Help with Japanese credit card debt.

I'd like to thank everyone who's helped me so often on this site, I feel like recently, I've had a couple of related threads, this being the second in a few days, and I hope that you might lend me some advice as you all of you have done before.

While living in Japan my gf and I managed to rack up some credit card debt. I wasn't completely aware of how bad the situation was because as she said, she didn't want to tell me and have me "worry about money"... Though sometimes, when we would buy things, we wouldn't have money for this or that important thing--- This is not important, it's soley a confession, the way that confessions are meant to relive the confessor of some form of guilt, but, that's my burden, not yours.

To get to the point, I've been helping her to pay off the cards since I left Japan, I gave her a few grand when I left, and sent her another 500, and planned on sending her some more money when she returned to the US to work in a internship-visa program with a design company.

Today I received a rather frantic call from her detailing her problems with these Japanese credit card companies. It seems, in short, that no matter how much money we put to them that still--- she's in debt. Admitedly, and perhaps my previous plot exposition above elucidates this, she is not the best financial planner... I asked her if there was a way for her to pay off the cards bit by bit from outside of Japan, but she tells me the card companies tell her this is not possible, which is something that I can not seem to believe--- or at least comprehend.

I know that these card companies, are much like the ones in the US, and they will say things which may intimidate people into making payments such that they be will repaid sooner rather than later...

The card companies in question are OMC card & Aplus, and the debt is something about 30man en.

I want to help her as much as I can, as part of this debt was incurred when I lived with her--- It's hard for me to judge just what amount I've paid off to her, and what I owe--- but I'm complicit in the ignorance of not having all the figures myself.

Is there any form of debt relief in Japan, something that will allow her to continue on with her life without feeling as if she is being pressured by these companies to pay up or suffer endless amounts of interest, something I feel that we've been paying nothing but recently...

I'd like to commit to paying whatever small amount we can to these companies to get them off our (her) back, and allow her to move (if she even can--- she failed her last interview, she has a second soon)... But I really really don't know what to do.

I want to send her money, but I don't want to send her money and have it just be a pointless endeavor. So I turn to you all, my best and brightest source of help.

tasukete onegai shimasu...

Thank you again.

Been there, done that...

Are both of your names on the cards or just hers? If your name is on them, contact the card companies and get an accounting on what is owed. Is there a "consumer credit counselors" type of organization in Japan? If so, contact them and see about having them negotiate with the card companies to get lower payments etc. and get you and her on a payment plan. Most importantly, CUT UP THE FRIGGIN' CARDS!

ArmandV said:

Are both of your names on the cards or just hers?

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Just her name is on the cards.

ArmandV said:

Is there a "consumer credit counselors" type of organization in Japan?

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I'm hoping that there is such a thing... If what she tells me is true, $3000 is not such a high amount to pay off.

ArmandV said:

Most importantly, CUT UP THE FRIGGIN' CARDS!

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We (she) no longer uses the cards... it's paying them off that seems to be killing us (her)... I'm no longer there, so, it's hard for me to offer more than money & moral support on the phone.

yukio_michael said:

Just her name is on the cards.

I'm hoping that there is such a thing... If what she tells me is true, $3000 is not such a high amount to pay off.

We (she) no longer uses the cards... it's paying them off that seems to be killing us (her)... I'm no longer there, so, it's hard for me to offer more than money & moral support on the phone.

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Has she contacted the card company(ies) to see if she can negotiate smaller payments?

She should cut up the cards. Then there'd be no way she can slip up and use them again. Having them is too tempting. The consumer credit counselor will also have you cut them up in front of them.

First off I have a hard time seeing how a total of 30 man is killing her.

Is she unemployed or something. Japanese card companies expect a minimal payment payment along with interest, so for a 300,000 total bill she probably is getting a monthly bill for between 15,000 to 20,000 yen per month.

If she is having trouble with that then there are probably other issues as well.

I dont make all that much money and I have a coupld of credit cards here and the total charged on them is well over 300,000, yet my payments are roughly 30,000 per month, that is if I don't use them for anything else.

Then if the bill is 300,000 per month then she has debt up to her eyeballs or is still using the card and charging the hell out of it each and every month, oh and those wouldn't be your debts either I'd bet.

With my credit cards, I usually have to pay the full amount every month. It's called ikkatsu-barai, and at least in my experience seems to be the most common payment scheme. If I were late with a payment, I honestly don't know what would happen, but as Obeika says, 30man en or roughly 3,000 US dollars isn't THAT much money.

