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Bankruptcy or Just don't pay

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iridius

Junior Member
What is the name of your state? New Jersey

Hello.
I have a bit of a complicated situation. I live abroad, and I will continue to live abroad (though I occassionally come back to the US every year or two) I have the following debts:

$25,229 Direct Consolitdation Student Loan
$23,967 in Credit Card debt (on 7 cards)
$12,380 debt on a time share = a loan

I know that nothing will happen either way with the Direct Loan, but I am considering either claiming bankruptcy or simply not paying the Credit Card and time Share debt.
My problem is, I am overseas. So, I don't think there is any way for me to claim bankruptcy is there?
Second, if I simply don't pay them, and don't respond to the companies, and they (or the collection agency after them) takes me to court, I can't get there obviously being overseas, and then I'm a fugitive... What would happen then, would there be something like an arrest warrant out for my arrest, until something happened or what?

I have no property, except for a beaten up old sailboat that's stored in the middle of nowhere, back home. They can have that, it costs more to store than anything.

I am looking at this as a business decision, I mean, realistically, I could go back to America and work hard and be unhappy and pay it off, but I am simply interested in weighing the consequences and rewards for this.

I basically would take any money I have left and pay off my student loans (uncle sam wants his money) but I don't know if there's more to it that I dont' know.

I dont' plan on buying anything that requires credit soon (in next 5-10 years) I am sure that I could get a head start on repairing the credit via secured loans and credit cards, and the social stigma is not a concern, although they might call my folks a bit too much.

thanks in advance.
 


Fred_BK

Junior Member
I am in the same situation

I am in the same situation (https://forum.freeadvice.com/showthread.php?t=215227) except I could file BK anytime I want.

Since you are like me (caring about business), I suggest that you try your best to restore a good credit rating in the USA. There is NO such thing as arrest for CC debs or ignoring them. The credit card companies are not private companies. Are the college loans from the federal government? If so, then think about them first. Bankruptcy will not remove your college loans.

The worst thing that could happen is having a judgment against you. But if you live far away and no credit card company knows about your address, then it's hard to properly serve you the notice from the court because you could always say you never receive the notice.

The solution I suggest is as follows:
1) Take a photo of your property the worthless boat or just ignore mentioning it since it's worth NOTHING.
2) Ignore all your credit card debs
3) Return to NJ and live there for a couple of months to become eligible to file for Bankruptcy (BK)
3) Choose chapter 7 and BOOM --> ALL your debts are gone that quickly!!!

But you have to be willing to live 7 years with bad credit or a little credit. In other words, if you apply for a credit card during the 7 years you will be approved for only $3000 or less.

If there are big complications in your case (like you physically receiving a court order and ignoring it), hire a lawyer. They maximum amount of money a lawyer will charge you is a couple of thousands of dollars. If your case if basic and you can’t afford a lawyer, then download the forms from the Internet and fill them up. You could also go to an office that fills everything for you for $600 if you provide all your bills.

I am not a lawyer. So do not depend on my advice.
 

iridius

Junior Member
So, if I am not in america at the address where my mail is sent, I will not receive the court order, obviously, but I am still responsible for going to court right? I am overseas, so I won't physically receive the order, so I won't know, but my mail is accepted at my father's home. So, wouldn't there be a summons for my arrest if I don't go to court (even if I didn't personally physically receive the court order)

Why would I want to file Chapt 7 if I am already ignoring the credit, what benefit would that give me?

Which would stay on longer Chapt 7 or ignoring the debt.
Chapt 7 is 10 years right?
Discharged debt is 7 years right, but is that from the last payment, or from the last time, the credit card company reports you didn't pay, or from the last time the collections agency reports you didn't pay?

I know the student loans are not discharged, I will pay them off, but it will happen a lot quicker if I don't pay the credit cards and loan.

Is a loan (for the time share- a personal loan) treated the same as CC in terms of, you can't get arrested for not paying.

If so, is the worst that can happen, simply being summons to court?

I can't take a picture as I am in Russia and the boat is in New Jersey

How long do credit card companies usually wait before sending debt to collection agencies.

How long will collection agencies try to collect before stopping.

