Repercussions for outstanding debt

[Jebadiah]

What is the name of your state (only U.S. law)? Washington

Ill cut out some of the details of this for expediency. My wife now lives in Vancouver Canada as a permanent resident, before she moved to Canada she had a car w/ $11,000 outstanding on the debt. The car turbo was damaged and is now worth significantly less, maybe $4,000 at best.

If we decided to just not pay the debt, what would be the repercussions? The bank would repossess the car which is fine, but what else could be the long term effects? Could the debt eventually become criminal and stop her from returning to the US?

 

[Proserpina]

What is the name of your state (only U.S. law)? Washington

Ill cut out some of the details of this for expediency. My wife now lives in Vancouver Canada as a permanent resident, before she moved to Canada she had a car w/ $11,000 outstanding on the debt. The car turbo was damaged and is now worth significantly less, maybe $4,000 at best.

If we decided to just not pay the debt, what would be the repercussions? The bank would repossess the car which is fine, but what else could be the long term effects? Could the debt eventually become criminal and stop her from returning to the US?

Not unless something illegal was also involved. "Normal" debt is a civil matter and won't affect her ability to enter the country.

 

[Jebadiah]

Not unless something illegal was also involved. "Normal" debt is a civil matter and won't affect her ability to enter the country.

Nothing illegal, when we were going to sell the car the Turbo went and we just don't have the money to be able to pay off the car. Since my credit is really good in Canada, and if she already has an account in Canada with a credit card, there isn't much that her credit in the US being bad that will affect us.

 

[quincy]

What is the name of your state (only U.S. law)? Washington

If we decided to just not pay the debt, what would be the repercussions? The bank would repossess the car which is fine, but what else could be the long term effects? Could the debt eventually become criminal and stop her from returning to the US?

Proserpina answered your third question. An unpaid debt of the sort you describe, even if a judgment is entered against your wife, should not affect her entry into the US from Canada.

If you decide to just not pay the debt, though, there can be other repercussions for your wife (and you), both in the US and in Canada.

There are US collection agencies that have offices in Canada and the debt can be passed to them. If there is a judgment against your wife in the US, the creditor may not have any wages to garnish or assets to attach (unless you have assets remaining in the US). But a US judgment can be recognized by the provincial courts of Canada, which means Canadian assets and wages can be used to satisfy the judgment.

If collection action moves from the US to Canada, the Canadian credit reporting agencies can start reporting on either the unpaid debt or on the judgment.

Also, credit reports from the US credit reporting agencies (which will show the unpaid car debt and judgment) can be accessed by Canadians looking to loan money or offer credit, with access more likely if you and your wife lived in the US for any length of time. And, of course, if nothing is done in Canada and your wife comes back to the US to live, you have the credit history here to deal with.

But, as far as entry into the US, that should not be a worry.