If you have already sent her several thousand dollars, I hate to think how much the original debt was, assuming that actually used the money towards paying it off! (Not that I doubt your girlfriend, but having cold hard cash can burn a whole in people's pockets, you know.)

Why not ask her parents to help?

Mikawa Ossan said:

Obeika says, 30man en or roughly 3,000 US dollars isn't THAT much money.

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Are we talking 30000 yen? If so, that isn't $3,000 U.S. dollars, it is more like $280.00. $3,000 in U.S. dollars is a lot of money to have to pay per month.

The situation is rather vague for me, and I don't see the whole picture so I might be wrong, but both OMC and Aplus are the cards mainly for cashing loan, though they do have ordinary credit cards functions as well and she might be using one card to draw cash to pay to another card, and then to pay this card, using another card to draw further "cashing".... so the money goes from one card to another, the payment never finished and only the interests accumulate.
(Interest rate credit cards in general offers for loan is quite high, OMC offers loan at 28.8% p.a. I've just found out.)

It really depends on the card, some cards immediately make your credit allowance zero if your payment is delayed, but others are not so strict, if you have JPY300,000 limit (which means you can draw money up to JPY300,000), once you used up the limit, then pay back JPY100,000, then they allow you to draw JPY100,000 again, even the payment is a little delayed.

Many credit companies offers ﾆ椎?ﾆ畜窶｢ﾂ･窶堋｢ revolving payment, saying you have to pay only a very small money you've set up when making the card.
Many years ago I once used this system for rather a big shopping, not really understanding what the revolving payment could mean, and regret it later - the amount I paid every month was small that means most of the amount consists of interest, it took me ages to complete the payment.
After that, I always use credit card to pay it soon, ﾋ?ｪﾅ?窶｡窶｢ﾂ･窶堋｢ ikkatsu barai only.

Being in debt must be very tough - if she has to think about how to make the next payment for those cards all the time, she must be under the big pressure. I can imagine how deseparate she feels.

It is very important to find out from her
- how much she earns
- how much she can afford to pay every month (one cannot use all the money one earns, one needs money for everyday living)
- how much she owes each card
- how much she has to pay monthly for each card

If she can borrow money from her parents, as Mikawa Ossan suggested, that would be the best. Paying just a small amount each month won't help, because the interest is so high, the longer it takes, the more she has to pay just for interest sake.

If the total debt is 30man Yen, she should pay the whole money right away and finish the loan. (If she borrow the money from parents, then she can pay it back to them every month, within the amount what she can afford. At least she doesn't have to worry about the high interest rate.)

If the amount 30man Yen is what she has to pay every month, then it is more serious - the total debt must be much higher and what she's paying monthly consists of a lot of interest and little to pay for the money she originally got.

Also it is important to make her see she how she should manage her money, how much she can spend, also to give up all the credit cards she has for a while.

If the amount is much bigger than 300,000 Yen and she has no one to turn to (besides you), then she should consult one of the lawyers specialized in loan. Recently I see a lot of advertisement by those lawyers who help people with a big debt to organize the payment so that they can lead normal life. Even one of the lawyers office put a booklet in my postbox. (So the money problem must be really common and many people are suffering, I guess.) Of course the charge is not too small (even the charge is reasonable) so this option is only when her total debt amount is really big.

I hope she can sort this out soon.

PS. If you want me to check something or to find some more specific information, please send me a PM.

ArmandV said:

Are we talking 30000 yen? If so, that isn't $3,000 U.S. dollars, it is more like $280.00. $3,000 in U.S. dollars is a lot of money to have to pay per month.

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Armand the way I read that was 30man meaning san-ju-man yen or 300,000 yen. Which as Mikawa-san wrote is roughly $3 Grand US.

3man would be 30,000 yen or roughly $300.00 US.

Here's a little more information after reading the original post more closely, hoping it might be of some help.

Is there any form of debt relief in Japan, something that will allow her to continue on with her life without feeling as if she is being pressured by these companies to pay up or suffer endless amounts of interest, something I feel that we've been paying nothing but recently...

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I believe there are four "forms of debt relief" in Japan.
The below three are the possibility for your case.
1. ﾅｽﾂｩﾅ津遺?挧ﾅｽYﾂ voluntary bankruptcy
2. 窶戮ﾋ?督青ｮ窶板敖 voluntary consolidation?
3. 窶愿≫?｢ﾃ岩?卍ｲ窶凖｢ﾂ specific mediation?
(I'm not sure about the terminology in English, they might be wrong.)

1 is to announce one's bankruptcy, so that she doesn't have to pay the debt anymore. 2 and 3 are to reschedule the debt and she still has to pay the debt.

