Happier Abroad Forum Community

I was wondering if any of you have (or have known anyone) who moved overseas, then defaulted on their native-land credit card balances?

I'll probably be moving to China within the next two months after selling everything, and yes...I do have some credit-card debt. My initial plan is to continue paying the minimum amount due each month for the first 4-6 months after moving. It's important for me to allow time to adjust to living and working in China, and to be 100-percent sure that I don't want to move back to the U.S.

But after I've lived and worked in China for several months and achieved that certainty, I'm weighing my options regarding what to do with that American credit-card balance.

I know this might be a bit of a controversial topic, but I'd like to get your opinions about it.

I also thought of something else: if a person defaults on their debts with any remaining balances, then they must pay taxes on it the following year as income, correct?

Yeah, if you're a scumbag you will take this route.

I'd say it's risky in case you ever get tapped out and need to go back home to re-establish a life. One of the first rules about moving abroad is to never burn bridges back home. A lot of sad expats end up hopelessly adrift because of making this bad move.

A much better compromise is to take a job somewhere in the middle east where they hand out credit/loans like party favors. Work for awhile and then bail with few loans. This is also morally questionable but at least you won't be burning bridges at home and with oil at $110+ a barrel I doubt any gulf arabs will be hurting from it.

Repatriate wrote:Yeah, if you're a scumbag you will take this route.

I'd say it's risky in case you ever get tapped out and need to go back home to re-establish a life. One of the first rules about moving abroad is to never burn bridges back home. A lot of sad expats end up hopelessly adrift because of making this bad move.

A much better compromise is to take a job somewhere in the middle east where they hand out credit/loans like party favors. Work for awhile and then bail with few loans. This is also morally questionable but at least you won't be burning bridges at home and with oil at $110+ a barrel I doubt any gulf arabs will be hurting from it.

Really? An American could take out a significant loan with an Arab bank then pay off debts from the states, then take off without any repercussions?

Sounds intriging...

You done this or know anyone who has done this and had no problems? I could probably get a teaching gig fairly easy in an Arab country if I wanted to but the prospect of living in one is a deterrent.

Winston you need to fix what ever bug is causing double posting, its annoying...

Mr S wrote:

Repatriate wrote:Yeah, if you're a scumbag you will take this route.

I'd say it's risky in case you ever get tapped out and need to go back home to re-establish a life. One of the first rules about moving abroad is to never burn bridges back home. A lot of sad expats end up hopelessly adrift because of making this bad move.

A much better compromise is to take a job somewhere in the middle east where they hand out credit/loans like party favors. Work for awhile and then bail with few loans. This is also morally questionable but at least you won't be burning bridges at home and with oil at $110+ a barrel I doubt any gulf arabs will be hurting from it.

Really? An American could take out a significant loan with an Arab bank then pay off debts from the states, then take off without any repercussions?

Sounds intriging...

You done this or know anyone who has done this and had no problems? I could probably get a teaching gig fairly easy in an Arab country if I wanted to but the prospect of living in one is a deterrent.

Yes, expats defaulting on loans from banks there is a common issue. They started scrutinizing airline employee loans for this reason because they kept taking off with piles of cash after their contract was finished Yes, I do know someone who did this in the gulf a few years back. He was working for an oil rig and his contract was non renewable so he decided to take an "extra" bonus and vacation time after his last paycheck.

Just so you know most big name banks are incorporated within the country they are in and considered a separate banking entity even if they are a large international bank. Which means they can't touch your credit score in your own country or take you to court. They sure as hell can ruin you within the gulf arab countries or whoever they have banking agreements with and they do throw people in jail with outstanding debts. So just be aware of the fact that if you do something like that you can never return to that country and/or work in countries that have a close relationship with that one.

DiscoPro_Joe wrote: I know this might be a bit of a controversial topic, but I'd like to get your opinions about it.

Ethics?

I see nothing wrong with this ethically. The credit card companies are completely immoral and deserve to be ripped off whenever possible.

Practically, it sounds reasonable if you are sure that you aren't coming back. Even if you do come back later, good credit is overrated. So if all you risk is losing your good credit status, that is fine. But I suspect the credit card companies will eventually pass laws to imprison debtors, so this is a risk if you come back later.

It is theft in my book and bad karma will follow you. Taking out a loan and not repaying it will also spoil things for other honest people who want to take out loans in those countries. And you will be making all Americans look bad - just like thieves.

keep in mind another thing- if the guy does not pay the debt, the bank will go after the employer. At least that is hwo it works in Oman. When you apply for a credit card there, your employer needs to vouch for you. They are not that stupid there.

Theft is theft. Nobody forced you to get a credit card, or made the decision to get in debt for you. You made those decisions yourself.

By defaulting on your credit card, you make everyone else pay for it through higher interest rate.

