I’m a long-time lurker with a ton of respect for the knowledgeable people in this community. Now looking for some personalized advice about a financial mess I’ve gotten myself into. Throwaway for obvious reasons.
In 2010 I left Japan for the period of 1 year with the intention to return after I completed graduate school studies in my home country. Prior to leaving Japan, I had worked full-time for three years with on a working visa. I had a credit card at the time connected to my primary bank account.
I moved back to Japan (same city, same employer) in 2011 and have since lived a “normal” financial life—have paid bills on time, have always paid taxes, etc. I was unable to get a subsequent credit card after several different attempts but always assumed it was because of the short length of my visa status/ work contract. (The banks, of course, never gave reason as to why they denied my application.)
I got married in 2020 and was granted PR earlier this year. I am also now a permanent employee at my company. My wife and I are in the process of applying for a house loan, and have been denied without reason by three different banks in the last couple of weeks. The realtor thinks I may have unpaid debt, so last week I started a deep dive of my financial history get to the bottom of it, starting with credit check applications to CIC, JICC, and KSC.
My credit checks with CIC and KSC came back both completely blank (“white”), save for records of the recent house loan applications. (The JICC results still pending.) This didn’t make sense to me, so I decided to consult with the bank directly yesterday about whether something in my history with them could be causing my loan application to be declined.
To my surprise, I had unpaid credit card debt from 2010 of about 70,000 yen when I left the country. After unsuccessfully trying to contact me for months, the debt was paid off by the credit card company’s guarantor company in a process called 代位弁済 (subrogation).
I had no idea any of this was happening and this is the first I’ve known of it, 13 years later. I honestly thought that I was square and paid off when I left Japan. I know it doesn’t matter to the banks, but I had no intention of leaving unpaid debt, I just mistook that I had made the final credit payment when there was another one pending. (Frankly, I’m also a little baffled as to why my bank never mentioned it to me when I continued banking from the same account when I moved back the following year–it’s been my primary bank account since.) Anyways, that’s all beside the point— ultimately this is 100% my fault. I messed up royally and want to make it right.
If possible, I want to pay back the debt and clear my name so I can eventually get a home loan. My wife (Japanese) thinks we shouldn’t contact the credit card company directly, but instead go through a lawyer. I’m inclined to agree. But before we make a move we are both trying to learn as much as we can about potential outcomes to manage our expectations throughout the process, which is why I am posting here.
So my questions for anyone in this community with knowledge about this process or even a similar experience:
**(1) Is it even possible for me to repay the debt now that it has been subrogated?**
**(2) If so, will the unpaid balance have accrued interest? (I’ve read that 20% interest is the maximum legal rate for loans, so I estimate that the balance should be in the realm of 75万円 to 90万円 by now depending on when the period started.)**
**(3) Assuming I can pay off the debt with interest, will my credit history ever recover? Or am I blacklisted for life?**
Any other insights or advice would be very much appreciated. Many thanks in advance for anyone who takes the time to read and reply to this.
(And to any youngsters reading this — I hope you can learn from my mistake. If you ever leave the country for an extended period with any intention whatsoever of returning, please make sure you don’t have any unpaid debts.)
by Lopsided_Year8307