assets in the US then that would be in your answer.

Like I said, they don't always have asset hearings. Sometimes the judgment creditor/collector may try to trace* your US assets (and seize or garnish anything they can), they may send you a request (outside of the court) for you to voluntarily inform them of your US assets, they may request the court to have an asset hearing, or, they may do absolutely nothing about your assets.

If they do decide to do anything about your assets then there really isn't any certain time frame for when it may happen. It could happen immediately after the judgment, it could be years after the judgment or it may never happen.


*tracing assets is usually a very easy thing to do, even without going through an asset hearing. If you have property, bank accounts, pay checks, etc., in the US, no doubt they already know about all of it.

[McBain II]

As Berdee mentioned, it's very, very rare for debt collectors to pursue overseas. It usually costs more money than the debt is worth and the courts often lack standing to provide relief.

[debtvictim]

Berdee,

I just joined this forum this afternoon and wanted to thank you in advance for all the very useful info you provide.

I am in the same boat as PHD... with one small difference : I am still in the US but leaving soon for good. I have no intention to come back and live in here but I am doing my best to pay my $18,000 credit card debt .

I've tried with my only creditor and for no reason been denied for the Personal Finance Management program. There is no way I can pay the minimum which is around $433/month and the collection department is not willing to help me out.

My question is very similar to PHDs : " as I said mentiond earlier, I am leaving the country by the end of this year and I'll do my best to continue paying my debt. Just in case of failure to do so and the creditor or the collectors sue me, what are my options? is there anyway I ca notify the court that I am leaving the country? because I called them and they asked if there is any pending case, I said NO. And, like PHD said, what are the chances a BENCH WARRANT will be isued to arrest me? Eventually, I'll come back someday just to visit my country and I dont wanna get arrested at the airport.

Again, thank you so much Berdee and all the participants, I really appreciate the time and the effort to answer our questions.


All the best.

p.s : I live in VIRGINIA

[sondra_finchley]

Well- you MAY want to watch out depending on your status in your new country.

You didn't mention where you are or your status, but if you are on anything less than citizenship, but are aiming to get citizenship in the new country, then you may want to find out if a debt situation or defaulting on debt in the US would impact any decision in the future.

This issue comes up frequently on a board I am on for expats in Sweden and although I don't recall that anyone has been impacted directly, migration issues are not something you want to screw with. Best to be safe and check out that dimension of the issue before doing anything rash.

(We are also looking to leave the US in less than 2 years - so taking the time now to get my debt situation eliminated so we can leave and never look back)

[Mircea]

Originally Posted by phd27

I was born and grew up in the U.S. and lived there until early last year when I immigrated to another country. I have quite a bit of credit card debt that I accumulated while living in the U.S. I always had fantastic credit, never missed a payment, rented apartments in four different states, and was a home owner for awhile.

The only debt that will bar you from leaving the US is child support.

Originally Posted by phd27

Recently I tried to file for bankruptcy but was told by two attorneys that because I no longer have residency in the U.S. (Michigan) I cannot file there.

I applaud people who espouse good ethics, but there are times when honesty can harm you and that is one of them.

Originally Posted by phd27

I do not want to file bankruptcy where I am living now as it would not make the least bit of sense as I am just starting over with credit.

Not relevant. Bankruptcies are are public records and the fact of a bankruptcy will remain on your credit report for a period of 10 years from the date of discharge.

Other countries have access to Equifax, Trans Union etc just like you and other creditors based in the US do.

It comes down to how hard they want to look, so filing a bankruptcy here or there makes little difference.

Originally Posted by phd27

Last week I found out that via a family member that I received a default judgment on one of my cards (all the mail pertaining to my debt is sent to my family's address in the states).

Bad error in judgment. Next time look into post office boxes or private mail boxes. The fact that you have a home address inadvertently led the collectors to believe you have assets that they could attach. Big mistake on your part.

When Junk Debt Buyers purchase debts, the cherry-pick the most likely to be collected and then sell the rest to another Junk Debt Buyer who isn't so picky. The method of cherry-picking is either based on your reported income (um, no the Big 3 do not report income, but there are other credit bureaus like Lexis-Nexis that do report incomes. And the names and addresses and telephone and cell-phone numbers of your neighbors. And the names and addresses and telephone and cell-phone numbers of your co-workers. And the names and addresses and telephone and cell-phone numbers of your friends. And the names and addresses and telephone and cell-phone numbers of your former significant others. And the names of all your pets).