It is technically possible to arrange to apply for one of the above by herself, but normally it is arranged through a lawyer or judicial scrivener. It costs, but surely easier to let experts handle it.
Of course in any case she cannot use loan or credit for a certain period of time (in case of bankruptcy it is for 7 years). There are merits and demerits for each method.
Here's a list of demerits (not complete but some important points) for each method.

1. He name is to be on the list of the insolvent debtors at the local government ﾂ（ﾅｽs窶卍ｬ窶伉ｺ窶禿ｰﾂ湘ｪﾂ）
Her name will appear on the government gazette (though normally people do not read such gazette.)
She won't be able to dispose her property without permission
She cannot move her address or go on a long term trip without the permission from the court.
(So if she's going to the US for internship, this method is not an option.)
All the posts and mails are forwarded to her trustee who has right to investigate the contents.

2.& 3 She still have to pay back the debt in 3 years or so. If the monthly payment is not affordable, she will have to go bankruptcy eventually.
If she does not have regular income, she'll be regarded totally insolvent and cannot apply for this solution.
Like other cases, she will be on the list among the financial organization.
(That means she won't be able to apply for new loan or credit cards, etc. for a certain period of time.)

She should visit this site, she can get the basic and accurate information about those "debt reliese". It is run by a judicial scriveners office, and if she has questions or need to consult, they offer free consulting services.
I listed only the disadvantages in this post, but of course each method has its advantages as well. If she read the details, maybe she can find which is the best way for her case.
自己破産ドットコム～自己破産の正しい知識と手続きの進め方

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edit:

More sites she can get counselling for free.
http://www.tajusaimu.net/
自己破産の無料相談はみらい司法書士法人
http://www.ninniseiri.net/
Welcome to shakkinn.com
http://www.minnjisaisei.net/
Also a warning - there are many so-called "loan sharks" ﾋ?ｫ窶慊ｿ窶ｹﾃ?窶濃窶ｹﾃ?ｽﾃ akutoku kin'yuu gyousha around, who offers their services to "consolidate your debt into one" ﾅｽﾃ倪?ｹﾃ?窶堙戸?ｪ窶怒窶ｰﾂｻ shakkin no ipponka. Unless it is a lawyer office or judicial scriveners office, never, ever listen to them. They are pretending to help the desperate debtors but practically draw them into further debt.

Get her to fax you all the statements.

Your whole problem was initiated through ignorance (not trying to be harsh). If you are serious about paying the bills and taking care of the problem, find out what exactly you are up against. It might be very easy for you to get a small loan in the US to pay off the bills.
But I would get a copy of all the statements including the ones showing your previous payments. You said she was not the best financial planner. Maybe you are incorrect and she is actually a very efficient spender, rather than a poor financial planner. You could probably learn alot from those statements.

And if she doesn't want to fax them to you, oh well, it is her card not yours.

good luck
Kilt.

Japanese credit card debts do not need to be paid by foreigners. We could just take as much loan as possible, yank all the money out in cash, and return to our homeland without consequence.

Kilt said:

Get her to fax you all the statements.

Your whole problem was initiated through ignorance (not trying to be harsh). If you are serious about paying the bills and taking care of the problem, find out what exactly you are up against. It might be very easy for you to get a small loan in the US to pay off the bills.
But I would get a copy of all the statements including the ones showing your previous payments. You said she was not the best financial planner. Maybe you are incorrect and she is actually a very efficient spender, rather than a poor financial planner. You could probably learn alot from those statements.

And if she doesn't want to fax them to you, oh well, it is her card not yours.

good luck
Kilt.

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Unless you are a Japanese dual citizen, there is no incentive to get a loan from your own homeland to pay off debts in a foreign land. Credit beaureau doesnt follow you. What you need to do is before leaving the country, to take as much cash out as possible, and take a hike. You pay your domestic bills with it.

Another thing is for those who want to renounce US citizenship to obtain a Japanese one, if you do need to do it, ensure that you enroll at a university and go on a ROTC scholarship. Get the US Army to pay for it, take out loans of all sorts, and say, see ya later. If you renounce your citizenship for a Japanese one, they cannot make you serve. Japan will not let their nationals serve in the US Army. For those with dual citizen Canadian, don't try this at home. Canada will co-operate with the US on this one. For those who are UK and Canada, and had their education in Canada to fly off to the UK, the crown will follow you, and make you pay. But US and Japan, it is very possible, so before renouncing citizenships, please rake all you can.

