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). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also writes regularly for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Steward Radio and other programs. See her website SallyHerigstad.com for more personal finance tips and free budgeting worksheets. Ask Sally a question, or read her previous answers in the To Her Credit archive
Dear To Her Credit,
I have some credit card debts, a foreclosure, a car loan and a judgment for the unpaid maintenance of my last property. All this was filed after I left the country due to the lack of job. Currently I am living in China, studying, and I don't have a steady source of income.
Could the actual judgment follow me to Europe? Could they freeze my account here? Could I get into any trouble because of the debts or judgment? Thank you. -- Carolina
No, it's not likely that a judgment will follow you to China, Europe or anyplace else your travels may take you. For creditors in the U.S., it's usually not worth it to try to find average debtors and then work with the legal system of another country to collect what they owe.
If you had been wheeling and dealing with millions of dollars and you moved to another country, of course, that would be another story. Creditors can and do find collecting such large sums of money worth their while!
Because this judgment was filed before you left the country, any assets you left behind are probably within their reach. You've already lost your house to foreclosure. Don't be surprised if they take your car and any checking or other financial accounts you have back in the U.S. as well.
Creditors generally cannot take your retirement accounts, however. If you have a 401(k) plan, IRA or other retirement account, don't just leave it behind as a lost cause. If enough time goes by, there's no activity on the account and you don't respond to mail, you may forfeit the amount in the account to the state. Be sure to have any retirement assets transferred to the country you decide to settle in or make other arrangements.
Credit scores are not universal. Your history with the big three credit bureaus here won't follow you. That's good and bad news, as you will have to start over building a credit score in the country where you decide to settle. You can start over just as you did here, by taking out the easiest forms of credit first, such as department store credit card or a secured loan (one attached to an asset, such as a car loan). Don't carry a balance on credit cards -- that's not necessary. Just keep paying your bills on time and try to live a boring financial life, and your credit history in your new location should be fine.
When you finish your studies and get back on track in whatever career you choose, you can always send money to start paying back your judgment in the U.S. Like many people in these hard economic times, you just did what you had to do to survive. When times get better, you should pay back what you owe even if you might be able to get away without doing it, just because it's right.
I hope your financial troubles don't prevent you from returning if you ever decide you want to come back to the United States. Money problems can always be resolved. Relationships are the most important thing in life, and if you start missing home and loved ones, there is always a way to work things out.
Best of luck in your studies and with your exciting life abroad!
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