UK Debt When Moving Abroad

The idea of moving abroad to escape debt seems to be more of a common practice these days. People with failed businesses or swamped in debt seem to think moving abroad will give them a fresh start, free from debt and allow them to build a new life.

It became obvious after reading some of the comments on various UK debt forums that there is divided opinions on this. Some people think running away from debt is too much of a risk, and believe the creditors will eventually catch up with the debtor, whilst others encourage the idea, stating that there is no way debtors will be found and seem to encourage people to move on and enjoy a new life free from the responsibilities of debt.

In the past this might have been a successful way to start a new life without the worry of unpaid debt. However, creditors and courts alike seem to have caught up with the idea over the last few years and have taken action to make it more difficult for people to escape the responsibility of repaying outstanding debt.

Creditors taking action

Some countries, such as Germany and Canada, have reciprocal agreements when it comes to tracing debtors and debt collection practices. There is not an awful lot of information regarding which countries have reciprocal agreements and which do not. Could it be that creditors do not want people to become too clever so have not made it common knowledge? However, a search around the World Wide Web might disclose a few more countries with these agreements.

A reciprocal agreement in the UK means a UK Court can enforce a CCJ (County Court Judgment) using the legal system of the other country. If there is no such agreement in place, a creditor can sell a debt to the relevant country where the debtor resides and debt recovery procedures will commence under the law of that land.

Tracing a debtor

The resources available to creditors nowadays when it comes to tracing a debtor are vast. Although the resources in other countries may be limited, there are still ways and means of finding people, especially once the creditor finds out which country the debtor has moved to. A creditor may have their own department in that country, or relations with other credit companies in that area.

Creditors can also try a tactic or two to locate someone's whereabouts. They may go to the last known address, talk to the neighbours, family friends or relatives who could unknowingly tell them of the person's whereabouts. Once they know which country the debtor is in, their job is made much easier.

Using an ATM card in another country shows us how easy it is to get information from a UK account abroad. If we can do this so simply, what other information is able to zip round the world almost instantaneously?

Having resources to trace a debtor or having agreements with other countries, or even the possibility of selling the debt to an agency in the appropriate country does not automatically mean that a creditor will be successful in tracing a debtor. In some cases, people do get away with it. It is however a risk for anyone considering moving abroad to avoid debt. A creditor has a period of 6 years from the last time a person acknowledged a debt to use the legal system to recover monies. However, if a creditor has taken legal action on an account, the debt can be legally recoverable indefinitely. This means that someone could start a new life abroad and work hard for the assets they accumulated, only to find a few years down the line that a creditor has traced them! This could mean everything they have worked for is put at risk and could be taken from them to repay their debt.

What are the Options?

Many people who move abroad who are struggling to keep up with their repayments may not be aware of the free financial help available. They do not even need to telephone the UK, as there is free advice and help available on the web, just a quick email can put someone's mind at rest and make them realise they are not alone.

There are companies such as FCL Debt Clinic, who can offer a free financial assessment and advice. FCL Debt Clinic can also refer clients to a Debt Management Company who charge no fees and can help negotiate affordable monthly repayments on their clients' behalf by setting up repayment plans with their creditors. Anyone with a UK bank account or the use of one for transferring money, with UK debts, can be helped. This way, the ever-present worry of whether a debt is still around is no longer there to haunt someone.

Nicola Bullimore has been working with people who have debt problems for a number of years. For more information regarding debt issues, please visit our Debt Questions website.

How To Make Sure Your Debt Relief Plan Stays On Track
istockAnalyst.com, OR - Jul 19, 2008
All these things, however, pale in comparison with the importance of sticking to and staying focused on your debt relief plan. It can be very difficult for ...

You can claim tax relief if mortgage is forgiven
Akron Beacon Journal, OH - Jul 18, 2008
Under the Mortgage Forgiveness Debt Relief Act of 2007, you might be able to exclude from tax up to $2 million of debt forgiven on your principal residence. ...

Some Homeowners, Sellers Get Break Under New Law
WFMJ, OH - Jul 18, 2008
However, Congress carved out an important exception when it passed the Mortgage Foregiveness Debt Relief Act of 2007. According to the IRS, ...

‘Farm loan waiver to push up govt expenditure’
Livemint, India - 5 hours ago
Firming up of interest rates on government debt paper, outgo on account of the Sixth Pay Commission’s recommendations and farmers’ debt relief package ...

Allco Finance wins debt relief from its bankers
Wall Street Journal - Jul 16, 2008
Allco has been in talks with its bankers since a dramatic fall in its market capitalization triggered a review of its debt. The new agreement runs until ...

Govt expenditure likely to over-shoot by 21%: CMIE
Economic Times, India - 18 hours ago
Firming up of interest rates on Government debt papers, outgo on account of the Sixth Pay Commission's recommendations and farmers' debt relief package ...

NDTV.com
Debt relief Waiving, not drowning
Economist, UK - Jul 3, 2008
In Sikandrabad one farmer could not quite believe that the pink slip he had been given released him from 25000 rupees of debt. But others did not get the ...
Union Bank completes farm-loan waiver, relief programme Hindu Business Line
Banks in JK identify 34000 beneficiaries for debt relief GreaterKashmir.com (press release)
Himachal government urges to Centre to look into debt relief ... myHimachal
Business Standard - NDTV.comall 81 news articles

Debt relief scheme benefits farmers
The Statesman, India - Jul 10, 2008
... informed district collector Mr Pramod Chandra Patnaik, while attending a meeting on ‘Agriculture Debt Waiver and Debt Relief Scheme-2008’, here today. ...

Mortgage Workouts, Tax-Free for Many Homeowners
Gather.com, MA - Jul 18, 2008
Normally, debt forgiveness results in taxable income. But under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude from tax up to ...

Credit cards swept up in the downturn
Chicago Tribune, United States - 16 hours ago
It's now far more difficult for many consumers to find a way out of debt, since other options, such as home equity lines of credit, aren't as readily ...
Bad Credit Repair Counseling Helps istockAnalyst.com
all 12 news articles

Wind Chimes and more...

Windchimes for great gifts!

Bank Like a Banker