I also have an OMC card. I'm guessing that she borrowed all this money under the cashing "revolving" payment plan and is paying back at about 10,000 per month. Despite what everyone says about it not being a lot of money, the killer is the roughly 29% interest rate. If she looks at her bill carefully, she will find that out of the 10,000 each month, probably only 2,000 ~ 3,000 is going to pay down principal, with the rest being interest. It is very easy to get "upside down" at those sort of rates (meaning that you end up paying practically nothing but interest every month, while the principal diminishes only a little or not at all). If she's on a 5,000 per month plan, it almost a dead certainty that she's paying no principal whatsoever and the interest just keeps mounting up and compounding. She has to buckle down and make early payments on it. There are a couple or three ways to do that. The easiest way is to go to the same sort of machine she borrowed from and put money in instead of taking money out. That, and up her monthly payments on it so as to get the principal/interest ratio swinging in her favor.

If she has any sort of credit with her bank at all, it would make sense to borrow the whole amount at the much lower rate (probably 8%~12%) from the bank, pay off OMC, and then pay back the bank on those easier terms.

Thank you all very much for the information. I'll pass this all on to her--- It's hard for me to help being so far away, but the best I can do is try to help her with money, and to help her to see that things can be worked out in different ways and everything isn't as dire as it sometimes seems... Thank you very very much for all of the help you all have given, this definitely gives me some direction.

honto, arigatou gozaimasu.

The number one thing you need to make sure of is that she is looking carefully at the card statement and notices the part that says:

内訳 元金 xxxx円 お利子 xxxx円

The first figure indicates the amount of principal paid down that month. The second figure indicates the amount of interest paid down. If she is on a 5,000 or 10,000 per month リボ payment option, you may be shocked to see how very little of that is going toward paying down the principal. Of the amount she has elected to be her リボ payment each month, they take interest first and then whatever is left (if anything) goes toward paying down the principal. Naturally, the credit card company isn't really interested in having the principal paid down. They're happy to never see any of it paid just so long as those interest payments keep coming in regularly every month.

If you're sending money, you need to make sure that it goes toward making a lump sum early payment (separate from the normal once a month withdrawal from her bank account) so the principal will actually dip. That will go a long way toward getting the King Kong sized interest monkey off her back. I don't mean to get too deep into your personal business, but there exists the possibility that she may be using any money sent to ease her living expense burden (which is understandable, but it doesn't provide any forward momentum on the debt problem, the solving of which would alleviate the living expense burden).

This next isn't meant as a specific comment toward your girlfriend, but is just a general observation, so don't take it personally:

Japanese women enjoy a reputation of being fantastic managers of money. I'm here to tell you there are exceptions to the rule. I'm married to one. My wife doesn't blow money; I'm the one who does that. But she does such an inadequate job of keeping me informed of our money situation and managing the bills and whatnot that a little over a year ago I went to the hardware store and bought a little 500 yen metal toolbox and a combination padlock. Now I handle all the money and pay all the bills myself. The point of locking everything up was not to keep her out of the money. Nor should it be construed as meaning that she spends irresponsibly. It is just that making her have to come to me and ask for money was the only way I could make her communicate with me about money. When she ran things our phone got cut off for nonpayment of the bill at least three times a year. Her best record is getting it cut off twice in the same month, a feat she has accomplished at least twice. Not that we didn't have the money to pay it, just that she was too disorganized about household finances to keep on top of things like that. So these days I handle everything, the bills get paid on time, and with just a very little bit of extra work (you can pay everything either online or at conveniece stores these days) I finally have peace of mind and no one to be mad at but myself if something doesn't get handled in a timely manner. The point of a combination lock instead of a key lock is that I don't always get to come home every night, due to the nature of my work, and if something comes up suddenly I can always tell her the combination over the phone and then change it when I get home. Just putting everything in the box and getting it all in one place wasn't enough. When I tried doing that minus the lock, she would immediately go back to tapping the till and failing to tell me that she had been in the cashbox (leading me to think we still had more than we actually did, since I don't go into it every day myself).

Point is, fellas, don't put too much faith into stereotypes about Japanese women's domestic management abilities. If you see that there is something you can handle better than your better half, step up and do it. It will increase your peace of mind and the peace in your home. And while she might resent it at first, when she sees things are going smoothly she will likely be secretly relieved at having that onerous burden removed from her shoulders. It's a team effort, and so long as things are being handled, it doesn't matter which one of the team is doing it.

Another thing is for those who want to renounce US citizenship to obtain a Japanese one, if you do need to do it, ensure that you enroll at a university and go on a ROTC scholarship. Get the US Army to pay for it, take out loans of all sorts, and say, see ya later. If you renounce your citizenship for a Japanese one, they cannot make you serve.

