[skibumwa]

I had a lunch this past weekend with some of my new American friends and the topic of our US debt came into play. We were all wondering something? If we were NEVER planning on living or buying properly in the USA again AND did not pay back our Eg. student loans, US credit cards, other debts in the USA we know our US credit rating would take a hit, but would it affect our ability to visit the USA?

FACT: US credit scores and NZ credit scores are not affected (or hurt) by one another.

We are wondering if US Customs in Los Angeles Airport or San Fran Airport would harass us for having unpaid US Debt while we permanently lived here in NZ?

The exchange rate hit form us to send NZD to the USA to pay US-debts is painful to say the least. So when someone has to pay $670 USD per month for a debt, they are really paying $1000NZD for their US-debts. Does anyone know if the IRS will harass us is we earn less than the untaxable threshold of $82,500 USD/year?

I am sure I cannot be the only US citizen here in NZ wondering about this- right? :laugh (FYI- I only have $2000 USD in US-debt) :o

Cheers,

John

[Kea]

I've heard that UK companies can seek to recover debt. If you skip the country they can employ people in the second county to recover it. The cost of recovery, court action etc will be added to your debt so it can end up much bigger than it originally was. It seems unlikely that comapnies would persue a small debt but there are risks.... I've no idea about the US though.

Julie

[BkyMonster]

Don't know if this is quite related but several years ago, maybe 10-15, my father wasn't allowed to renew his Japanese visa because of outstanding unpaid child support. (He moved to Japan, remarried, and never paid my mother child support). He had to pay and ended up having to liquidate his business in Japan to pay off this US debt so he could stay in Japan.
Now this is child support which is different than regular debt, so may not apply. Also Japan may have a different deal with the US.

I'd love to....err ignore... my OH's student loan especially as the US changed the laws right as he graduated and student loans can no longer be consolidated for lower payments :(

[Moorf]

Personally I don't understand why you'd want to start a new life abroad with the baggage of debt in your home country - I couldn't do it, I'd be watching my back all the time - and let's face it, you benefited from the money you borrowed so why not pay it back instead of running away from it?

What if you need to renew your U.S. passport? What if you have to return to the U.S. (might they spot that you're entering the country and can they apprehend you (I think UK can)?)

Plus, collection agencies do have a presence globally these days and yes, they could find you... whether they bother for $2k is another matter.

What about offering to repay them at a very small amount per month - as you said, it's only $2,000 (about $3k NZ?)...

Just my (unborrowed) $0.02cents....

[kanatakiwi]

another possibly unrelated story but remember that NZ and Aus can get you at customs as you arrive if you have unpaid fines, child support etc. so its quite possible that US can too although I have not personally heard of any instances.

Back several years ago when NZ thought it unnecessary to have photo ID on drivers licences, people use to just give any name when they were stopped for traffic offences, including not having a licence.
We were harassed in Canada by a collection company in NZ about unpaid traffic tickets and fines, which we had to prove could not have been my OH's as he was in Canada at the time. Fortunately NZ customs provided us with a copy of all his arrivals and departures from NZ for the previous ten years and we were able to prove "identity fraud"--had to go to court to do so though. but my point is they can track you and harrass you and they do..... and they can put your name on a list to be picked up at Customs when you arrive in the country.

[Leccy-Lee]

Debts are civil matters and not criminal, and as such how can "entering country" or "renewing passports" matter at all, theres nothing that can be *done* about your debt etc, no "civil" court or debt collection agency in the world (afaik) can place any restrictions on entry or passports etc etc. In fact its amazing how people worry about the powers of Bailiffs / Debt Collection etc when if they did some research they would find out that powers are very very limited indeed.

Speaking for just the UK law here, i often heard friends say "oh got debt agency after me for an old Gas bill, they will come and take my stuff away...." Once i pointed out that only Customs have the power to do such they start to understand. With a UK debt agency all you need do is lock your home when you leave and refuse to let them in when your home and theres nothing they can do whatsoever other than annoy you. And yes i speak from experience back in the poll-tax days (all paid back i add, but i told the bailiffs to get lost).

