Can Debt Follow You to Another Country? – Complete Guide, Loopholes, FAQs & More

When you leave your home to go to another country, your debt does not come after you.

Although you are still indebted and the owed amount does not automatically cancel, you don’t really carry it either.

It’s not as complicated as it sounds, and I will be telling you exactly why and how in this post.

Can I Go Abroad to Escape Debt? – Leaving UK with Debt

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

If you leave any country – including the UK of course – your creditors cannot legally chase you for the amount that you owe them. But what they can do is to go after the assets you leave behind. 

If they want to legally come after you for their money, they will have to file the case against you in a foriegn court, which will cost them so much finances that they would rather give up the arrears.

But there are some exceptions to this. 

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, and lawfully so.

One other thing that happens is the continuously adding 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.

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 have a hard time chasing you for their fairly owed amount if you have moved to a different country, the HMRC or Her Majesty’s Revenue and Customs has an easier time doing so.

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.

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 Leave the UK with Credit Card Debt?

Yes, you can leave the UK with credit card debt, or any other form of arrear for that case, because you can only be prevented from leaving your country if you have committed a crime.

Not being able to pay your debts is not a criminal offence. Therefore, you may be able to move to a new country as it is not a criminal action to commit if you are indebted to credit cards in the UK, or any other countries for the record.

Your creditor may take your case to the court however, and then a CCJ would be issued to you.

A CCJ will have a pretty bad impact on your credit scores.

What is a CCJ?

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 when you continuously fail to respond to your creditors and they find no other way around the situation. 

One could say that it is a solution similar to selling an arrear to a debt collection agency. Except that in this case, the creditor does not forward your arrear to someone else, but rather takes the matter in their own hands and takes you to the court.

On being issued a CCJ, it is a legal order for you to pay back the owed amount to the court. This is a struggle for the debtor as it brings with it a lot of additional charges, like court fees, etc.

However, even under a CCJ, you can leave your country and move away. Because again, even not paying back a CCJ is considered a criminal offence. 

Leaving the Country with Student Loans

Escaping student loans by moving away to some other countries is way harder than avoiding any other arrears. 

No matter wherever in the world you are, your creditor wouldn’t be chasing you but would be continuously adding extra charges to your total debt, making it way higher than it initially was.

You will always owe them the arrear and the more time you take to get rid of them, the bigger will the amount you will have to return.

How Long Before Debt Gets Written Off in the UK?

For almost any arrear, including tax debts, the maximum period for a creditor to claim the owed money is 6 years.

After 6 years, the complete arrear is to be written off of the credit report. In fact, even a CCJ is not valid in the court of law after 6 years.

One other way to put this would be that if you move away abroad for 6 years to avoid a debt in the UK, you would be going back debt free.

All your unreturned debt, your additional charges, late fees, etc., would be written off.

However, this is not the case with student loans.

When students arrears are concerned, the arrears are written off after 30 years. This means that unless you are already a foreigner in the UK, only then would it be possible for you to dodge the student debt, and even after that, your chances of getting back to the UK would be hard.

This behaviour is not promoted and debt should not be avoided to an extent that you wait for it to be written off of your credit report.

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 takes a good amount of money. With that money being involved, creditors rather let the debt go.

However, they could also not take the matter in 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.

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

Pay Off Debt Quickly Before Leaving the Country

The smarter call would be to try getting rid of all your owed money before you plan to move abroad.

Some steps you can take for this approach would include the following.

Pay Off Expensive Debts First

If you try to make expensive debts your priorities, you will have an easier time paying the remaining amounts off as they would be easier to deal with.

Of course, the lower the amounts, the lower instalments you will have to pay, even while making a short plan.

Consider Side Hustles (Take up Freelance Work)

If you are struggling to manage your debts along with all your other essential expenses too, you can try looking up other jobs for yourself too.

It is always convenient to have an extra amount on your hand if you are trying to get rid of some old loans.

I would say freelance work is a good option to avail in such trying times.

Negotiate with Your Creditors

You can also try to talk to your creditors into accommodating you in a number of ways.

For example, you could ask them to freeze your interest. if they reject your request to do so, you can always write another appeal, or wait for them to at least lower down the interests to some extent.

Other ways would be appealing that you are in extreme monetary difficulties, and/or are unemployed. In such cases, the creditors might be generous enough to write off the debt as a whole.

Watch Your Spending Habits (Needs vs Wants)

Another factor to especially take into consideration while paying off your debts would be by making yourself a well planned budget.

You need to be able to tell your wants and needs apart, so that you can spend the minimum on essential expenses, and save more.

This daving can then of course be forwarded as an installment to all the loans that you need to pay back to all your creditors, and so on.

charging order

FAQs – Moving Abroad and Leaving Debt (UK)

How does debt affect my credit score?

Debt is one of the biggest factors that could decline your credit score. You can check your credit score on Experian or Equifax.

This is because debt makes up a solid 30% on your credit report and therefore has a huge impact on your future loan approvals etc.

The better history you have of timely payments, the greater will be your chance of getting the next planned loan.

Can I be stopped at airport for debt (UK)?

You cannot be stopped at an airport in the UK for simply not paying your arrears.

This is because failing to pay back loans is not a criminal offence. 

Can I go to prison because of debt?

You cannot be sent to prison for failing to pay back your loans.

This is because not being able to financially pay back an owed amount of money is not a criminal offence.

What happens to my credit history if I move abroad?

Your credit history does not move with you when you move away.

However, in the previous country of stay, all your debts, etc., do remain active for a period of 6 years.

What happens when I return back to the UK?

If you return back to the UK with previous debts, you will not only have to pay those debts back, but also the additional charges, late fees, fines, etc.

The only exception is when you return to the UK after six years of those debts. By that time, your debts have been written off.

Winding it Up

While there are chances of you being able to dodge your owed loans to your creditors, know that it isn’t the best thing to do. 

There are other ways you can deal with financial challenges. These would include asking the creditors to freeze or lower the interests, or having the debt written off due to extremely poor financial conditions. 

If you need more debt help or advice about how you can pay back your creditors, feel free to reach out. I’d be glad to help.


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