Does US Debt Follow You To Canada?

Moving to a new country is a significant decision, often accompanied by questions and concerns. One such concern is whether your US debt will follow you to Canada. This article will delve into this topic, offering a comprehensive analysis.

1. Cross-Border Financial Obligations

Let’s begin by understanding the concept of cross-border financial obligations. Many people, especially those living in border towns or those who have attended school or worked in the US, may have accrued debt.

1.1. The Debt Trail

The question that arises is, Does US debt follow you to Canada? The short answer is no, your credit history usually doesn’t automatically transfer when you move countries. However, if you have income or assets in the US, the collection process for your debt may commence there.

2. Pursuing Debt Across Borders

The process of collecting debt across international borders is not straightforward.

2.1. Collection Calls and Legal Action

If you default on an American debt while residing in Canada, the initial step your US creditor will likely take is to begin collection calls. However, pursuing legal action against you across the border can be costly for them.

2.2. Legal Hurdles in Cross-Border Debt Collection

To legally collect debt from you in Canada, your American creditor would need to obtain a judgement in the US and then take that judgement to a Canadian court. This process is time-consuming and expensive, making it unlikely for creditors to pursue smaller debts.

3. Bankruptcy Across Borders

Understanding how bankruptcy works when moving from the US to Canada is crucial.

3.1. Filing for Bankruptcy

In Canada, a Licensed Insolvency Trustee can only file bankruptcy or a consumer proposal in Canada. Similarly, a US bankruptcy lawyer can only file bankruptcy in a US court.

3.2. Including US Debts in Canadian Bankruptcy

If you have significant debt in the US and are moving to Canada, it may be beneficial to include your US debts in a Canadian bankruptcy or consumer proposal.

3.3. Protection from Creditors

Filing for bankruptcy in Canada provides you with a stay of proceedings, which protects you from creditors in both Canada and the US. However, if you have income or assets in the US, your American creditors can still pursue you there.

4. Credit History and Moving Countries

When you move to Canada, your US credit history doesn’t automatically transfer.

4.1. Separate Credit Systems

Both countries have separate credit reporting systems with their own rules. This means that credit information isn’t shared across the border.

4.2. Creating a Credit History in Canada

As a result, you’ll need to create a new credit history in Canada aligned with Canadian credit bureaus. If you have a good credit score in the US, it could be beneficial to create a copy of your US credit reports to show to potential Canadian lenders.

5. Establishing Credit in Canada

Moving to Canada without a credit history means you’ll need to start from scratch.

5.1. Transferring US Bank Accounts to Canada

If your US bank operates in Canada and you have a good credit history, they may be able to transfer your account.

5.2. Secured Credit Cards

Secured credit cards can be a good option for you if you’re finding it hard to get approved for a regular credit card.

5.3. Co-signing and Authorized Users

Having a family member or loved one co-sign your account, or becoming an authorized user on their credit account, can also help you establish credit history in Canada.

6. Getting Help with Debt

Dealing with cross-border debt can be complicated, and it’s important to get the right help.

6.1. Licensed Insolvency Trustees

Licensed Insolvency Trustees in Canada can help you navigate the intricacies of dealing with US debt.

6.2. Free Consultations

Many Licensed Insolvency Trustees offer free consultations. This can help you gain an understanding of your options.


In conclusion, while US debt doesn’t automatically follow you to Canada, there are scenarios where you could still be pursued for repayment. Understanding your financial obligations before moving can save you a lot of stress. If you’re unsure, consider consulting with a financial advisor or Licensed Insolvency Trustee.

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