Heading abroad to escape your debts? Think again

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Heading abroad to escape your debts? Think again

If you don’t want an unwelcome knock on your door, it could pay to heed this advice .

By Alison Steed

Ten:00AM GMT 28 Jan 2016

It might be tempting to flee your unpaid credit card bills, loans and overdue tax. But those who leave the UK thinking they have escaped their debts could be in for a nasty shock if they fail to tell their creditors where they have gone.

Such a stir could put their assets in the UK at risk, cause serious problems with their credit rating if they ever plan to come back home and even result in an unexpected and unwelcome knock on their door abroad.

Debts are dealt with in different ways depending on who the money is owed to. The longest reach emerges to belong to HM Revenue & Customs, which has Mutual Assistance in the Recovery of Debt (MARD) agreements with other nations to recoup money owed.

An HMRC spokesman said: &x201c;We can ask the local tax jurisdiction the debtor has moved to to get UK money back off the debtor. The same applies to tax debtors from other jurisdictions who budge to the UK – we will collect any tax due on behalf of the debtor&x2019;s home tax authority.

&x201c;The debt will remain outstanding until it is paid, and interest and penalties will proceed to accrue. The most significant thing for any debtor who can’t pay is to talk to us as soon as possible. We will do all we can to help, including suggesting time to pay their debts over time.&x201d;

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If the debt is owed to a consumer lender, such as a bank or credit card provider, it can be more complicated for them to go after the debtor overseas to reclaim the money owed, but it is still done.

A spokesman for the StepChange Debt Charity (stepchange.org), said: &x201c;It depends on what the individual has told the creditors before leaving the UK. Are they attempting to avoid the debt? Or are they being upfront and leaving a forwarding address? That is significant, because if someone has just vanished and left no forwarding address, there is nothing to stop [the creditor] beginning a county court judgement (CCJ) at their last known address.

&x201c;If the person still has assets in this country, the creditor could apply for a charging order which would secure the debt against a property in the UK. This can be done in their absence.&x201d;

If the person moving abroad has left a forwarding address, legal activity should only be commenced in the country they are presently living in, the spokesman said. This can prove more difficult for the lender unless the money is owed to an international bank or institution with operations in the fresh country.

Some debt collection agencies also operate in more than one country, so expats should not rule out getting a knock on their door from someone aiming to collect what’s owed.

Student loans are another debt that can go after you abroad, and failing to deal with them decently could result in penalties being incurred. Those who have moved abroad for longer than three months should finish an overseas income assessment form so that the Student Loan Company (SLC) can calculate how much they need to repay, and a payment schedule will be set out accordingly. This is based on the earnings threshold for the destination country.

A spokesman said: &x201c;Failure to keep the SLC up to date will cause the account to be placed in arrears and may incur penalty charges.

&x201c;If a customer fails to contact us and does not provide the necessary information, then the repayment schedule will be set up by SLC, and in most cases these payments will be much higher than expected, approximately dual the average income for the country they are presently residing.

Heading abroad to escape your debts? Think again

If you don’t want an unwelcome knock on your door, it could pay to heed this advice .

By Alison Steed

Ten:00AM GMT 28 Jan 2016

It might be tempting to flee your unpaid credit card bills, loans and overdue tax. But those who leave the UK thinking they have escaped their debts could be in for a nasty shock if they fail to tell their creditors where they have gone.

Such a stir could put their assets in the UK at risk, cause serious problems with their credit rating if they ever plan to come back home and even result in an unexpected and unwelcome knock on their door abroad.

Debts are dealt with in different ways depending on who the money is owed to. The longest reach shows up to belong to HM Revenue & Customs, which has Mutual Assistance in the Recovery of Debt (MARD) agreements with other nations to recoup money owed.

An HMRC spokesman said: &x201c;We can ask the local tax jurisdiction the debtor has moved to to get UK money back off the debtor. The same applies to tax debtors from other jurisdictions who stir to the UK – we will collect any tax due on behalf of the debtor&x2019;s home tax authority.

&x201c;The debt will remain outstanding until it is paid, and interest and penalties will proceed to accrue. The most significant thing for any debtor who can’t pay is to talk to us as soon as possible. We will do all we can to help, including suggesting time to pay their debts over time.&x201d;

Related Articles

If the debt is owed to a consumer lender, such as a bank or credit card provider, it can be more complicated for them to go after the debtor overseas to reclaim the money owed, but it is still done.

A spokesman for the StepChange Debt Charity (stepchange.org), said: &x201c;It depends on what the individual has told the creditors before leaving the UK. Are they attempting to avoid the debt? Or are they being upfront and leaving a forwarding address? That is significant, because if someone has just vanished and left no forwarding address, there is nothing to stop [the creditor] beginning a county court judgement (CCJ) at their last known address.

&x201c;If the person still has assets in this country, the creditor could apply for a charging order which would secure the debt against a property in the UK. This can be done in their absence.&x201d;

If the person moving abroad has left a forwarding address, legal activity should only be embarked in the country they are presently living in, the spokesman said. This can prove more difficult for the lender unless the money is owed to an international bank or institution with operations in the fresh country.

Some debt collection agencies also operate in more than one country, so expats should not rule out getting a knock on their door from someone aiming to collect what’s owed.

Student loans are another debt that can go after you abroad, and failing to deal with them decently could result in penalties being incurred. Those who have moved abroad for longer than three months should finish an overseas income assessment form so that the Student Loan Company (SLC) can calculate how much they need to repay, and a payment schedule will be set out accordingly. This is based on the earnings threshold for the destination country.

A spokesman said: &x201c;Failure to keep the SLC up to date will cause the account to be placed in arrears and may incur penalty charges.

&x201c;If a customer fails to contact us and does not provide the necessary information, then the repayment schedule will be set up by SLC, and in most cases these payments will be much higher than expected, approximately dual the average income for the country they are presently residing.

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