Originally Posted by phd27

My concern is regarding what happens next. I know that sometimes a Motion for Summary Judgment is filed and the person it is filed against is served with a subpoena to appear in court.

Not in your case. A complaint was filed, you were properly served, you failed to appear, a Motion for Default was filed and granted and the case is over.

Originally Posted by phd27

Also, I know that if I do not appear in court, a bench warrant can be issued, which concerns me.

You would be served a subpoena to appear at a "Debtor's Hearing" and instructed to bring with you information regarding assets such as your bank and bank account numbers, any real property you own, any tangible assets you own, any stocks, bearer bonds, non-bearer bonds, life insurance policies, pension plans and funds, including 401k Plans, and statement of your wages and earnings.

Originally Posted by phd27

Would I be notified if a bench warrant were issued and how could I take care of it?

A bench warrant would be issued after you failed to appear after being served a subpoena to appear at a Debtor's Hearing. What would be the point of notifying you of a bench warrant?

No one receives notice of a bench warrant, but you could probably go on-line to your country clerk of courts and see the status of the case, including whether or not a bench warrant had been issued.

I would do that before getting into a panic and barfing on my shoes.

Originally Posted by phd27

I am going to be doing a bit of traveling in the states soon and would prefer to avoid any problems.

Then if a bench warrant is issued I would advise you do the following prior each and every time you enter your vehicle:

1) Walk around the vehicle to ensure it is not damaged and that no head or tail-light lenses are damaged and that there are no objects obstructing the rear view mirror, rear window or side-mirrors. Correct any defects prior to operating the vehicle.

2) Ensure the headlights, tail-lights and all signal lights are operating and properly functioning and correct any defects prior to operating the vehicle.

3) Ensure that license plates for the rear and front (if required) are properly displayed and that they have the proper registration decals and that there are no obstructions of ANY kind (and that includes fancy license plate holders or covers) and correct any defects prior to operating.

4) Observe and obey all posted speed limits, traffic control devices and traffic control signs and use proper signals when executing maneuvers such as turns or exiting free ways or changing lanes.

A bench warrant will appear locally immediately. It will appear on RCIC within 90 days and then on NCIC and Triple I after 4-6 months.

Some of the best drug busts and DUI arrests I ever had were dumb idiots cruising around with no brake-lights or non-functioning turn signals.

In fact, for about a dozen of the 140+ DUI arrests I made I stopped the vehicle not because the driver was driving erratically or showed signs of alcohol intoxication, but because a headlight, tail-light, brake-light or turn signal light was out, at which point, surprise, surprise, surprise!

Think about it...a $3.50 tail light bulb or a $3,000 fine, plus court costs and attorney fees, loss of license and 30 days in lock up resulting in your employer terminating your employment (unless your employer is in love with you and thinks you're the greatest employee on earth.

Anyway no one actively looks for bench warrants. Police typically stumble upon them, but then in some jurisdictions like Cincinnasti, the [wannabe] police have Triple I and RCIC in their cars and they run the plates of every car they see on the road and they will know you if you have a warrant.

For a bench warrant for a traffic ticket, muni court or other civil court they'll usually recite you, and for misdemeanors it'll probably be ROR.

Originally Posted by phd27

I would very much like to resolve this situation, ideally through bankruptcy, and would appreciate any information.

Technically since you've maintained mail at a residence you are a resident at least under most state long-arm statutes, so next time you visit a bankruptcy attorney, keep your mouth shut and don't volunteer any information.

For a bankruptcy you only have to appear once, and that is at a hearing and only if some of your creditors contest the bankruptcy (and yes you can discharge judgments so long as the state is not a creditor so if it's a hospital bill and the hospital is owned in whole or in part by the city, county, a university or the state you can't discharge it) hearing and also don't forget to check your state's median income rules since that now determines whether you can file for a Chapter 7 or if you automatically get shoved into a Chapter 13 which will cost you a minimum of $100 per month for 60 months whether you like it or not or can "afford" it or not.