Anyway, all i am saying is i cant see why worrying about it really, i would think other than write letters and ask nicely no debt has a jurisdiction in a different country. Somebody mentioned an old UK Gas debt finding them here in NZ, so why worry (pay it sure, but i mean why WORRY or rush?) No British agency or court has any jurisdiction to collect said debt over here.

I'd say rest easy and dont worry John, Sort out your own reasonable payments and clear your conscious (thats what i have done) but dont spend worry over it.

[Leccy-Lee]

Personally I don't understand why you'd want to start a new life abroad with the baggage of debt in your home country - I couldn't do it, I'd be watching my back all the time

Plus, collection agencies do have a presence globally these days and yes, they could find you.

"could" find you and do WHAT? As i posted above, they can write you pretty letters and ask for the debt back, but global or not they dont have a legal jurisdiction to enforce any debts. No UK / USA / Etc court can say "go to NZ break down there door, put a stop on there wages and recover our money". They dont have the legal power, it cant be done.

In theory they could try taking you to a NZ court and then recovery would be of course legal, but on legal grounds and sharing of information etc i pretty certain a NZ court would be unable to rule on a foreign debt as they couldn't legally get the info past data privacy.

SO, yes i agree moorf and others, do pay back your debts to keep a clear conscious and happy state of mind i totally agree, but worrying about being chased around the globe for civil debt just cant happen.

Anyway i'll shut-up now, just i had some run-ins years back with such agencies and companies and after hours of lawyers appointments and research i learnt that they love to scare you (and clearly it works with most), but in essence they have about as much power as you and I have to recover a debt!

[victoria24]

lee is dead right on this. I wouldnt advocate non repayment personally but its worth knowing that after 6 years, any debt in the UK comes under "Statute Barred" which means it cannot be legally recovered. A friend of mine had a letter from a debt collection agency stating he owed them £1200 on behalf of british gas. the letter stated that if he didnt contact them urgently, they would take immediate action. I called them up on his behalf (he did the DPA bit) and discovered that they work on the presumption that the average person wouldnt be aware of the legislation and try to steamroll them. When I challenged them, they admitted that they had no legal power over the debt and would appeal to better nature from a moral standpoint! needless to say, he received a letter stating the balance was zero and the account was closed!

its an interesting moral question at the moment with large corporations not honouring their debt obligations while senior execs still take large monies themselves. should they expect their customers to take an honourable attitude?

[dilanium]

I'll pay back my debt eventually. I'm working too hard to make it bigger at the moment though...

[skibumwa]

Thanks for all the responses guys. I am still wondering though, can US Customs at LAX or SFO stop you from entering the US though if you have unresolved debt? Can the IRS contact the IRD here in NZ to seize wages for unresolved US-debt?

With regards to morals and paying debt, well get this hilarious but true story. The day I left the USA for good (to move to NZ), I accidentally left my AT&T cel phone on the chair at LAX airport when I boarded the plane. I got to NZ and realised this and called them long distance to cancel my account due to the lost phone and moving overseas. I was past my contract date, so no worries there. However this is when the fun started. :laugh

AT&T told me that my final bill would be available to view/pay online in 1 day. But what she did not tell was that when AT&T cancelled my account, they also for some reason would automatically remove my online access to see bills. :raebanana

So I called them and asked to have them mail me a paper bill to my address in NZ. They of course said yes sure. Well 2 weeks past by and I never got my final bill. So I called AT&T again on a long distance number mind you! grrr! They next person I talked to said their "System" did not allow them to put overseas addresses into the database so they'd mail me a handwritten envelope instead with the bill printed out on the inside. I said OK to that. Well 2 more weeks past by. Never received it. I called AT&T back to complain. The lady told that the balance was $120 or so, and just to send an payment in. I told her "no way, I need to see the bill first to check for errors, then I will pay it after seeing it!!!". She said that they had no way to get me the final invoice and to "trust them". I laughed at her and said, "you want to pay a bill without seeing it?? No way!".

