Greetings,

I'll try to be brief. I am a German citizen and have been in the US for the past seven years on a student visa. I received BS and MS degrees here. My visa is about to expire and I am about to leave the States since my visa is about to expire. I am about $30,000 in debt (credit cards, bank loan, car loan, and motorcycle loan). There is a good chance I'll be back in the States this August to start a PhD program on a full fellowship. If this is the case, then I'll be able to pay off the debt, albeit very slowly. However, I won't able able to make any payments until I start the program, i.e. for the next four months.

How do I go about dealing with that? Should I send a letter to the banks/credit card companies and explain the situation? What will be their response? There's not much that they can do since all the loans except for the car are unsecured (the motorcycle is not worth much, having been in a crash) but I still wonder what is the right way to approach this situation, and what is the way banks deal with such situations. My credit so far is perfect in the sense that I have never had a late payment, over the limit, repossession, bankruptcy, etc.

Any advice or links to helpful websites is appreciated.

Thanks,

ML

Definitely recommend contacting the lenders - the last thing you want is a record of defaulting on the payments.

That's presuming you can't bring together enough capital to cover the repayments over the 4 months?

Funnily enough, I know a student in Canada making about $500/month selling advertising on his blog hosted at the uni. If you can get a blog set up on the university site, feel free to contact me and I'll put you in touch with some advertisers if you wish.

I know that's a little offbeat, but any reasonable way to cover repayments while you're gone needs looking at so that you can protect your credit rating. Don't want slipped payments now haunting you in a couple of years when you need it least.

2c.

Since you are going home for a while, you may want to sell the car and the bike and use that money to cover payments for the coming months. You say you have perfect credit, that is something to be proud of, and also protective of. If you let things slide now, it can be years before you are back to where you are today with your credit.

Yes, if you cannot make the payments you should talk with the bank. They will want to know how, and when you can make things right again. Although they may work with you for a while, do not be surprised if they report things as delinquent.

You may also ask around to see if there will be an impact on your visa situation if you have left debt behind.

Contact the banks and agree to make the minimum payments, if you can scrape them up. Some banks will temporarily lower the payment or interest rate in situations like this.

Yes, sometimes if you are honest with them they might make an exception and let you make a lower payment. Not saying for sure they will but it cannot hurt to ask. That and it is always better in the end to let them know that you have not just run off on the loan. Especially since you will be leaving the country.

Will you be working while you're back home? With the internet, you can make payments online. So, possibly you could make the minimum payments while you're gone, and then make more than minimum when you return.

Being in debt sucks! I know the feeling. I have been lucky on the stock market, and hope to be out of debt by the summer.