Filing for bankrupcy abroad, or alternatives?
April 13th, 2016 by Questions
I have been living abroad for 2 years and no longer can make payments to any debts I have. I have a credit card that has gone to collections and have been told I have 2 weeks to come up with the total debt balance in which I cannot come up with the money. I am wondering what my options are in order to clear this debt. I am not sure if I could even file for bankrupcy since I have been living abroad for over 12 months and don’t own any assets in or outside of the country. Are there any other options for me? Would it be possible to consolidate my debt?
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April 13, 2016 at 12:22 pm, Doug Stuive, CA | Trustee | CIRP said:
Under the Bankruptcy Act you can file for bankruptcy or a consumer proposal when you are living abroad but do have to meet certain criteria in order to file. The fact that you do not have assets or accounts in Canada, other than the credit card, means that you will probably not qualify for those options unless you were to return to Canada for the long term. I would encourage you to reach out to a trustee to discuss your situation in more detail though, to make sure that is the case.
If you cannot access the options under the Bankruptcy Act, then you have a few choices. You can work on building a credit history in the country in which you currently reside. You may be able to negotiate with the collection agency that holds the debt in order to reduce the overall debt to an acceptable settlement amount. If you are able to build a credit history you can then obtain a loan to pay out the credit card at the negotiated settlement amount. You can then pay out the loan that you obtained, hopefully with a reasonable interest rate and payment term.
You can also choose to do nothing at this time depending on the likelihood of returning to Canada. It is true that if you return to Canada this debt will more than likely need to be dealt with in some capacity. However it is highly unlikely this creditor can initiate legal action against your wages when you are living abroad. Of course if you have a Canadian employer that would not be the case.