What would happen if I went to court, In other words, what would I have to do, what could happen.

thanks
 

Fred_BK

Junior Member
I am ignoring your loans in my response for now

So, if I am not in america at the address where my mail is sent, I will not receive the court order, obviously, but I am still responsible for going to court right?
There is no such thing are getting arrested for not paying credit card debts. The worse thing a CC company can do happens when:

1) cc company Sues you
2) You have to be properly served a court order
3) You have to ignore going to court at the time specified or not receive the court order because you never provided your address

If the above steps happen, then you lose and the collectors will be allowed to legally garnish your wages and take your property. In some countries arrest is possible but in the USA there is no such thing as a debtor's prison. There is no such thing as arrest!! Let readers here confirm this.

I am overseas, so I won't physically receive the order, so I won't know, but my mail is accepted at my father's home. So, wouldn't there be a summons for my arrest if I don't go to court (even if I didn't personally physically receive the court order)
Sometimes giving your address out to credit card companies is better. This is important for winning in court in case you get judgment against you. I mean you could prove to court that you have not been properly served the court order. So you could be dismissed for not being properly served.

In order to not be properly served the summons, the following must occur:
1) You could keep proof that the credit card company knows your current address (keep all paper correspondence with cc companies)
2) You mention in court that everybody has your address yet you never received the court order
3) The court will automatically dismiss the case and you win.


Why would I want to file Chapt 7 if I am already ignoring the credit, what benefit would that give me? Which would stay on longer Chapt 7 or ignoring the debt. Chapt 7 is 10 years right?
Chap 7 allows you a fresh start where you could start building credit from scratch (i.e., all credit card debt is cancelled and in some cases loans too). Chap 7 free you from all credit card debts except college loans. But even then if you contact your lender and tell them you filed for BK, then they will offer you a great deal.

Ignoring debt for more than 5 years without you having any contact with cc companies, entitles you to the STATUE OF LIMITATION (SOL) where you would become legally not responsible for paying your cc debt ($23,967). However, SOL is not very clear in meaning as bankruptcy. Every state has a different SOL rules. CC companies might assume you had transactions with them and so try to take you to court for the smallest thing. But everybody knows what bankruptcy means (it has a global meaning). So cc companies won’t waste their time because they know they can’t do anything or even harass you because Chapter 7 gives full protection.

So if you want to live in the USA for the purpose of business, then I suggest you do Chapter 7.

If you plan in living overseas, then remember that Chapter 7 is more powerful than SOL because it could be communicated more easily among countries that you want to apply for cc in. This is because it is a very standard procedure (i.e., most countries have and understand that BK translates into an extremely bad credit rating).

Discharged debt is 7 years right, but is that from the last payment, or from the last time, the credit card company reports you didn't pay, or from the last time the collections agency reports you didn't pay?
If you are referring to SOL, then it is 6 years http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

I know the student loans are not discharged, I will pay them off, but it will happen a lot quicker if I don't pay the credit cards and loan.
You cannot escape from loans. So think of paying them first or considering things like consolidation or loan settlement.

Is a loan (for the time share- a personal loan) treated the same as CC in terms of, you can't get arrested for not paying.
Again, there is no such thing as getting arrested for not paying. In other countries there is but not in the USA.
If so, is the worst that can happen, simply being summons to court?
Yes, but why the headache and just file for BK if you are returing to the USA for business.

I can't take a picture as I am in Russia and the boat is in New Jersey
Did you purchase it using a credit card?

How long do credit card companies usually wait before sending debt to collection agencies.
In my case, the fastest credit card to go to collection took 3 months (amoun $8000). This depends on the amount also.


How long will collection agencies try to collect before stopping.
Until they find out you have no property or money in the USA they could take from you. Oherwise, the expenses are too much.

What would happen if I went to court, In other words, what would I have to do, what could happen.
The worst case (in case you are honest in your answers to the court) is an order to pay money to the credit card company. If you have proof you filed BK or the SOL period has elapsed (so u are eligible), then you will not even have to pay a penny on your credit card debts. It's only the loans that you have I am concerned about.

thanks
 

iridius

Junior Member
other factors

No, I bought the boat cash, (and in 1 year, I've already paid double the price in storage, ha)

Now, to complicate matters. I used about $12,000 over the summer 2004 for day trading, and lost it. I know I know, don't day trade.

