US Debt Collection

I had a US credit card that I was forced by crap circumstances to stop paying on in 2009. The last time I paid on it was May 2009. A family member in the US emailed me today that she had gotten a letter (addressed to me) from a collection agency saying that they had bought the debt and were trying to collect it. My circumstances still will not allow me to pay this debt. It was $2000 when I last paid on it, but since then the online management account was deactivated so I don't know anything more about it. The letter says that the debt is $4000. I do still have a US checking account open that I get money in from time to time from relatives for things like Christmas, so my questions are:
1) Is there any chance that they will pursue this debt internationally?
2) Is it likely they'll freeze/levy my US checking account?
3) Should I be freaked out about this?

I never intended to default on any of my debts, but the circumstances were completely out of my control (long story short, my abusive (estranged) husband ran the debts up and told me he was paying them when he wasn't, as he did all our bills). I'm a nervous wreck about this now and don't know what to do. I am a UK citizen and my husband is a US citizen if it matters. We lived together in the US for some time, so they have old addresses for us both there (I had a green card).

Why don't you contact the agency and ask if you can work out a payment plan?

I'd love to do that, if for nothing else than to rid myself of this enormous anxiety over it, but as it is, I'm struggling to keep food in the kitchen and am having to dip into my overdraft regularly just to stay afloat. It's a long and overdramatic story involving my husband's poor choices that have left me to deal with the fallout. As it stands, I couldn't afford to lose a pound for it, though.

I'd love to do that, if for nothing else than to rid myself of this enormous anxiety over it, but as it is, I'm struggling to keep food in the kitchen and am having to dip into my overdraft regularly just to stay afloat. It's a long and overdramatic story involving my husband's poor choices that have left me to deal with the fallout. As it stands, I couldn't afford to lose a pound for it, though.

Call them anyway. Do you have enough money in your US account to pay $5/mo on it? If so, tell them that's all you can afford, but you will pay that amount. Get them to agree to it in writing (assuming they don't offer anything better, like write off some/all of your debt). Then, as long as you pay that $5/mo, your account stays in "good standing" while you can improve your finances.

If you give them your contact info abroad, they can contact you here. Otherwise, I don't think they have any way of tracking you to the UK. However, if you just ignore the debt, your credit in the US will be trashed, so I'd try to avoid that if at all possible.

The US bank account remains empty about 362/365 days of the year. It literally only ever has money in it when a relative wants to give me money as a gift like for Christmas or birthday. I've no idea how I'd even put a quid in it. From what I've read on debt help web sites, paying on an old debt does nothing to help your credit and only resets the statute of limitations on your credit for it. I know I'm not going to be able to pay this unless I win the lottery. As far as I know, they don't have a UK address for me. My credit report shows when the debt was bought and the information (my name and last address in the US) the agency used to acquire it.

I'm practically shaking in anger and anxiety about this. I would never have racked up a debt like this. I have no intentions of ever living in the US again. I'm hoping to divorce my husband, so that would be the end of my ties to the US aside from a few family members that live there.

There are some excellent websites based in the USA about dealing with just this kind of debt. I found them very helpful when cleaning up some of my credit card issues before coming here. I can't remember any of them, unfortunately, however, they are ones that show you how to do it yourself. Lots of template letters, forums, etc. I'll try to find them for you.

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That said, are you getting all you are entitled benefit wise now that you are in the UK? CAB offers a benefits/income maximiser appointment that could be very helpful. Also have you tried local food banks? They should be able to offer you support and link you with local agencies that might be able to help you out.

From what I've read on debt help web sites, paying on an old debt does nothing to help your credit and only resets the statute of limitations on your credit for it. I know I'm not going to be able to pay this unless I win the lottery.

Debts do "lapse" over time, and yes, if they've lapsed and you start re-paying them, it will actually hurt your credit because then the debt is reactivated. I don't know how long it takes for the debt to lapse, though - you may want to look into the laws for the state to see what applies.

It looks like, for the state we lived in, there's a 7-year statute of limitations, so I guess that means after 7 years total have passed, it can be removed from your credit report? Honestly I'm not terribly bothered about the state of my credit in the USA because I have no intentions of ever going back and needing it, I'm just mainly worried about that US bank account. I have children with my husband who were born in the US so when he files taxes, he gets the child tax credit from the IRS and it goes into that account. So far, he's agreeable to letting me keep that money since I have the children, but if that bank account gets frozen or levied, the money will be gone to pay a debt that's not mine.

