What happens if you leave Australia with credit card debt?

Leaving Australia with Credit Card Debt

Leaving Australia with outstanding credit card debt can have significant consequences, both financial and legal.

Financial Consequences

• Late payment fees and interest charges: Your credit card balance will continue to accrue interest and late payment fees if you fail to make payments while you are overseas.
• Damage to credit score: Missed or late payments will negatively impact your credit score, which can make it difficult to obtain future credit or loans.
• Collection action: If you have a substantial amount of unpaid debt, your credit card issuer may take collection action against you. This could involve contacting you by phone, email, or mail, and potentially even taking legal action.

Legal Consequences

In certain circumstances, leaving Australia with unpaid credit card debt could constitute a criminal offense.

• Tax implications: If you owe tax on any portion of your credit card debt, the Australian Tax Office (ATO) may take action against you. The ATO has the authority to track taxpayers overseas and recover outstanding debts.
• Civil liability: Your credit card issuer may pursue legal action to recover the debt, including filing a lawsuit against you. If a judgment is entered against you, you could be subject to wage garnishment or other collection measures.

What to Do if You Have Outstanding Credit Card Debt

If you are considering leaving Australia with outstanding credit card debt, it is crucial to take the following steps:

• Contact your creditors: Inform your credit card issuers of your plans to leave Australia. Explain your situation and discuss repayment options.
• Negotiate a payment plan: If possible, negotiate a payment plan with your creditors that you can afford while you are overseas.
• Consider debt consolidation: If you have multiple credit card debts, consider consolidating them into a single loan with a lower interest rate. This can simplify your repayment process and potentially save you money.
• Seek professional advice: If you are struggling to manage your credit card debt, you should seek professional advice from a financial counselor or debt management organization. They can help you create a plan to manage your debt and avoid further consequences.

Conclusion

Failing to address outstanding credit card debt before leaving Australia can have serious financial and legal implications. By taking responsible steps to manage your debt, you can minimize the potential negative consequences and protect your future financial well-being.