Second, I have a Roth IRA and that is approx. 6000 and I have 9000 in the bank, now, what would happen if I started taking that money out now, and stopped paying my credit cards in say 5 months, would that be fraud?

Third, what happens if you ignore a personal loan (from a bank) because that's what the loan is.

Fourth, I didn't follow too well about the address, are you saying I should give my cc companies my address here in Russia? All my mail currently goes to my father's home in the US where I used to live.

Fifth, if the summons is sent to my father's address and I am not there, (which I'm not) does it still get accepted as being sent, because I had that registered as my address? Or because my father lives there?

Sixth, what is the difference between being served a summons, and having a judgement?

Seventh, what would happen if the court decided that I was properly served the summons, but I was here and didn't get it. And I go back to America in say 3 years... Would there be a warrant out for my arrest for ignoring the summons? Or would the cc company win the judgement by default?

thanks for the help, sorry for so many questions.

btw, I have no wages, or property (besides the boat) and my business is online so I can be anywhere.
 

Fred_BK

Junior Member
No, I bought the boat cash, (and in 1 year, I've already paid double the price in storage, ha)
DON"T mention it. Since you bough it in cash there is no way for a creditor to track it or mention it in court. Just don't mention it as an asset when you file BK. This is because it's worth nothing. If you can use the SOL since you are overseas, it's better. Bankruptcy can be communicated easily to other countries while bad credit (without bankruptcy) usually stays within the country.

Now, to complicate matters. I used about $12,000 over the summer 2004 for day trading, and lost it. I know I know, don't day trade.
This helps you for bankruptcy. Since you now have lost more money, you have more expenditures. This means debts-to-income ratio is very good for filing BK.

Second, I have a Roth IRA and that is approx. 6000 and I have 9000 in the bank, now, what would happen if I started taking that money out now, and stopped paying my credit cards in say 5 months, would that be fraud?

Third, what happens if you ignore a personal loan (from a bank) because that's what the loan is.
If the account is in the same country where you defaulted on the credit card debts, then the credit card companies could take a certain percentage of your bank account money (after approval from court). So just stay away and don't file Bankruptcy in order to keep a good reputation in other countries. The ROTH IRA and 401k accounts are protected and nobody could take your money from them.

Fourth, I didn't follow too well about the address, are you saying I should give my cc companies my address here in Russia? All my mail currently goes to my father's home in the US where I used to live.
Someone advised me that if I want to make use of the SOL and vacate judgments against me, then I have to be properly served a summons. In order to be properly served, then I have to make sure that the credit card companies know my address and attempt to reach me but they couldn't. So if you use your father's address and you gave this as your contact address to credit card companies, then you could always say you’ve never received the summons and therefore, you can easily make use of the SOL and cancel/vacate all judgments against you. But stay away even longer from the USA and even your judgments (together with debt) will automatically be removed because they do also have a SOL. So there is a SOL on debt and a SOL on judgments. So you need to stay away a little longer than 6 years. This is my understanding from http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml

I think in your case the SOL is better than BK if you don't intend to make business in the US. For me, I see a business established here and BK is bad reputation so I don’t know what to do yet. I was planning debt settlement but all companies that do debt settlement don’t care about my credit rating. So bankruptcy seems the best for me.


Fifth, if the summons is sent to my father's address and I am not there, (which I'm not) does it still get accepted as being sent, because I had that registered as my address? Or because my father lives there?
Yes

Sixth, what is the difference between being served a summons, and having a judgement?
Judgement means the creditor sued you and won. Summons is just an order to appear in court.


Seventh, what would happen if the court decided that I was properly served the summons, but I was here and didn't get it. And I go back to America in say 3 years... Would there be a warrant out for my arrest for ignoring the summons? Or would the cc company win the judgement by default?
There is no arrest in the US. But I leave it to others to repond to confirm this an thus, help you become more comfortable.

thanks for the help, sorry for so many questions.

btw, I have no wages, or property (besides the boat) and my business is online so I can be anywhere.
 

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