As the world gets smaller and more and more of us move either abroad or to America, Canada, Australia, or the UAE, the issue of carrying our debts with us, and insolvency issues, becomes more complicated and complex.
What happens if we move to another country and have accounts/debts there, and then move back to the UK?
What are the collection laws in various countries and how will they affect me if I move?
What happens to the accounts I owe if I just leave the country?
Can I be made bankrupt even if I am not in the UK?
As you can see, it can get complicated.
Each country can have their own laws on banking, debt, and the collection of debts, just as each country’s insolvency laws can vary.
Can Debts From One Country Be Collected In Another?
The quick answer here is yes, they can. However, as with everything, it can get complicated.
Example 1: You leave the UK and move to Australia. You left behind accounts you owed money on, and for a period of time you were making the payments on those accounts. Then for whatever reason stop making payments on the accounts in the UK.
You then receive collection notices and possibly a phone call from the creditor in the UK demanding payment. As the creditor or collection agency has no authority in Australia, there is little they can do to force you to pay. They could however, make you bankrupt in the UK, which if you have any assets anywhere in the world, could cause a problem, as in a UK bankruptcy, any property, no matter where it is located, can be taken in the bankruptcy.
The main issue here is going to be if the collection firm in the country where you had the debts, in that example the UK, has any authority in the new country where you live, in that example, Australia.
Example 2: You leave debts behind in the UK and move to an EU country. The creditor or collection agency my have authority to collect the debt as the UK is a part of the EU. This can vary amongst countries and collection agencies.
Can My Debts Be Sold?
Can an account or debt be sold to another bank, collection company to be collected… again, the quick answer is…..YES.
It is a practice that has gone on for quite some time. Let’s say for example you owe HSBC, or 123 Bank, or any lender for that matter, and you fall into arrears with the loan.
Then one day ABC Collections is phoning you asking you for payments. You’re thinking, I don’t owe ABC Collections any money, but you very well may. The collection firm could be collecting the debt for the bank you had the loan with, or they may have bought the debt from the original creditor or bank, in which case it is their loan and you owe them now.
This can get confusing for people, and if it does occur, the collection firm is to provide you the required information as to their acquiring the loan/debt.
If you have numerous accounts and they get sold onto other companies, and then you try to pay them off or settle them, it can be very confusing as to who has the account, and whom to pay.
Another confusing aspect is if you move out of the country, or have debts in other countries.
Example 1: Let’s say you have some debt here in the UK and move to America. It is possible the debt could be sold to an American debt collection firm, and they can chase you for payment there in accord with the laws and collection policies in that country.
This goes the same if you have UK debt and move to Australia or elsewhere. There are no guarantees the account could be sold on, but if it is, then the laws of that country come into play; and not all countries have as easy and lenient insolvency and collection laws as we do here in the UK.
Example 2: You had a few accounts in Dubai and when you lost your job there, you lost your Visa and had to move back to the UK. Dubai has a very antiquated and harsh collection system, you can go to jail for non-payment.
However, you are back in the UK where the Dubai collection agencies have no authority. The Dubai banks then decide to sell the accounts to a UK collection agency, and the UK collectors begin their collection efforts based on UK laws.
As you are now back in the UK, you are afforded all the debt management schemes and insolvency options to resolve the debts/accounts. It works in your favour, as opposed to Dubai’s harsh collection practices.
Can I Go Bankrupt In The UK From Another Country?
Once again the answer is yes, however, it can depend on what country you have moved to, and how long you have resided there.
In considering going bankrupt in the UK whilst living outside the UK, one must keep in mind some time constraints on doing this.
These windows of opportunity or time, vary according to what country you may now be residing in.
If you are now residing in any of the EU countries, you have three (3) months from the time you left the UK, to go bankrupt back in the UK.
After that time frame, you will need to go bankrupt in the country you are now residing and in accord with that countries rules and laws. Some EU countries have harsh insolvency and bankruptcy laws, and some have no real form of bankruptcy.
If you have left the UK and are now residing in any other country outside the EU, you have a three (3) year window of time to go bankrupt back in the UK. And you do not need to return to the UK in order to go bankrupt. You can have a representative file the bankruptcy forms on your behalf.
Does this mean you should wait three years until the time is almost up to consider and possibly go bankrupt, no it does not.
