Can I Escape Debt Overseas?

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Jetting off for a new life overseas is a great way to make a fresh start. But that doesn’t mean it wipes the slate clean. If you have built up credit card debt, unpaid taxes, a student loan, or other borrowed and owed money that you have yet to pay, it could follow you to your new home and affect your finances from afar.

Whatever type of debt you have, it is vital that you sort it out before you emigrate, as the consequences for late and missed repayments can be severe. Here is what happens if you leave the country with debt, and what you can do to avoid a nasty surprise in the future.

Key Takeaways

  • Moving overseas doesn’t mean your debt will go away. Inform your bank, other lenders and relevant government departments you owe money to that you will be going abroad so they can adjust your payments accordingly.
  • Debt collectors and creditors have many ways to recover overdue debt from those who emigrate overseas, such as issuing Letters of Demand and outsourcing to international debt collectors.
  • If you have a number of loans, consider consolidating your debt into a single monthly sum so you’ll only have one payment to make.
  • If you want to know more about consolidation loans and other ways to reduce debt, contact Debt Fix to see how we may be able to help manage your debts.

Can I Leave the Country If I Have Debt?

Legally, there is nothing stopping you from leaving the country if you have debt, unless the Australian Taxation Office (ATO) issues a Departure Prohibition Order (DPO) against you.

What is a DPO? The Australian Government states that “A DPO prevents a person who has persistently failed to meet their child support liability commitments, or carer liability commitments, from leaving Australia.” This means that you cannot leave the country until you pay off your tax debt in full or reach a settlement agreement with the ATO.

Since DPOs impose very serious limits on a person’s liberty and freedom of movement, they are used rarely in Australia, and the law has very strict requirements on when the ATO can issue a DPO.

If you plan to travel abroad, inform your bank, lenders, and relevant government departments that you owe money to. They may be able to adjust your payments accordingly. Also, informing the bank will stop them from accidentally cancelling your cards due to, what they may deem as, “suspicious activity” from overseas transactions.

What Happens to My Debt If I Move Abroad?

If you move overseas without managing your debts first, problems can arise. Your creditor or collector may explore other avenues to recover your unpaid debt.

But how far will they really go? That depends on the type of debt you have, how much money you owe, and the relationship between the two countries you are emigrating from and to. Here is what you need to know about the following types of debt:


As of 1 July 2017, anyone living overseas and earning more than the minimum repayment threshold must make loan repayments on their HELP-HECS debt.

To do this, you must calculate your income for the financial year and report it to the ATO by October 31. All amounts must be converted to Australian dollars based on the annual exchange rate for the financial year.

Also, if you plan to move overseas for 183 days or more (over 6 months) in a 12-month period, you must notify the ATO by completing an overseas travel notification through the ATO online services.

Credit Card and Tax Debt

If you move overseas with outstanding credit card or tax debt, your creditors and collectors are entitled to try to recover it.

Just like they would if you were still in Australia, collectors may contact you via phone, email, and Letters of Demand.. Failing this, collectors may reach out to their carefully selected network of global partners, and then outsource the task to an international debt collector in your new residence.

Debt collectors may also start court proceedings against you. If they can successfully prove that the debt was made in Australia and is still legally binding, in some circumstances they may obtain a foreign judgement against you.

Can Australian Debt Collectors Follow You Overseas?

Technically speaking, Australian debt collectors cannot literally follow you overseas. But as you just learnt, they have many options. They may try to contact you personally, outsource the job to an international debt collector, or seek help from local and foreign governments.

For this reason, it is vital that you figure out how to manage your outstanding debts – before you move overseas. In most cases, you can still meet your debt repayment obligations through online payment portals. You just need a reliable internet connection and internet-enabled desktop workstation, laptop, or mobile device.

How to Settle Your Debt Before You Travel or Move Overseas

Talk to your creditors, lenders, and collectors about how you can pay off your debt(s) before you travel or move overseas. This will significantly reduce the risk of the other parties taking legal or financial action against you, while giving you the assurance that you will be financially secure abroad.

By negotiating with your lender(s), they may agree to lower the total amount of interest on your debt, reduce or even remove the associated fees related to your debt (i.e. late fees, account management fees), or even establish a more flexible repayment plan that suits your unique circumstances.

You may also be able to consolidate your debts into a single monthly repayment. This means you only manage one single payment each month, not juggle multiple debts and repayment schedules. This way, you’ll have an easier time repaying your debts, and if your circumstances change you will have room to negotiate a new repayment plan.

To learn more about our debt consolidation services and other debt help options, talk to a Debt Fix consultant today. Your first consult is obligation free, confidential, and will not impact your credit score. Call 1300 332 834 or enquire online to get started.