The fine print: forced to leave the US with card debt
A clash with the US Byzantine immigration system forced reader Arun to leave the country after living and working here for more than six years.
He ran into credit card debt while unemployed in the United States. He has been in India for two years while his green card application is pending and is only making the minimal payments on his card.
Arun has not been granted a provisional return visa and has withdrawn the money from his US bank account. He is now concerned about maintaining good credit and his credit standing.
Communication with creditors
Even as you travel halfway around the world now, you could take advantage of the ubiquity of communication technology and proactively communicate your situation to your creditors.
You could Record your credit reportto explain that you have had to leave the country and that you do not have enough US dollar income to make your credit card payments. The Fair Credit Reporting Act allows you to leave a note explaining a financial setback or denying a mistake.
This is not a guarantee that a human will actually read this note, or that it will lead to an indulgent review of an outage, but at least this proactive step will make you feel better.
David Waxer, financial wellness expert at GreenPath Financial Wellness, a credit advisory firm, states, “This won’t help with his creditworthiness calculation, but it could give him extra attention on a return from a prospective US creditor.”
You can also contact your creditors directly, explain your situation to them and see if they can accept a temporary suspension of payments.
See related: How an immigrant can build credit in the United States
Old debts have long shadows
It seems unlikely that your creditors will take legal action against you to collect your credit card debt, given the low recovery prospect and cost of collecting what is relatively small to them.
However, if you manage to resolve your immigration problems and get back to the US, your old debts can still have ramifications. If this return occurs within seven years of a negative item on this debt (ex.
The impact of the negative points will be reflected in your lower credit score and this will be an inconvenience to you later in your life in the United States
As you may know, credit scores determine the everyday life of Americans in many ways, and your life as a credit pariah will not be a comfortable one.
They are less preferred by landlords, especially large management companies, when looking to rent an apartment. You are getting less than great rates on auto finance or home finance. You could even face higher auto insurance rates.
If you orchestrate that return more than seven years after your credit profile was clouded, the credit bureaus won’t be reporting these negative submissions. Your debt may at some point be held by debt collection companies, in which case you can pay it off or negotiate a lesser amount with them.
Settling debts could have an impact on your creditworthiness, but the impact would be greater with newer debts that are within a seven-year credit bureau Message window for late payment.
Maybe in the end you have to Pay taxes on all canceled debts, but. Collection agencies are also subject to a statute of limitations for the time they need to bring a lawsuit against you to collect the claim.
See related: 3 immigrants share how they achieved credit points over 750
Creditworthiness could have an impact on immigration results
Another development to watch out for is a pending proposal by the Trump administration to conduct an expanded credit screening process for immigrant applicants.
This proposal aims to ensure that immigrants do not become a public burden on the United States. If this proposal is accepted, a credit check could well become part of the immigration process. An immigrant would have to maintain at least an average FICO score, or a score close to the US consumer average.
Arun, that’s one more reason to keep your debt updated as you envision a future in the United States