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I know I'm late, but just wanted to point out a very overlooked aspect of this "plan". You cannot renounce your citizen ship (legally) while you are indebted to the nation. There are all sorts of forms and procedures you must go through to give up your passport, and they check what you owe in taxes. I'm sure for a college education paid for by the government, it's even worse.

Sure, you can tear it up and leave. You can't go back to the US again, and there's a chance they may come after you, as Japan and US have that whole mutual extradition thing going.

As other posters already mentioned, I recommend you getting the full information from her as it is difficult to manage money issues without knowing the actual number. In Japan, when people is in debt, they feel ashamed of themselves because the Japanese culture tie in "debt" with "shame." It is likely she may need your emotional support.
I've been away from Japan over a decade and I am being out of touch. But, I was told people don't use credit cards that often in Japan and the most of the daily transactions are done on cash basis. If that is so, I would have a difficult time to adjust when I get back to Japan because I use credit cards all of my daily purchase (that makes it easy for me to manage money as I can log in MS Money to see what I am spending). Once I use cash, it is difficult to trace where it goes.

Am I the only one who thinks that the banking situation in Japan is extremely weird? (Non-existent interest on savings, little or no options for loans until recently, a huge number of high interest "cashing" services, etc).

Just to let everyone know, the cards have been paid off in full by a loan from her mother... The money that I send her now, what ever that may be, will go towards her living expenses, so at least I know, even if it is spent on beer, that it's not simply going to pay off interest with no real hope for debt relief...

Thanks again for all of the help... In the end she did exactly as what was suggested by you all, in some way or another--- move the debt away from the high-interest cards, and pay it back in another manner that doesn't have such crippling interest rates.

I've been away from Japan over a decade and I am being out of touch. But, I was told people don't use credit cards that often in Japan and the most of the daily transactions are done on cash basis.

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Compared to America, cards are definitely not used as much. Compared to Japan 10 years ago... you will be surprised. They have definitely come a long way. Some small shops don't use them, or insist on charging the customer 5% (to cover the 3%-4% service fee they must pay the card issuer).

Am I the only one who thinks that the banking situation in Japan is extremely weird?

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No, the rest of the free world thinks this as well. It's no joke, the only thing good about Japan's banking system is the ease at which you can send money to other people electronically... although they're putting limits on that now as well.

I'd rather buy anybody a beer, even a rank stranger, than pay usurious interest to a credit card company.

GaijinPunch said:

Compared to America, cards are definitely not used as much. Compared to Japan 10 years ago... you will be surprised. They have definitely come a long way. Some small shops don't use them, or insist on charging the customer 5% (to cover the 3%-4% service fee they must pay the card issuer).

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Do stores show the credit card stickers on their main entry point (if not, at least near the cash register areas where customers can see easily) if they are going to accept the credit cards? I recall pocket changes kept accumulating in my pocket, which I don't really like. I feel Japanese may not start using the credit cards for purchasing daily necessities (because of the appearance that using credit cards is to borrow money----which is true; but, if you pay off the balance every statement cycle, you are not in debt)
Are debit cards (which are like a paperless check book) used in Japan frequently?
It's just not convenient to pull out the paper money (or heavy 500 Yen coins) and changes from the pocket, count it, and hand it over the merchant at each transaction.

JerseyBoy said:

Do stores show the credit card stickers on their main entry point (if not, at least near the cash register areas where customers can see easily) if they are going to accept the credit cards?

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Yes, infact I noticed my local convenience store finally accepts credit cards (about time), so I'll be paying my bills on the card and accumulate "points" - 3000en worth in 2 months and growing I love interest/fee free cards with point systems.

Are debit cards (which are like a paperless check book) used in Japan frequently?

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I tried to get one when I opened an account at Citibank and was told to wait 6months, but they were willing to give me a Visa card on the spot - weird considering I'd held a debit card for years from my old bank which they provide as their normal card.
Cash still reigns supreme and I know more than one family that keeps in excess of 1,000,000 yen squirrelled away all over their homes.

GaijinPunch said:

No, the rest of the free world thinks this as well. It's no joke, the only thing good about Japan's banking system is the ease at which you can send money to other people electronically... although they're putting limits on that now as well.

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Seemed about as easy as Australia, including the inconvenience when you mess up (more than a week to return money if sent to the wrong bank by mistake).

Wasn't the Japanese system considered their weird and fantastic thing trumpeted by various experts, until it collapsed...