Creditors and Bankruptcy/Foreign debt
Thank you so much for making yourself available.
I have an outstanding balance of about $18000 on a credit card that was issued in Germany. I'm originally from Germany and live in California since 3 years back.
Last week I was contacted by a US debt collector trying to collect the money. I'm struggling with my job now I have no way of paying this debt.
My question is can they damage my credit history in US?
How far can they go since this is a debt in a foreign country?
Can they sue me?
Or should I just send them a "cease and desist' letter and not worry about it anymore?
Thank you for your time. Please help me with this,I really appreciate it.
Will they make a negative entry on your credit report? If you check your credit report that has probably already happened.
How far can they go with this? Probably what has happened is the debt has been assigned or purchased by an American debt collection agency, and if that happened, the debt may has well have been incurred in the United States. If the debt has NOT been assigned to an American debt collection agency, technically speaking they could still go after you - they would just have to register the judgment they obtained in Germany here in the United States.
Can they sue you? Absolutely. If you were told that they could not, whoever told you that is mistaken. Will a cease and desist letter work? Not so much. True, it will keep that particular collection agency from calling you, but their move will be to either sue you or send it to another collection agency. The cease and desist letter doesn't help you much.
So what should you do about this? Basically, you have three choices: Do nothing, fight them, discharge the debt in bankruptcy.
Doing nothing is the worst thing you can do. Chances are very good that they will get their judgment and you will have continuing problems - potential wage garnishment, lien on your house if you own one, etc.
Fighting them would involve waiting until they sued you and then trying to get the case dismissed because of statute of limitations, because of their lack of records, etc. Hard to say what the exact argument would be without knowing exactly what is happening here. How much do you know about what has happened to the debt since you had last contact with them?
Bankruptcy might be the easiest and quickest option. This might provide you an opportunity got you to make a fresh start, and with all of your debt discharged, oddly enough, your income to debt ratio would be better and your credit background might even improve - even though bankruptcy is a negative in and of itself. It is also very unlikely that you would actually lose anything if you did that, and depending on your circumstances, you could do the bankruptcy for a relatively modes price - i.e., I would charge you $250 if you wanted to do a bankruptcy and it is possible you could also get the filing fee of $305 waived. However, whether that is a good idea or not depends on other facts you don't state in your question. You are welcome to call me anytime you wish at the following number if you would like to discuss this further and I can give you more specific answers to your questions. I will not charge you just to talk on the phone.
Jack Hall, J.D.