What are the repercussions of walking away from both secured and unsecured debt?
Question Details: I have a house with first and second mortgages, and a time-share, both secured debt. I have two credit cards with outrageous balances, unsecured. I have plans to leave to country somewhere around the middle to later part of next year, most likely permanently. I'm pretty sure I can walk away from the secured debt and let my credit take a hit, but what about the unsecured debt? I'd hate to be arrested if I come back to the states for a vacation!
Bankruptcy Law Answers
As a general matter, there is no "debtor's prison" anymore--no jail time for not repaying debts, whether secured or unsecured.
The one caveat is that, fraud, of course, is a crime. Taking out debt without intending to repay it is fraud. If that was what you did, or you believe that the circumstances or evidence would suggest to creditors that you did this--i.e. that you meant from the start to repay, rather than legitimately borrowing but coming on hard times--it is not impossible that a creditor would file a fraud complaint with the police against you.
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