Here’s What Happens When You Rack Up Debt and Leave the Country

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Debt doesn’t go away if you leave the country. Find out what would happen if you took on a large amount of debt, moved away, and stopped paying it back. 

Once you have a decent credit score, it’s easy to borrow money. There are plenty of credit card companies that give out high credit limits and lenders offering personal loans. It’s not uncommon to be able to borrow $50,000 or more, without putting up any collateral.

If you’re able to get access to that kind of money, what if you decided to rack up debt and leave the country? It sounds a little like something out of a movie. One score, and then you disappear to a beach somewhere, drinking mai tais and living as an outlaw. A white-collar outlaw, but still an outlaw.

You’re still legally responsible for debt whether you’re in the United States or not. You can also continue making payments on it, and if you do, you won’t have any issues. If you abandon your debt, it won’t follow you to a new country, but it can lead to other issues.

It will ruin your credit score

Not making debt payments does serious damage to your credit score. Creditors report when your account is delinquent and when they’ve sent it to collections.

You might be thinking “who cares about my credit score? I don’t live there anymore.” That’s true, unless you need to move back.

Let’s say you can’t find work in your new home, which is a common challenge for expats. If you move back to the United States, then your low credit score will be an issue. For example, when you look for housing, bad credit will make it very hard to get approved to rent a place to live.

Your creditors could sue you and garnish U.S.-based assets and wages

Creditors can and will take you to court for unpaid debt. Even if you’re not around, the court can enter a summary judgment against you. The creditor or collection agency may then be able to garnish U.S.-based assets, including:

Bank accountsBrokerage accountsWages paid by U.S.-based employers

So, if you were planning to ditch your debt and continue to work at a U.S.-based remote job, you could end up having your wages garnished. And if you have a brokerage account, a savings account, or anything else with money in it, your creditors can probably go after it (there are some types of retirement accounts that are protected from creditors).

You’d essentially need to make a clean break from your home country. That means finding a job wherever you move, which also means getting a work visa there. And you’ll need to set up new financial accounts.

Nobody’s going to come looking for you

In all likelihood, the consequences of not paying your debt will only apply in the country where you incurred that debt. INTERPOL’s not coming after you because you didn’t pay off your credit cards.

You could “get away with it,” in a sense. There are limits to what creditors will do to recover their money. They may file a lawsuit against you and try to get whatever they can out of your assets in the United States. But they’re not going to chase you abroad.

Not a good financial move

I won’t bore you with how paying back your debt is the right thing to do. Let’s look at this idea entirely from a personal finance perspective.

You could theoretically rack up debt, leave the country, and avoid paying it back. But how much could you get this way? It would need to be unsecured debt, such as credit cards and personal loans. For the typical consumer with good credit, it might be possible to get $50,000 to $100,000, and that’s probably being generous. No small sum, but it’s not the type of money that leaves you set for life.

In exchange, you need to start a whole new life in another country. Your unpaid debt will be a problem if you come back. And you won’t be able to use U.S. accounts, because then creditors could garnish your assets.

As someone who lives outside the country, I’ll let you in on something not all Americans realize — U.S. financial products are excellent, especially when compared to those from most other countries. Here are a few examples of why I’d never want to give up access to the U.S. financial system:

The rewards credit cards are much better than what’s available in most countries. They offer much bigger bonuses and higher rewards rates.High-yield savings accounts earn better interest rates than you can get elsewhere.There are also generous bank account bonuses you can earn for opening a new account and completing bonus requirements.Stock brokers give you access to all kinds of investment options. And the U.S. stock market has historically made an average annual return of about 10% before inflation, something not every country can say about its market.

Giving that up for some supposedly easy money would be a textbook example of killing the golden goose. If you learn how to make the most of rewards cards, bank accounts, and investing through brokerage accounts, that can pay off far more than a shortsighted attempt to game the system.

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