You might think the credit companies are dishonest for sending out tons of credit card offers and charging people high interest, but as consumers we have a choice, and there's a lot of credit card companies competing against each other. It's capitalism and you can go to bankrate.com and choose among many companies:

http://www.bankrate.com/brm/rate/cc_home.asp
https://creditcard.lowermybills.com/lmb ... ry/lowapr/

It's not like the government where you don't have a choice...

One good idea might be to set aside some funds in a new or separate checking account, and have the credit card's minimum payment deducted each month.

Another might be to sign up for one of the 'payment protection plans' that covers your account (the minimum payments, anyway) if/when you are unable to work. You give your current employer notice and then afterwards tell the credit card company you're out of work. You don't tell them you're going to China or wherever, but if you begin using the card there (or probably any card), you'll be traced there eventually.

Here's something I've just read that's a bit encouraging...
Why does everyone walk on eggshells to pay all their credit cards on time?
So they don't get a (GASP!) Bad Credit Rating.
But...what is the only PURPOSE of a Credit Rating?
To get more CREDIT!
So if your credit card is unsecured and you already have your big-ticket items (house/car), the worst a credit card can do to you is sue you and/or garnish your wages. Worse things have happened. They've got no collateral, though.

Best, KK

I wouldnt do it unless I already had citizenship in another nation. America may do what Germany did and recal any citizens overseas for military service.

1) Capitalism is built on credit/fractional banking. If all people started defaulting on loans, the system would grind to a halt.
2) Heard of the Golden Rule? How would you like to be a bank manager and a foreigner comes and applies for credit and then skips? Would you think he was doing a good thing?
3) The Arab bank will go after your employer and he will have to cough up that money. I can imagine the words he will be describing you with- deadbeat, son of a b++ch, thief, bad, bad person.

Are you not one?

4) You will be giving all Americans a bad name. Usually, being a US citizen means fulfilling financial obligations. Americans around the world are still known for being honest and responsible for the most part. Do you want to ruin that reputation?
5) It is bad karma- you did not work for that money; you ruined a written agreement that you had with the bank. That money has bad luck writtten all over it. Bad luck and bad karma for YOU!

Why not establish a normal banking relationship with that bank? Borrow money to buy something useful, such as a website that makes money or a small business in the Philippines for your GF. Then, honorably pay it off and borrow again. This is how all business operate for the most part.
Sure, there are cases when bankruptcies are declared, but these are not premeditated- just basically things go awry.

But what you plan on doing is a crime. And it will come and bite you in the a$$ one way or another, sooner or later.

ladislav wrote:But what you plan on doing is a crime. And it will come and bite you in the a$$ one way or another, sooner or later.

Uhh...Ladislav, take a look at my list of values on this thread. Focus on the top two on that list. The 2nd-highest is my integrity, while the highest is my physical and mental health.

In order for me to get started in my new life on the other side of the globe, I have to (out of necessity) "charge" some basic expenses at this point in time.

And to make a long story short, I still have my mental health, but I feel it running very, very thin after enduring 15 years of loneliness. If I don't find a fulfilling social life and love life soon, I could literally "lose it." I simply don't have time to find another career in Oklahoma City for another two or three years to try to save money, when I could barely make ends meet at my previous ultra-high-stress jobs to begin with. And not especially now with the next American Great Depression beginning.

If I lose my mental health, I might not be able to get it back. But if I renege on my integrity, then I could eventually rebuild it. This is why it's important to place integrity high on your list of values, but never above your health.

Nature does not look kindly upon those who place their integrity above their health. Guess what happens when a person loses his health? Self-destruction is the best word that comes to mind, whether it's physical, mental, or both.

Recently, whenever I've pondered the subject of crazy people who became serial killers, terrorists, school/post-office/cafeteria/church massacrers, or even those who simply committed suicide, I've wondered, "What if, just prior to losing their mental health, they had the guts to do what I'm doing? And what if, even if they didn't have the cash on hand, they could've obtained a credit card or two and used it as a one-way ticket to a more culturally and socially fulfilling life abroad? Wouldn't that have been a better result than the murders/terrorist acts/suicides they just committed in the U.S.?"

Anyway, Ladislav, in order to achieve good karma, it's important to clarify your values first, along with the short-term and long-term consequences of your actions. Not doing so can be fatal -- to oneself and others.

And by the way...late next spring, there's about a 2/3 chance I might have to lapse on the credit card payments for awhile. But that doesn't mean I would never repay it. Maybe I'll earn more money in my career. Maybe I'll start writing, composing, and performing pop music in China and "hit it big." Maybe the U.S. dollar will collapse.

There's plenty of opportunity to repair one's tarnished integrity. Just think, clarify your values, and follow your heart, and your world will work itself out just fine.

Oh well...I'm curious to get everyone's thoughts on this. If you want to hate me or condescend to me, that's OK. But at least take a look at your own life, too, while you're at it.