Can I Escape My Debt By Moving?

Moving to a new place can bring a lot of fresh starts, but will it help wipe your debt slate clean? Many commenters getting ready to relocate to another state have asked whether a judgment in their old one will still stand, once they have moved. Unfortunately, unlike a ratty old couch or all those terrible holiday sweaters your great aunt kept giving you for Christmas, old debts aren’t something you can really leave behind.

In fact, “the United States Constitution requires the new state to give full faith and credit to the judgment issued by the first state,” April Kuehnhoff, a staff attorney at the National Consumer Law Center, said. However, the creditor or debt collector will have some business to take care of before they can come knocking on your new door.

“To reach assets in the new state, the creditor must apply to a court in the new state,” Kuehnhoff said.

Most states follow what’s known as the Uniform Enforcement of Foreign Judgments Act when it comes to dealing with cases that cross state lines. The Act requires that creditors file an authenticated copy of the judgment with a court in the state where enforcement is sought and an affidavit establishing the names and last known addresses of the debtor and creditor. The court will then send notice of the filing to the debtor at the address the creditor provided.

In places that don’t follow the Act (California, Massachusetts, Puerto Rico and Vermont), “the process of domesticating a judgment … may be more complicated,” Kuehnhoff said.

But, in either case, you are ultimately legally responsible for the debt, given the original court ruling against you. And your move won’t do anything to stop a judgment from appearing on your credit report and damaging your credit score while you wait for new paperwork to be filed. (You can see how your debts many be affecting your credit by pulling your credit scores for free every month on Credit.com.)

What Can I Do?

Creditors or collectors often treat judgments as tools to get a debtor to repay on a debt, so, whether you’ve relocated of not, there’s still a chance you can avoid a property lien or wage garnishment.

“Contact the creditor to try to work out a payment plan or try to negotiate for a lower amount [than what the judgement requires you to pay],” Kuehnhoff said.

You may also want to consult a consumer law attorney in your new hometown to see if the move entitles you to some extra protections, regarding how a creditor can collect what you owe. These laws vary state by state and the creditor or debt collector behind the judgment will be required to honor the rules in your new hometown.