US Credit Card Debt

I am moving to the UK in a few days on a Spousal Visa.  I have two credit cards (One has a limit of about $1000 the other $750) here in the US and one unsecured loan for about $6,000.

I am going to do my best to continue to pay these off as the exchange rate will benefit greatly!!  But if I don't get a job right away I don't know how long I can maintain the loan payment, the cc's should not be a problem but that loan payment is around $250 a month! 

Does anybody know what will happen to me?  I know that my credit in the UK will be starting over there and I really don't have a plan on moving back to the US.  I am not as bothered about my US credit score but am nervous and am unaware if they can "come after me" in the UK.  Can they cross the pond to come and sue and or arrest me?     Like I said I am going to do my best and see no reason why I can not maintain at least the minimum but if this happens I wanted to know what can happen!

When I go back to visit family or take a vacation in the US will I get detained at the gate?  When my US passport expires in eight years will I get denied a refusal?  And when I go for my ILR/Citzenship in the UK will anything that these companies can do to me hurt my chances of being approved?

Thanks for any information you all can give!

I know you dont PLAN on moving back to the US but leaving those debts there they will only grow and grow and I absolutely do not think you should forget about them for one second.  You may have to go back someday.. things happen, situations change. Your husband and you might decide to try out living in the US for a bit... and leaving that debt your pretty much not even giving yourself the option to move back without a whole heap of trouble. When I left for the UK, I thought 'they wont hunt me down in the UK for credit card debt' but under parents advice, still ended up working 1 summer in the US before i left just to pay off my credit cards and came over with very little savings and am happy i did because DH and I decided we're moving over there in a few years... and it will be nice for ME to have good credit for us to be able to get a mortgage.

You should be able to call your loan provider and agree on a lower monthly rate than $250 per month on a $6,000 loan.... my minimum payment is less than that on my loan that is about 4 times as much.  Give them a call, see what they say. Best of luck. 

I know you dont PLAN on moving back to the US but leaving those debts there they will only grow and grow and I absolutely do not think you should forget about them for one second. 

Totally agree!

I'll bet a lot of people who moved back to the US from the UK never thought they would - me included. 

I have absolutely no experience with this issue at all, but I wonder if not taking care of US debt could affect the ability of a non-US citizen spouse to gain US residency or citizenship.

You cannot be arrested for not paying back debts but you CAN be asked to appear in court for your debts if the creditors sue you and if you dont appear in court a warrant will be issued for your arrest for not appearing in court... so TECHNICALLY your not being arrest for not paying your debts.. your being arrested for not appearing in court... but in the end you would have a warrant out for your arrest. Got that here.

http://wiki.answers.com/Q/Can_you_be_arrested_for_credit_card_debt

Best just pay your debts love!

Ooops, accidently modified this post rather than posting a new one under Carls.. if you want to see what the other one said he's quoted me on it but this is my new post

I wonder.... because Ive heard, certain debts let go and forgotten about for long enough can lead to a warrent being issued for your arrest... which can't be good for a sponsor for citizenship... 

While not paying off debts will result in a bad credit rating, and an inability to get any new lines of credit, you cannot be arrested or imprisoned for it.

Carl

I would not try and run away.  Depending on the type of debt and how much and just how badly someone decides they want you they can and will issue a warrant. Unpaid debt is often sold off to other companies that buy that debt and then make it their business to collect.  Sure you may be able to run, but do  you really want to be worried about ever coming back?  Or visiting?  The credit cards aren't high and really should take too long to pay back and the loan isn't that bad either considering the exchange rate. 

I won't go into details, but I do know what I am talking about. It's not pretty.

You cannot be arrested for not paying back debts but you CAN be asked to appear in court for your debts if the creditors sue you and if you dont appear in court a warrant will be issued for your arrest for not appearing in court... so TECHNICALLY your not being arrest for not paying your debts.. your being arrested for not appearing in court... but in the end you would have a warrant out for your arrest. Got that here.

http://wiki.answers.com/Q/Can_you_be_arrested_for_credit_card_debt

Best just pay your debts love!

Ooops, accidently modified this post rather than posting a new one under Carls.. if you want to see what the other one said he's quoted me on it but this is my new post

So if  you are in the UK and never get the summons you can indeed come back to your home for a visit and have a warrant waiting for you.  Not a nice thing to return to on holiday!

Actually, it's kind of sad to admit this but I know at least three people who went the "whole run away" route. Not me, but that's the kind of circles I move in.

Basically, debt stops at the water's edge. No one is going to come after you for a piddling little £4000. My acquaintances (a couple of actors and a semi-alcoholic journalist who fled here after rolling up a massive amount of debt with his wife) all owed a lot more than that. No one bothered them or called them at all hours of the day and night. After about a year, one of the actors told me that he contacted the collection agencies who were handling his defunct accounts and negotiated what he owed down to 20 cents on the dollar.

On the other hand, if you don't want to go the whole living on the edge route, paying off £125 to £150 a month doesn't sound like much. Sure, it might mean getting a part-time job on the weekend but there are worse things in life.

right, this is sort of my area of expertise, i worked for a consumer credit department of a bank for a loooong time arranging payment plans with customers, this was in the UK but I successfully used the same techniques with my boy's american debt. he's paying about $15 a month in total with frozen interest to 3 cards, although his balances were relatively low.

Firstly, I'm going to assume you don't want to use these cards anymore, I'm going to assume that as it sounds like you have more debt than you're comfortable with, and as a result it would be prudent not to get in any more.

Practical steps :

Be honest. Sit down and write out all your debts as they stand, put them in order from most to least money that you owe, don't consider that your credit cards may be more "urgent" (i.e they shout at you more than your loan people)

Budget. Work out all of our outgoings (rent, bills,clothes, dating) and how much money you have in savings, earnings, partners contributions tec...Realistically, how much can you afford to your debts in total?

