Can Debt Follow You to Another Country? 

Wondering if debt can follow you to another country, even after Brexit? You’re not alone! Over 170,000 people visit our website each month seeking advice on issues like this. 

In this guide, we’ll explore:

•  If moving abroad can help you escape debt and if it’s legal
•  How to handle credit card debt, tax debt, and student loans when moving
•  What happens when you move with debt solutions
•  How debt could affect your visa application
•  If a foreign debt can be collected in the UK

We are aware of your concerns, as our team has experienced similar situations.

We’re here to help you understand how to handle your debt and make informed decisions about your future.

Can You Go Abroad to Escape Debt? – Leaving the UK with Debt

Well, in some cases, yes, but this gives creditors other ways to claim what they’re owed.

So the best course of action is to deal with your debt before going abroad. Keep in mind that international debt collection is getting easier!

If you leave any country with debt, your creditors may choose to pursue legal action and take you to court in your new country, or they could employ a debt collection agency to find you.

Keep in mind that different countries have different laws for dealing with debt avoidance and debt collection agencies. You will probably find that it is much less onerous for you to stay in the UK and argue with your creditors.

You may also find that the country you choose to move to has an agreement for debt collection.

For example, the UK has agreements with some countries including Australia and Canada.

Under these agreements, your creditor could just sell your arrears to a debt collection agency in the other country and they will then chase you for your arrears.

When you are away, your creditors can claim any and all assets and estates you hold back in the actual country of residence.

They can take just as much as the money you owe them.

One other thing that happens is the continuous addition of late fees and other additional charges. These together hike the owed money to an even higher amount, which is of course even harder to pay off.

This means that if you try to avoid arrears by moving away, you may just be allowing your creditors to charge you higher.

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Can You Leave the UK with Credit Card Debt?

There is no law that says you can’t leave the UK if you have debt, even if that debt went to collections.

But from my experience, it is always best to pay off your debts before you move. This is because any fees or interest owed on your debt will carry on adding up while you are away.

You will need to pay this back if you return to the UK if your creditors haven’t traced you before.

Can Tax Debt Follow You to Another Country?

All other debts apart, it is especially not an easy task to dodge tax debts. 

While most other creditors may have a hard time chasing you for the debt if you have moved to a different country, the HMRC will find it quite easy.

This is because of an international network of tax authorities between European countries known as MARD or Mutual Assistance in the Recovery of Debt.

Under MARD, HMRC can chase any and all arrears from a person who moved abroad without spending too many extra amounts, as long as the person is within Europe.

The UK is still part of MARD after Brexit.

Outside of Europe, it becomes a little harder for HMRC to chase a person for tax arrear. But they still will try to get to you in other ways.

Can You Move Abroad with a CCJ for Debt?

A CCJ or a county court judgment is issued to you by the court of law if your creditor takes your debt case to the judge.

This is generally done when you have not missed several payments.

If your creditor sells your debt to a debt collection agency, the agency can also go to court to get a CCJ against you. This can only happen if you have missed payments from your repayment plan.

In these instances, a CCJ will usually mean bailiffs or High Court Enforcement Officers enter your home and remove high-value items to sell at auction. These profits will go towards paying off your debts.

You can move abroad with a CCJ on your record.

However, if you do not stick to the terms of your CCJ, your creditors can take further action against you.

While a CCJ will not be enforceable in a foreign country, you may find that your creditors can apply to your new local court and alert them to your status.

This can lead to legal action against you in your new country.

Leaving the Country with Student Loans

If you try to escape student loans by moving abroad, you’re going to find it pretty much impossible.

The government is being more strict about students who move abroad to try and avoid paying back their student loans.

If you are caught, you are going to end up in legal trouble with your Student Loans Company (SLC). And now information is so easily shared across international borders, you can be sure that you will eventually be found.

In the unlikely event that you are not found, you will probably never be able to go back to the UK.

This is because the SLC will have almost definitely referred your case to a credit agency or debt collection agency after you have missed payments and not contacted them to repay what you owe.

As you will have been uncontactable while you were away, you will have missed any legal action that they tried to take against you.

It is therefore possible that your student loan defaults have led to sanctions in your name and possibly even prosecution.

Keep in mind that you can accidentally default on your student loan if you move abroad. This is because you need to notify your SLC if you are away from the UK for more than 3 months and complete your repayments manually.

Repayments will not be taken out of your pay automatically.

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What Happens When You Move with Debt Solutions?

If you have taken out some form of debt solution, you need to find out if you can move abroad.

An Individual Voluntary Arrangement (IVA), for example, will usually not be transferrable to another country. You need to make all of your contracted payments on your IVA or it ends, and you will be liable for the full amount of your debt with interest and fees in one go.

This can easily bankrupt you. This is a serious legal status and bankruptcy consequences can be lifelong.

If you move while bankrupt, you need to make sure that you move to a country that will recognise your status.

Your creditors may be able to take legal action against you if you move to a country that does not uphold your bankruptcy status.

You need to be aware of borders in the UK!

Filing for bankruptcy in England and Wales does not automatically mean that your bankrupt status will apply in Scotland or Northern Ireland! This is because the whole legal system is separate.

You will need to reapply for bankruptcy if you move from one of these legal territories to another. Don’t hesitate to seek advice!

Can Debt Collectors Follow You to Another Country?

Yes, a debt collector would willingly chase you to another country.

When creditors try to legally reach you in some other country, it is financially hard upon them. This is because to hold you accountable for an arrear back in the UK, while you are abroad costs a good amount of money. With that money being involved, creditors rather let the debt go.

However, they could also not take the matter into their own hands and sell your arrear to a debt collector. 

For a debt collector, it is easier to reach you in another country for an owed amount of money.

This is because when your creditor sells your debt to an agency, they don’t just sell it to a local agency. They instead look up where you went and sell an arrear to an agency located in that new country.

If you are abroad and that place chases you for debt, then of course you are easily held accountable for the owed amount.

FAQs – Moving Abroad and Leaving Debt (UK)