I have a benefits advisor through the council and she's helping me as best she can, but we're barely scraping by at the minute and I've had to get a crisis loan earlier this year as well. There's just no money at all I can put toward this debt.

After the statute of limitations for the state in which the debt was incurred expire, the debt no longer shows up on your credit report.  You may still get occasional collection calls/contacts every few years, attempting to collect the debt.  After that time, their recourse is extremely limited.  You can always check the laws in that state via the Attorney General's website. 

   

   

 

Does anyone know whether your bank lets you know if an account has been frozen or levied? Since I don't get mail here for any of that stuff, the only info I get from that bank is when I login to it on the website. If either of those was done to the account, would I be able to see that reflected on the online management of it?

Does anyone know whether your bank lets you know if an account has been frozen or levied? Since I don't get mail here for any of that stuff, the only info I get from that bank is when I login to it on the website. If either of those was done to the account, would I be able to see that reflected on the online management of it?

I ran a business with my ex husband many years ago.  When I left him and moved away, I neglected to remove my name from the bank account.  (foolish, I know) Fast forward to about 5 years later.  Living in a different state with a new partner and a joint bank account with him, I logged in to my account online one day.  I was horrified to see a zero balance.  Especially since I had just written checks to cover bills.  After calling the bank, I found that because of outstanding debt from the ex, they had taken the money from my joint account.  No warning, no letters, nothing.  Just a big fat zero balance one day.  That was a very costly mistake for me.  I will NEVER leave my name on any account that I am no longer associated with! It cost me a few thousand dollars to sort all of that mess.  : (

1) Possibly if they know where you are
2) Nah
3) Definitely not

Don't worry about it. Nothing they can really do if they don't know where you are. They would need to get a court judgement before they can levy your bank account. They need to personally serve you a summons. They can't do this if they don't know where you are. They wouldn't be able to collect even if they obtained the judgement, especially if the account is usually empty. Unless you own property in the US. I wouldn't give them my UK address if I were you. This may not be the popular thing to do but I also left some small debts behind. Times are tough and my UK bills are priority. Look after yourself.

They need to personally serve you a summons. They can't do this if they don't know where you are.

Maybe it's different in different states, but when they levied my bank account in California, I had no notice of it what so ever.  No letters, no summons, no court date.  Just the money missing one day.
Even later, when another of the ex husbands vendors tried to hold me responsible I found that they could and would simply serve you by mail.  If they know your last known address and feel that it is a legit address, all they have to do is mail you the paperwork.  Again, this may vary by state.

If you can't afford to pay in full, don't pay a penny.

The reason for this is that the statute of limitations in which they can sue you for the debt starts on the day you default (stop making payments) on the debt.  By resuming your payments, you reset the clock, and at any time they can then sue you for the remainder under the original contract regardless of any new agreement you might reach.  It's a really common dirty practice for collection agencies to say "sure, send us whatever you can afford" and then file suit the day after the check clears, since sending them money can be seen by the court as admitting that the debt is yours and valid.

Instead, if you've gotten away with it this long, and the original creditor has sold the debt off to a junk debt buyer, then you're probably okay.

Check out forums like creditboards.com or myfico.com for more information.

Once a delinquent debt is on your credit report, paying it won't help your credit score and in most cases will actually hurt it.  For a negative item, age is the primary factor, and once it's negative it will always be negative until it disappears completely seven years from the first delinquency.

They can indeed sue you and obtain a judgment without your knowledge, so it might be worth keeping an eye on the civil court websites of the counties you've lived in to see if your name pops up in their online case searches (most have that).

Otherwise, unless you want to actively take steps to clear the debt from your record (and/or you feel a moral obligation to pay it) you don't have to worry about just leaving it be and letting time heal the wounds.

(edited to add since the question will come up:  No, your US credit report does not follow you to the UK.  The credit systems are completely different.  Also, it's virtually unheard of for a collection agency to pursue you across international borders or sometimes even state lines for a debt as small as a $2000 credit card bill.  The cost would exceed the potential return.)