I never ended up paying it afterall because the incompetent company could not even get me the invoice in my hand.

My overall morale in this is also what Victoria24 states. If U.S. Corp Execs are allowed to run companies into the ground/deep debt (where US tax dollars bail them out), and but they are still drawing their big $5million paychecks, then why should I feel guilty about a credit card debt I left back in the USA to collect dust?

Anyway, my "AT&T final invoice story" still makes me laugh. It cost ME money to call a long distance number to get an AT&T bill so I could have given THEM my money. :laugh

:D

PS. In the USA, bad debt can only stay on your record for 7 years; this also goes true for bankruptcies as well.

[ourquest]

its an interesting moral question at the moment with large corporations not honouring their debt obligations while senior execs still take large monies themselves. should they expect their customers to take an honourable attitude?

Rather than what large corporations expect, it is what we expect of ourselves that matters in the end, so whether or not you intend to pay your bills is about whether or not you feel like honouring your agreement with the supplier of whatever it is you owe money for.

Although we all make mistakes, make poor decisions and get into difficult financial situations sometimes, the concept of actually planning to evade debts does not seem particularly ethical.

Speaking generally and with no specific reference to anyone contributing to this thread (as this is merely a discussion on the subject), intending to not repay debt really isn't very far removed from shoplifting or credit card fraud, and not getting caught or prosecuted (which is the general motive behind this thread) doesn't make the act any less selfish or disrespectful to the person or organisation which provided you or I with their service or product in the first place.

[victoria24]

i totally agree. there is a large difference which obviously translates into 2 different legal outcomes between evading a debt and the intent to defraud. if you owe monies and dont/cant pay them then that is a civil matter. if you obtain finance/credit with the intention of non payment then that is fraud and is a criminal offence and may result in a pull at immigration/customs.
like all things under UK law, determining which side of the fence a debt sits on is subjective.

[skibumwa]

If one cannot afford to pay 145% of what they owe because of bad exchange rates, then i don't see that as fraud. I see that as inability to pay. I know sending NZD to the USA for bills is a painful thing. A while back, it was was an $1 NZD = $0.82 USD which was fine, but now the exchange rate is crap no thanks to the US banks, the US Govt inability to properly manage large banks and the overall U.S. economy there that sadly effects the rest of the world.

Also, does anyone know about the US Customs rules and bad/unpaid debt then coming into the USA? I see everyone here mentions about UK Customs and UK laws which is nice to know, but really is of no concern of mine because I am not a UK Citizen... :nice1

Cheers,
John

[mackstann]

Rather than what large corporations expect, it is what we expect of ourselves that matters in the end, so whether or not you intend to pay your bills is about whether or not you feel like honouring your agreement with the supplier of whatever it is you owe money for.

Although we all make mistakes, make poor decisions and get into difficult financial situations sometimes, the concept of actually planning to evade debts does not seem particularly ethical.

Speaking generally and with no specific reference to anyone contributing to this thread (as this is merely a discussion on the subject), intending to not repay debt really isn't very far removed from shoplifting or credit card fraud, and not getting caught or prosecuted (which is the general motive behind this thread) doesn't make the act any less selfish or disrespectful to the person or organisation which provided you or I with their service or product in the first place.

Perhaps if it were with a local community bank/credit union or something, some guilt/shame would be appropriate. But with the monstrous banking companies in the US? They feel zero respect for you, and arguably screw over their customers and all tax payers as much as possible. Evading debt doesn't help improve the situation, but it hardly singles one out as being particularly unethical. The whole system is unethical, not to mention unsustainable (as we are starting to see).

I personally prefer to abstain from it all to avoid this problem in the first place, although if I ever decide to own a home, I may need to (begrudgingly) change that.

[migratory birds]

...some of my new American friends...We were all wondering something? If we were NEVER planning on living or buying properly in the USA again AND did not pay back our Eg. student loans, US credit cards, other debts in the USA we know our US credit rating would take a hit, but would it affect our ability to visit the USA?



