Expert: Michael Brotherton - 6/13/2007

Question
QUESTION: I now live in Germany - I am going to forfiet my deeds to 2 homes one of
which has 135K$ on it but both homes have more value than the loans.  I also
have cc debts - just AE is over 25K$ and they are charging me 32%. And I
have a business loan for 75K$ which has failed.   I checked into Bankruptcy
but I do not have residency in FL any longer.  I have talked with an accountant
and an attorney and they both said to just walk away - that they will not be
able to collect from me in Germany.  Just a year ago I had 810 credit score -
and I have lost everything work and real estate in less than 9 months.  You
advice will be greatly apprecaited.

ANSWER: Unless you intend on paying the debts your credit is going to be affected. If you ever intend on coming back to the states to work and live you may have to deal with it. Bankruptcy may be an option at some point but may not be necessary right now. If you want to get a handle on it and try to deal with your situation, the foreclosures can be stopped. You can attempt to sell the properties as well. If you have an income you can get into a debt management program to pay the debt. It isn't an easy situation but if you want to do the right thing, pay your debts (if at all possible).

---------- FOLLOW-UP ----------

QUESTION: Can they come after me in Germany.   I would have no problem to try and
payback the amount but at 32% interest AE makes it impossible.  It was just a
very bad year - again I had an 810 credit score - I had to walk away from a
60K$ deposit on a house.   I am one of the speculators that got over
committed.  If I could just stop the interest for all of the bills - I would have a
chance - but it seems none of them will work with me - I just need to know
that my assets in Germany are protucted.  I do not plan to come back to the
US to own any assets - I have another company there with a partner - but no
personal assets and I do not care anymore about my credit rating.  It already
ruined - I kept it up for almost a year but I just cannot do it anymore. By the
way - I am very impressed with this service.

Answer
Although it may be possible to collect an out of country debt I do not believe most lenders will go there. As I mentioned in my earlier letter you can enroll in a debt management program. Most creditors will reduce interest substantially. I have seen reductions to from 3-9%. You may get out of debt in 3-5 years instead of 25-30 years. You are right by the way about creditors not being willing to work with their own customers, It is a shame but true. If you wish to accomplish anything with them you normally do have to go through a third party. It seems counter productive but then again no one ever accused creditors of being fair or for that matter intelligent. The whole system is backwards.