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I Owe Debt in America But Live Overseas Now. How Can I File Bankruptcy in the US?

Question:

Dear Steve,

Due to the lockdowns starting in 2020, I fell behind on payments to credit cards with American Express and one other. I also traveled out of the country for what I thought would be a brief visit, but the world has been so unstable to travel, that the idea of traveling is frightening, and I do not have a work permit to work where I am, so the card companies are suing me. One already sued me in court in America, and the others threatened to do so.

I don’t have enough money to live on; now, I only have social security. I cannot declare bankruptcy without being in America.

What are the legal ramifications, and how to cope, please? I don’t have enough money to live on; now, I only have social security.

I cannot declare bankruptcy without being in America. I have no savings anywhere. I don’t own a home in America. I no longer own a car. I don’t have the money for an airline ticket to return.

What are the legal ramifications, and how to cope, please? Thank you for your help and your time.

Abigal

Answer:

Dear Abigal,

This is an interesting question. It has both a technical answer and a practicable one.

Technically speaking, you could file bankruptcy in America based on a few factors concerning the location of any assets you have left in America.

And while you should expect to have to return for one meeting with the bankruptcy trustee and creditors, there have been some exceptions to this requirement.

But the reality is you don’t have to do anything here and instead ignore your creditors.

Social Security income is protected from garnishment for debts except those owed to the US government.

You appear to indicate you have no other in the United States anymore and can’t afford to return to America.

I suggest you consider ceasing all communications with your creditors in the US and moving on with your life. Of course, you might be sued and lose, but so what?

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Your US credit score has nothing to do with any foreign credit report or score. It is very doubtful you would be chased for any debt when living in another country.

My advice is to put this all out of your mind, stop talking to your creditors, and if you ever do return to the United States to live, you can always file bankruptcy if you need to.

None of this will restrict your ability to come back to the US and visit. You will not be stopped at the border.

If you had a magic wand, you’d change things, but I bet you never saw the pandemic and the ramifications coming in 2020. Life happens, and it is messy at times.

Put this behind you and look forward to better days ahead.

Sincerely,


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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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