Why would you want to do this?

You can run from personal responsibility all your life, never grow up and carry that ethical baggage of having ducked out on a choices each you made to borrow money for whatever reason to advance your own desires with you for the rest of your lives.

As for me, after selling my home, I need to pay off $60,000+ in student loans, $100,000 remaining on my mortgage, credit card balance, etc, etc.

...and it will be a relief to start with a clean slate.

I believe it's called personal integrity.

[migratory birds]

If U.S. Corp Execs are allowed to run companies into the ground/deep debt (where US tax dollars bail them out), and but they are still drawing their big $5million paychecks, then why should I feel guilty about a credit card debt I left back in the USA to collect dust?

But their climb to the top on the backs of others doesn't make it right or somehow more acceptable for you to do the same, even though it's for a smaller amount of money.

Whenever individuals or corporations rip off others, those costs don't just disappear, they're passed along to others directly or indirectly.

Losses from a grocery due to shoplifting are reflected in higher costs of those products others are buying honestly.

Corporate rip-offs or tax breaks are reflected in fewer services at the ground level.

If all are taking an eye for an eye or has the attitude such as yours that if big corporations are doing it and getting away with it, it's okay for you do, makes for an entire society of people who aren't so fun to live/work with anymore.

[James 1077]

Thanks for all the responses guys. I am still wondering though, can US Customs at LAX or SFO stop you from entering the US though if you have unresolved debt?

I can't answer this one as I don't know about US law but, in general under UK based legal systems, debt is a civil matter and so they wouldn't be able to. However if you owe the government money they may use this as an opportunity to force you to pay them back to it could be that this is the case.


Can the IRS contact the IRD here in NZ to seize wages for unresolved US-debt?

At the moment I think that the answer to this one is no. However NZ is currently renegotiating various treaties and I imagine the US one will shortly allow the IRS to ask the IRD to collect tax debts on its behalf and vice versa. This is now, for example, the case with the UK and Australia (Australia as of about 2 weeks ago).

[Mrs Pony]

I don't see how they would stop you from entering the country... When you don't pay a debt it goes to collections... if you still don't pay it, it hits your credit (but you still "owe")... if after 7 years in the US it gets taken off your credit and magically disappears! :)

My old apartment complex sent me to collections because they said that I owed money (which I didn't know of until I got a call from collections) - They tried to give me a "deal" and said that if I paid X amount now I wouldn't have to pay the whole amount - After faxing tons of info showing that I didn't owe anything (and after many different stories as to why I owed it) and getting told that a manager would call me back I never heard anything from them... now it's on my credit... which royally pissed me off because my credit was perfect!... Now the debt was only about $400 but I'm not paying it because I know and they know I didn't owe it...

It will be on my credit :( but if we get to NZ we will be there for a while so I'm not worried about it... We don't plan on buying anything here in the US that would have to look at my credit anyways...

Child support is usually court ordered which is why I can see that would cause an issue with coming & going...

[ourquest]

If one cannot afford to pay 145% of what they owe because of bad exchange rates, then i don't see that as fraud. I see that as inability to pay.

Again there is a difference between not wanting to pay, and not being able to pay. Only each individual will know which applies to them. If it is based on resentment against a foreign economy and how they have caused an exchange rate fluctuation, then it tends to come across as trying to find a convenient ethical excuse to take personal benefit out of not paying.

If an individual still has (for example) sky tv, broadband internet etc and still goes out partying and dining and then claims to be unable to pay their debts, then their plight has a hollow sound to it. As I suggested, it is for each person in this situation to know for themselves with reasonable objectivity.

[BkyMonster]

USA debt can only stay on your record for 7 years but student loans are 25 years or until you are 55, whichever is longer. :eek:

[DMcG]

Be aware of the difference between not paying off debt and not paying tax. Tax evasion is a federal offense - that can get you arrested as soon as you set foot on US soil.

Dougie

[Leccy-Lee]

Also, does anyone know about the US Customs rules and bad/unpaid debt then coming into the USA? I see everyone here mentions about UK Customs and UK laws which is nice to know, but really is of no concern of mine because I am not a UK Citizen..

