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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33875
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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Here is my situation. I left my divorce virtually penniless,

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Here is my situation. I left my divorce virtually penniless, but still forced to pay my ex $8000 per month in alimony. I had a business that allowed me to make those payments, but the business quickly tanked. The only thing I had left was a lot of credit cards, and I maxed them all out -- to a total of about $150,000 in cash withdrawals. I have been using that cash to make alimony payments and also to invest in a restaurant here in Central America which is just starting to make a profit.

The key thing to know is that I have left the U.S. with no plans to live in the U.S. again. I am happy here in Central America. I notified all of the credit card companies of my new telephone number and address 5 months ago when I moved, right after taking out the cash. I was told by at least one representative at a credit card company that they are not allowed to make telephone calls outside the U.S. This might explain why I have not received a single collection call even though I am 6 months delinquent on all my cards.

The question is, what are the credit card companies likely to do going forward? I do have one bank account in the U.S. where I transfer money in monthly that then goes to my ex, and I would not like to have the account garnished. But if I understand the law correctly, I cannot be garnished unless I am successfully sued, and the question is can an American credit card company sue me when I have no U.S. address for service? Do I have anything to worry about other than my American credit being destroyed forever (which I don't actually care about)?
Submitted: 11 months ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 11 months ago.
The question is, what are the credit card companies likely to do going forward?

A: You could be sued for a judgment, in the USA, but you would have to be served in your new home, under the Hague Convention on Civil Procedure. Assuming that you are successfully served, you would be subjected to a default judgment in the jurisdiction where you originally entered into the credit card account agreement. At that point, the original creditor (or, a debt collector, if the creditor assigns the debt) could attempt to enforce the judgment in your new home under the law of your home jurisdiction.

Central American courts are subject to a lot of bribery and graft, so whether or not any of this would succeed in collecting against you is unforeseeable. And, your jurisdiction may have its own bankruptcy laws that you could utilize to avoid the debt.

I do have one bank account in the U.S. where I transfer money in monthly that then goes to my ex, and I would not like to have the account garnished. But if I understand the law correctly, I cannot be garnished unless I am successfully sued, and the question is can an American credit card company sue me when I have no U.S. address for service?

A: See above.

Do I have anything to worry about other than my American credit being destroyed forever (which I don't actually care about)?


A: In theory, a creditor could locate your ex, subpoena her to testify as to where her support payments come from, and then use that info to reach your U.S. bank account. But, that's not a very likely scenario. And, without subpoenaing your ex, U.S. financial privacy laws would prevent the creditor or debt collector from determining the bank at which your account is held.

If you want to do a little more prophylaxis, move your account to a bank in a different state from that in which your ex resides, and make sure that the bank is only state chartered, so that it has no branches in your ex's state of residence. That way, if the creditor simply guesses that you are using B of A, Wells Fargo, U.S. Bank and/or Chase, to make deposits, it will guess wrong, and your account won't be inadvertently frozen.

Hope this helps.
Customer: replied 11 months ago.

But if I understand correctly, a credit can't go after my bank account unless they have received a judgment, which can only be achieved if I am successfully sued, which can only occur if I can be successfully served.


 


Before I came here to Central America, I went to London and stayed for a month in a short-term rental. The London address is the one the credit companies have. I never changed my address with them again when I moved to Central America. And I left no forwarding address in London. Does that make me essentially unservable?


 


If I look at this from the credit card company viewpoint, are they just out of luck? I mean, short of knowing where I am, is there any way that they are allowed to sue me? Is it possible that in the same way that they never even call me because I have a London number (and they are not allowed by company policy to call outside the U.S.) that they possibly just write-off any cardholder that is living outside the U.S.?


 


 

Expert:  socrateaser replied 11 months ago.

But if I understand correctly, a credit can't go after my bank account unless they have received a judgment, which can only be achieved if I am successfully sued, which can only occur if I can be successfully served.

 

A: I believe I covered this issue in my original answer, but to be clear, your understanding here is correct.


Before I came here to XXXXX went to London and stayed for a month in a short-term rental. The London address is the one the credit companies have. I never changed my address with them again when I moved to Central America. And I left no forwarding address in London. Does that make me essentially unservable?

 

A: Unless the creditor can somehow match a new credit report entry to you in your new jurisdiction, then you would appear to be beyond the ability of the creditor to locate. Here again, Latin America is rife with graft, so bribing officials as a means of locating someone can be accomplished. But, the creditor would have to know where you are located in general, before this could be done, and at this point, I don't see any means of accomplishing that goal -- other than to subpoena your ex.

 

If I look at this from the credit card company viewpoint, are they just out of luck?

A: Most likely, yes.

I mean, short of knowing where I am, is there any way that they are allowed to sue me?

A: In theory, a person can be sued by publication, but the creditor must obtain a court order, after showing that the publication has some reasonable probability of reaching the defendant (you). I don't see a court granting a publication order without some knowledge of your whereabouts.

Is it possible that in the same way that they never even call me because I have a London number (and they are not allowed by company policy to call outside the U.S.) that they possibly just write-off any cardholder that is living outside the U.S.?

A: The creditor will almost certainly charge off the account after about one year, because otherwise, the creditor can't deduct the debt from its taxable income. After that, it will sell the debt to a debt collector, and that debt collector will probably just hang on to the debt (or sell it to another debt collector to cut its losses), forever.

Because you are outside the reach of any court, the statute of limitations on a lawsuit is "tolled" (suspended) indefinitely. So, the debt will always be collectible, in the event that you are ever located by a debt collector.

As a practical matter, you're pretty safe from being sued. But, there is always a small risk that cannot be mitigated.

Hope this helps.
Customer: replied 11 months ago.

Last question to all of this -- should I ever decide to return to the U.S., could I then simply file for bankruptcy once I have a U.S. address and thereby eliminate the debt?

Expert:  socrateaser replied 11 months ago.
That's a difficult question to answer. You state that the debt was incurred in some part to pay spousal maintenance/support/alimony. If the creditor were to trace the payments, and then assert that your actions were intended to defraud the creditor, then the bankruptcy court could rule that the debt is nondischargeable, either as a domestic support obligation (BC 523(a)(5)), or as a fraudulent transaction (BC 523(a)(2)).

But, if a very long time intervenes, the creditor may simply not care any longer -- and debt collectors are generally not interested in incurring legal expenses except where the outcome of a case is practically certain (e.g., a "default" judgment). So, it's pretty likely that you could discharge the debt in a U.S. bankruptcy court.

Hope this helps.
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 33875
Experience: Attorney and Real Estate Broker -- Retired (mostly)
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