Hi My Friend went India without paying his credit card balances around $150K. Now he is unable to pay due to losses in business and what kind of actions can happen from credit card companies and/or collection agencies.

  1. Will the Bank/Collection agencies follow him
  2. Some of these banks branches are also in India, Will they able to file a suit in India ?
  3. Will all the different banks can have a same collection agency or different?
  4. What if he wants one or two year time to settle the amount?
  5. will the USA banks can seize his properties in India if he has any?

Your friend will be shut out of the credit market in the United States for a few years and that's it. (For people with deeper ties to the United States, this is seen as a horrible option too because it means they can't get a mortgage on a house and have known bad credit for basically a decade, or more.)

But this is treated as a default and the banks and collection agencies have no way reliable to collect outside of the country, and most likely won't attempt it. What they will do is try to sell the debt for a very low amount, the person that buys the debt for cheap may attempt to actually collect the money as they stand to make a HUUUGE profit (for example, they might buy the debt claim for $500 and still try to collect over $150,000 + interest). So it is possible he will be followed by debt bounty hunters, but most likely nobody will buy that debt when they do their basic research and find out that you - I mean your friend - went to India.

Your friend will regain access to the credit market in the United States faster if they officially file for bankruptcy. Some people don't want to do this either because the bankruptcy court records are public, even if it stops having a negative effect on your access to the credit markets in just a few short years, public perception can bring it up decades later, as seen with top US public officials and Presidents.

Outside of the US, a US debt matters very little - financially and reputation wise - and a lot of people do skip town after amassing large debts. Typically this just raises the interest rates on unsecured credit, analogous to how insurance pool premiums rise for everyone else due to some people abusing the system. The banks just mitigate risk on their lending bets and keep making money.

This answer specifically is not about the moral or principle opinions of these actions, and only the actual consequences.

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  • "But this is treated as a default and the banks and collection agencies have no way to collect outside of the country" This may be true practically, but it's not true legally. – Acccumulation Jan 29 '19 at 21:26
  • @Acccumulation correct, banks and collection agencies can attempt to use the legal systems of multiple countries to get paid. but practically they don't, at these amounts. and even at greater amounts this has limited efficacy. – CQM Jan 29 '19 at 21:39
  • This raises an interesting point. Could the creditor sell the debt of $150,000 to an debt collector in India for whatever small amount (say $500)? Perhaps this is not legal but an Indian debt collector is far more likely to be able to collect when the debtor in in their own jurisdiction and if this was common then it would dampen peoples enthusiasm to run up large debts in one country and abscond in the belief that there would be no effective down side. I guess there is a problem with this approach otherwise I can't see why it isn't commonplace. – Eric Nolan Jan 31 '19 at 10:43
  • @EricNolan there may be some legal/logistical problem, but there may also simply be that nobody has thought about it and have been stuck in old ways for a long time. The latter wouldn't be as improbable as you might think, strides in legal harmonization with regard to visas and quick cheap travel are all pretty new, add in lenders and then debt collectors that barely keep up with these changes and you may be in uncharted territory. – CQM May 14 '19 at 16:31

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