On the contrary John, i had covered it for you if you read my posts!
NO civil debt anywhere in the world can stop you entering a country or have any restrictions placed on passports / customs or borders at all.
Now debts to government agencies etc (child support / tax etc) are a different matter, but certainly any civil debts wont affect you at all.

And i amazed at all this concern with money!

Yes call my "irresponsible" if you must, no personal integrity.....
But if there is one thing i dont worry "too" much about in life its money, i mean we will all be dead within a century (sorry to sound morbid) we all have such a little time on this earth, do i really want to sit home alone and pay a massive corporation back its $500 i owe it, or do i want to go out and see some friends and have an evening out? Well as life is so damn short, i choose to go out and enjoy life option. Sorry if that seems wrong etc, but as the saying goes "long time dead". All that said i have cleared 90% my UK debts and the rest are being payed slowly :nice1

But the one thing i confess i wont ever do is WORRY about some massive company with millions and fat-cat bosses wanting there few pennies back, Life is for living, money is for spending else what the hell are we doing on this rock if its not to enjoy life a little. Sorry but some personal tragedies in my family at very young ages have kind of jaded my outlook on life i cant deny.

[CJ22]

Word Lee. Some spectacular high-horsery in this thread :) Fat cats aren't about to run out of cream, so enjoy your semi-skimmed while you can :exit

[victoria24]

personally, I'm with lee on this one. family deaths at a young age changed my outlook on life and priorities.

[ourquest]

we all have such a little time on this earth, do i really want to sit home alone and pay a massive corporation back its $500 i owe it, or do i want to go out and see some friends and have an evening out? Well as life is so damn short, i choose to go out and enjoy life option.

Instead of feeling trapped by having to choose either one or the other, it is entirely acceptable to see both as important enough to plan for.

That way the superficial enjoyment derived from "going out and enjoying life" will not totally get in the way of the deep-seated self-worth derived from sometimes delaying gratification, considering others above ourselves and making sure that when this short life ends we leave behind a solid example of balance for our children.

Much of the worry in this thread is not about money at all, but about agreements, contracts and promises. We can each decide which action is more important for our children to learn from us: to take or to give.

[Flutterby]

my best advice is to contact the companies in question and sort out some sort of agreement, yes they may put marks on your credit rating, yes they may send you nasty letters, but they are usually have to oblige if they know they will get their money back eventually.
If you can't pay you can't pay, end of story, but theres no harm in trying your damnedest!

[CityBlue]

If one cannot afford to pay 145% of what they owe because of bad exchange rates, then i don't see that as fraud. I see that as inability to pay. I know sending NZD to the USA for bills is a painful thing. A while back, it was was an $1 NZD = $0.82 USD which was fine, but now the exchange rate is crap no thanks to the US banks, the US Govt inability to properly manage large banks and the overall U.S. economy there that sadly effects the rest of the world....

I think what a few people are suggesting is that rather than flatly say right its too much i'm not paying....why not enter into a negotiation to bring the payments down over a longer term. That way it wont be 145% of what they owe but x% agreed between the two parties.

and if the exchange rate drops for the worse again then re-negotiate.

Companies are more willing to receive a small regular payment than not at all IMO.

[mackstann]

my best advice is to contact the companies in question and sort out some sort of agreement, yes they may put marks on your credit rating, yes they may send you nasty letters, but they are usually have to oblige if they know they will get their money back eventually.
If you can't pay you can't pay, end of story, but theres no harm in trying your damnedest!
For those in the US -- if you plan on NOT paying it, make up your mind and don't contact the companies at all. The beginning of the 7 year period can be "reset" whenever you contact the company you owe. So once you make that decision, do not communicate with them at all.

[migratory birds]

Some spectacular high-horsery in this thread

But who's high-horsey? The white guy in a well-compensated field (IT) who wants to duck out on his measley $2000 student loan which likely got him where he is financially now enabling him to emigrate and likely spent half as much on this trip to the S Island http://www.emigratenz.org/forum/showthread.php?t=20805&highlight=solo and complains he can't pay because of the poor exchange rate?

