For those looking to start a fresh chapter overseas, the question of Moving Abroad Before Bankruptcy Discharge could be a significant concern. This comprehensive guide will delve deep into the various aspects of this complex subject, providing you with the vital information you need.
1. Understanding Debt Follow-up in Foreign Countries
Debt does not act as a barrier to moving overseas. Despite your geographical location, your Canadian debt remains due, and you must keep up with the required payments. While living abroad may complicate debt collection for your creditors, it does not absolve you of your responsibility to repay your debts. If you fail to meet your financial obligations while overseas, on your return to Canada, you might find it challenging to open new bank accounts or secure credit. Creditors also have the right to sue you to recover the debt you owe.
2. Implications of Bankruptcy when Relocating
Bankruptcy is a legal process for individuals or businesses unable to repay their outstanding debts. If you’re bankrupt, you can still move to another country. However, the timing of your bankruptcy filing could impact your experience.
2.1 Filing for Bankruptcy Before Relocating
There are no legal impediments to moving to another country after filing for bankruptcy in your home country. Nevertheless, you are still expected to fulfill your bankruptcy-related responsibilities. These duties include attending financial counselling sessions, answering inquiries, making necessary payments, and regularly reporting your income and expenses.
2.2 Filing for Bankruptcy While Living Overseas
Even if you’re living abroad, you can still file for bankruptcy in your home country. You’re still expected to fulfill all your bankruptcy-related duties, just as you would if you were living in your home country.
3. Effects of Relocating on a Consumer Proposal
A consumer proposal is an alternative to bankruptcy. If your consumer proposal is approved, you pay a reduced, agreed-upon portion of your debts over a specified time (not exceeding five years). Even if you file a consumer proposal, you can still move to another country. However, you’ll be required to fulfill your statutory duties, as outlined by your Licensed Insolvency Trustee (LIT).
4. Legal Actions from Creditors After Moving
If you’ve relocated and stopped paying your Canadian creditors without filing for bankruptcy or a proposal, your creditors can still take collection actions against you. This can include suing you and obtaining a judgment to collect their debts. If the judgment is not promptly paid or if you fail to make arrangements to pay the debt, it may be recorded on your Canadian credit report.
5. Important Considerations When Moving Abroad
5.1 Your Canadian Credit Report and Credit Score Will Not Follow You
If you move from Canada, your Canadian credit report and credit score will not follow you. You’ll have to build a new credit history in your new country of residence.
5.2 Understanding the Statute of Limitations
The Ontario statute of limitations describes the time frame within which a creditor can initiate a lawsuit to collect its debt. The time frame is determined by the type of debt owed. Many debts, like income tax debts and student loans, are not subject to the statute of limitations.
6. Concluding Thoughts
The decision of Moving Abroad Before Bankruptcy Discharge doesn’t prohibit you from filing for bankruptcy or a proposal in Canada. You can file for either before or after moving, as long as you meet the filing criteria and are prepared to comply with your statutory duties. If your debt feels overwhelming, reach out to a professional such as Bankruptcy Canada, Consumer Proposal Administrators, Licensed Credit Counsellors, and Insolvency Trustees for assistance.