# American debt, running away



## zingozz (Mar 16, 2009)

I'm an American living in Canada. I've got a rather sizable amount of credit card debt which is pulling at my heartstrings and making it very difficult to live any kind of fulfilling life.

As I see the States as part of my past and not my future, I am disinclined to keep making payments. Until this point, I've actually been quite good--my American credit rating is 700+. I just can't justify paying money to a soon-to-be-nationalized bank in a country that I've left behind.

I'm not asking for moral advice; I'm quite aware that ethically this choice leaves much to be desired. My questions are the following:

1. How intertwined are Canadian and American credit rating systems? Do Canadian banks ever make inquiries into Americans' credit pasts?
2. If I eventually wanted to buy property up here, what implications would a destroyed American credit have on my ability to do so?
3. What legal resources do American financial institutions have to garnish earnings of expats living in Canada (if any)?

Thanks very much in advance for all your help,

Z


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## Auld Yin (Mar 10, 2009)

zingozz said:


> I'm an American living in Canada. I've got a rather sizable amount of credit card debt which is pulling at my heartstrings and making it very difficult to live any kind of fulfilling life.
> 
> As I see the States as part of my past and not my future, I am disinclined to keep making payments. Until this point, I've actually been quite good--my American credit rating is 700+. I just can't justify paying money to a soon-to-be-nationalized bank in a country that I've left behind.
> 
> ...


1) Canadian banks can/do access US Credit Bureaux
2) It would affect your ability to obtain credit
3) They can take legal action against you in Canada and garnishee your income.


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## nmreich (Feb 16, 2009)

When I read: "American debt, running away" I thought you meant the US Federal Debt running away (out of control). And still the Federal Resere/Politicians dig America deeper and deeper into debt by the tens of trillions. 

As for your situation, here is my advice:
Pay off the highest adjustable rate debt that you have first. For example if you have $5000 debt on a Mastercard that charges 15% and $1000 debt on a Visa that charges 20%, then pay off the Visa first. 
If you own a home, then refinance your mortgage to a FIXED RATE mortgage, even if that means having a slightly higher APR%. The Federal Reserve rate is low at the moment, but they can increase their rates any time they want - and WHEN they do, those people who have funky adjustable rate mortgages will be fried.
If you have substantial equity in your home in USA, then sell the home and use the liquidated funds to pay off other debts that you have. Renting is a good option in the near term as many people will get nuked in the coming year or two.

Remember: Debt equals slavery.


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## zingozz (Mar 16, 2009)

*Thanks both of you!*

You both have excellent suggestions and advice. Thanks very much for your candor and your thoughtfulness!

~Z


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