Much can happen in three years, yes your situation may improve, that would be a good thing; however the laws may get changed, the debt could be sold to a collection agency in the country you now reside, etc. None of these are good things.
However, if you are outside the UK, in a non-EU country for over the three year limit, you can still go bankrupt, but you will need to return to the UK and do this yourself. You cannot have a representative handle this for you.
Now should you chose to move back to the UK, regardless of where you were living, you will need to re-establish residency here back in the UK, prior to going bankrupt.
Usually this means living back here for a period of 6 months or more, and showing your majority of interest is in the UK.
What Happens If I Leave Unpaid Debts Behind?
A major concern many people have is what happens if they leave unpaid debts behind them. They have debts in the UK, or another country, and just move away.
What can happen?
Is it a crime?
Can I ever go back to that country?
UK: One example may be that you are a UK citizen, have some debt here in the UK, and move abroad or somewhere outside the UK. The creditor may try to collect the debt or even sell the debt as explained previously.
Then after a period of time you want to move back to the UK, and are concerned about being stopped or detained at the airport.
Just for leaving debts behind, you will not be stopped, questioned or detained. You are a citizen of the UK and are allowed back into the country. It is not a crime to just be in debt or to have left unpaid bills and accounts behind.
Another example may be that you are living in the UK on a Visa, have bills and debts in the UK, and need to leave the UK for some reason. Perhaps your Visa has expired and is not renewed.
You can leave the UK, and the unpaid bills and accounts behind. The same process may follow as above, your creditors may attempt to collect the debt or sell the debt on to a collection agency in the country you now reside in.
Then after a period of time you wish to return to the UK, perhaps as a visitor, or even by obtaining a new Visa, and you are concerned by the debts you left behind.
Again, just for leaving debts behind in the UK, you will not experience any issues entering the UK.
As for obtaining a new Visa, while for some Visa’s there are some financials that need to be stated or shown, the UK Border Agency does not ask about debts or any debts left behind.
It would be impossible to list each and every country and their rules and laws regarding leaving unpaid debts in that country.
It is safe to say that the majority of countries have no issue with someone leaving unpaid debts, and then returning to that country.
The United States and Canada do not deny someone back into the country if they have left debts or unpaid bills behind. However, one must keep in mind that as the world grows smaller, more and more debts are being sold to collection agencies outside the country the debt was originally taken out.
When does a debt become no longer owed?
When someone moves outside the UK, or even still residing in the UK, and has left debts behind, they may think they no longer owe the debts, or question as to a time frame when the debts drop off or are no longer owed.
A debt or account can be said to be “Statute Barred” if there has been no payment or acknowledgement of the debt for a period of six (6) years. This also means the creditor has had no contact with you.
The grey area here is if you move away and your creditors attempt to contact you, but have no new address, they may send notices to your old address, does this constitute contact?
Antiquated And Harsh Laws Regarding The Collection of Debts
Many Brits get jobs and move to Dubai or the UAE/United Arab Emirates. Their Visa’s to live in that country are tied to their jobs, and many people find good paying employment there. Once their jobs end, so does their Visa and they may not qualify for a renewal.
Naturally, while living there a person may purchase a car on finance, or take out a credit card or loan. With no job, how do you repay the credit card or loan? You cannot.
So what can happen to you?
- You can go to jail if you owe debt and cannot pay it back. A warrant is requested by the
bank/creditor, and the police issue the warrant for your arrest and imprisonment.
- Oddly enough, jail time satisfies the criminal issue, but not the civil issue.
- If you are not a UAE citizen, it makes sense to flee the country. Why stay around? You have no job or Visa, you will be required to leave anyway.
- If you are a UAE citizen there is a national debt settlement fund. This has just recently been started, and the majority of banks are participating. However, it is only for UAE citizens.
- If a warrant has been issued against you and enter a GCC country, you can be arrested. There is cooperation between the countries.
- From what research I have found, no one has reported a problem with changing flights in GCC countries.
- Foreign debt collectors trying to collect on UAE debts make harsh threats and can be harassing, but there are no reports of anyone being arrested back in their home country. The collectors have no authority outside their own country.
So obviously a good reason to try and stay out of debt, where ever you may choose to live. However, keep in mind, debts can be sold across country’s borders, and here in the UK we have consumer friendly insolvency laws. We hope you enjoyed this post from guarantor loans company buddy loans