Split. Now take the figure you can afford and split it between your creditors based on how much you owe them (i.e the more you owe the more you get)

You should now have the basic facts you need to approach your creditors.

Right, now you need to contact all of your creditors and state that you're about to have a "change in circumstance" and as a result are on reduced income for a limited period.

Ask if the credit card/loan company has a department that can help in your situation, if you're lucky you'll be put through to a (slightly) more sympathetic agent than delinquent billing who will know how to deal with your situation.

If not, explain that you're going to be on a reduced income for a number of months - that it is a temporary situation and you hope to regain your earnings in the next few months.
Firstly request a payment holiday. You will probably get away with this on your loan but credit cards will be more difficult. If they wont dice with a payment holiday, drop and ask for a reduced payment plan, or refinance. They may put you on a six month payment plan as a trial before refinancing your loan (normally at a lower/zero interest rate). DON'T confuse this with a consolidation loan, they are normally VERY BAD, VERY VERY VERY BAD.  

Be VERY careful if they offer you, new loans, refinances etc. Ask for paperwork and study the APR very carefully, many credit card companies genuinely want to help, others can be rather shady. It's up to you to make sure you don't get done over.

Be persistent, ask to speak to supervisors, stress that it's temporary, creditors prefer that they get some money from you, rather than nothing.

A credit card will probably take an offer of payment of over 5% of the total balance a month but may go as low as 1%, anything less than 5% will probably come with an interest freeze.

good luck!!!

I dont' really think the OP has suggested they might dodge the debt. I think they are just worried about a lapse in employment that could affect their ability to pay.

All the above is correct. But given the small amount you owe, I don't think you need to worry. It seems your loan is your biggest concern. As suggested, you may be able to renegotiate the payments or get a payment holiday. Even if you can't, I *think* you have to go at least 6 months into arrears before you are even considered for default. So hopefully you'd be employed by then!

I *think* you have to go at least 6 months into arrears before you are even considered for default. So hopefully you'd be employed by then!

Just to say The 6 month thing may be true of a credit card depending on which company but an unsecured personal loan is considered in default from the first month you default on it, people regularly miss a credit card payment, CC companies love it, more money from them, but a loan default is more serious, in the UK it triggers a DFN which is logged on your credit rating

I know that my credit in the UK will be starting over there...

Yes.

I am not as bothered about my US credit score but am nervous and am unaware if they can "come after me" in the UK.  Can they cross the pond to come and sue and or arrest me?     

No, they aren't going to come looking for you and arrest you.  If you can't pay them, you'll end up with bad credit in the US.  You could end up with court judgements on your US credit record as well if they take it to court, but I do believe they have to be able to find you first (to serve you with the court summons) before it could get to that stage.

There is a slight possibility (not likely) that if the creditor knows you are over here, they could at some point sell the debt on to a collection agency over here.  Then the collection agency over here could start pursuing you for payment here - but not sure really about the enforceability of a US debt here under UK jurisdiction.  Have seen creditors here chasing people with UK debt into the US by selling the debt on to collection agencies over there - but only the extremely odd instance of this & so therefore not sure how successful it is for the creditors.

When I go back to visit family or take a vacation in the US will I get detained at the gate?  When my US passport expires in eight years will I get denied a refusal? 

No.  You think the US will ever let you go?!!  Lol!  (However, bear in mind that US federal student loan debt never goes away because you owe the government.  They will try to assess payment for it, failing other payments, from things like tax refunds or possibly even government benefits.)

And when I go for my ILR/Citzenship in the UK will anything that these companies can do to me hurt my chances of being approved? 

From my first-hand experience of the process, there wasn't a credit check involved. 

If you want more specialised advice about how to deal with problematic US debt, why not contact this organisation while you are still there:

http://www.nfcc.org/

So if  you are in the UK and never get the summons you can indeed come back to your home for a visit and have a warrant waiting for you.  Not a nice thing to return to on holiday!

Again, I think they have to first find you to serve you a court summons when the creditor wants to take you to court.  But even if somehow the creditor could prove they served you with a summons, and you didn't turn up in court, the judge renders a default notice in the creditor's favor.  A warrant is not issued for your arrest because you didn't turn up in court.  If the creditor can't even find you to serve the summons, it's kind of silly and pointless for them to waste the money trying to pursue it in court anyway.  If they can't find you to serve the summons, how are they going to find you to enforce the debt (obtain payment via garnishing your wages, etc)? 

(Being unable to repay personal consumer credit debt is not a crime - not in the US and not in the UK!)

Thank you all SO much for all of the great advise/info!  Hopefully it wont come to any of this but good to know all situations...

From my first-hand experience of the process, there wasn't a credit check involved. 

Mrs Robinson:  I think my main concern was if they do try to 'sue' me in court and I never get the summons, etc... will that go on my criminal record?  Seeing as how a credit check is not done that is good but I don't want to apply and something be found on a criminal check! I was told it is best to tell everything up front with it comes to immigration but if I default on payments and I never know there is any kind of warrant or anything for me I don't want this to come back to haunt me in two years when I go for my ILR and then from there citizenship.   

I think my main concern was if they do try to 'sue' me in court and I never get the summons, etc... will that go on my criminal record? 

No.  Debt is not a criminal offense.  It's a matter for the civil courts. 

If they get a court judgement against you in default (because you didn't show up to court), it will go on your US credit report.

Please do consider looking into that link I provided (it's a US non-profit debt advice company) to get some advice while you are still there on how best to approach/deal with the debt going forward.