Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006).
Dear To Her Credit,
In late December of this year, I am looking to move to the United Kingdom, where my soon-to-be husband is. We were looking to have him move over here, but after my recent visit to the U.K. and seeing his condition, I think it will be a lot easier on us both financially if I move over there a couple of months after the wedding.
The problem I am having is my large amount of credit card debt and my college loan. The college loan is on deferment because I am out of a job and have been for some time. (My fiance is sending money over so we can pay contracts and vendors for the wedding. It's easier to get married over here where my family and friends live.)
When I am ready to move over, how will my debts affect the process? Will they keep me from being able to move in December? I am not running away from my debts, and I am willing to pay them all back. But at this point, with all the interest and late fees from me not being able to pay, the balances are so high there's no way I can pay them off before I leave.
Should I consolidate it into one bill? Can I set something up for me to pay it while I'm living in the U.K.? Any help would be appreciated, because I'm not trying to do anything illegal here, I just want to be able to live with my husband! Thanks! -- Ashley
Dear Ashley, Moving to the United Kingdom to start a new life with your husband is very exciting. Fortunately, your credit card debts here in the United States should not stop you from following your dreams.
Kian Mottahedeh, lawyer with the Price Law Group in Encino, Calif., says, "The majority of foreign countries do not run your credit from your previous country of residence." Mottahedah points out that if you owed child or spousal support, you might run into more problems. The state has a vested interest in seeing that those obligations are met. He points out that, "Certain debts are not dischargeable in a bankruptcy. For example, the woman who is moving to England can just file for bankruptcy protection here in the States, wipe her slate clean and then move on to her new life without ever having to worry about anything. She would not be able to wipe away her child or spousal support obligations."
Mark Brodi, president of debt consolidation company Resolve Financial Inc., says, "There is nothing that should stop her" from moving.
It's important, however, to be careful when one spouse has a better credit record than the other. "They should just not co-mingle funds upon their first arrival in England," says Brodi. "She should ask around and even visit a bank and speak to an adviser."
Brodi sees another advantage to living in England. "She will be paid in British pounds or euros, which carry a more favorable exchange rate than the dollar." You can set up automatic monthly withdrawals from an English bank, and when the conversion is made to dollars you'll be at an advantage.
I know you intend to pay off the debts, but be sure to follow through after you get to the United Kingdom, and the debts seem far, far away. If you ever come back to the states and have long-neglected debts that have gone to collections and even summary judgments, you may have difficulty getting an apartment, credit or even a job.
Consolidating your debts may simplify your payments, but beware of high fees and fine print. You may have trouble getting a debt consolidation loan if the lender knows you are about to leave the country. In most cases, you'd do just as well working to pay your debts off as quickly as you can -- transferring debts to lower interest rate accounts when possible -- as you would be getting a new loan.
Sally Herigstad writes about women and credit every week for CreditCards.com. Herigstad is a writer and finance consultant for MSN Money, a personal finance software product. She is also a member of the Washington Society of Certified Public Accountants and the American Institute of Certified Public Accountants. Her Web site is http://helpicantpaymybills.net. Sally Herigstad lives in Kent, Wash., with her husband Gary. They have two grown children, Valia and Grant.
To Her Credit answers a question about a debt or credit issue from a CreditCards.com reader each week.
Send your question to Sally.
Published: September 18, 2009
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