Or those who are tired of the "me-first" attitude that seems to be prevailing in the 20-30-something crowd (at least in the US, llikely the UK as well)?

Sorry but this post got my blood boiling...

[victoria24]

errr.. what is the relevance of a persons skin colour to their attitude toward money?

[migratory birds]

errr.. what is the relevance of a persons skin colour to their attitude toward money?

No relation at all to ATTITUDE about money but rather INCOME/EARNING POTENTIAL. White men top the list in the US with women and people of color lagging behind - not just when comparisons of groups of people are made but when you are looking at wage compensation for comparable positions.

http://www.infoplease.com/ipa/A0763170.html
The Equal Pay Act was signed in 1963, making it illegal for employers to pay unequal wages to men and women who hold the same job and do the same work. At the time of the EPA's passage, women earned just 58 cents for every dollar earned by men. By 2006, that rate had only increased to 77 cents, an improvement of less than half a penny a year. Minority women fare the worst. African-American women earn just 64 cents to every dollar earned by white men, and for Hispanic women that figure drops to merely 52 cents per dollar.

The Bureau of Labor Statistics reported that in 2007 female financial advisors earned 53.7% of the median weekly wages of male financial advisors, and women in sales occupations earned just 64.8% of men's wages in equivalent positions.
-----------------
http://www.stats.govt.nz/products-and-services/hot-off-the-press/nz-income-survey/new-zealand-income-survey-jun-07-qtr-hotp.htm

Average weekly income from all sources for the 2007 June quarter:

was up 10.4 percent for males (to $832) and up 7.8 percent for females (to $510), from the June 2006 quarter.
------------------
http://www.stats.govt.nz/products-and-services/hot-off-the-press/nz-income-survey/new-zealand-income-survey-jun-07-qtr-hotp.htm?page=para004Master

Scroll down to see breakdown of income based on ethnicity in NZ

[victoria24]

think you may have missed my point. IMHO, the previous post looked like the forumite who started the thread was being judged by their colour which I find offensive.it's not something I would ever think about myself but your post caught me by surprise

[migratory birds]

the previous post looked like the forumite who started the thread was being judged by their colour

No, just merely a statement that a white guy, with no kids or family to support, in IT has no reason to state he cannot bring himself to repay his $2000 student loan because of the exchange rate.

Because of his ethnicity coupled with the relatively high paying profession he is in - it's a lame excuse.

I'm not JUDGING him, just stating a FACT.

White guys ARE paid more than white women or people of colour for similar positions.

[mackstann]

White guys ARE paid more than white women or people of colour for similar positions.
And black men (in the US) ARE criminals much more commonly than black women or white people. Does that mean that I go around assuming every black guy is likely to be a criminal?

There are statistics and valid generalizations that can be drawn from them that can be useful for studying society. But when you go around assuming things about an individual based simply on membership in a certain demographic, you are getting close to bigotry.

And IT is a broad category of work. There are high paying jobs but also pretty low paying ones.

[swissmissdesigner]

I think it is very sad when somebody tries to break a contract.
I agree with many people that commented above, such the importance of paying back a student loan, money that allowed you to make the salary you are currently making. After all in today's world, your education is your capital..

I am not wondering that we are having such a serious problem in the States right now, many people simply ignored the terms on their contract, and worse, never even read them in the first place.

By the way:Collection agencies in the States first try to work with the client in debt. No collection agency can just damage someone's credit without proving that they first attempted to resolve the issues (that is the purpose of a collection agency, if it was just about trashing someone's credit, a bank could do so).

I think a lot of people are lacking proper moral, and then blame the system. Money that was borrowed must be paid back, it does not matter what the circumstances are, the person in debt used that money and is 100% responsible for it.

Cheers:

Anna

[JCM]

Thread closed. It's not acceptable to link any forum member's behaviour to their ethnicity or race.