A question our Licensed Insolvency Trustees frequently get asked by Canadians calling or emailing us from abroad is “what might happen if I owe money to a bank, credit card company, back taxes or student loans and return to Canada from travelling internationally. Will I get stopped and detained?”
The image many have is of a Border Patrol Officer detaining them upon re-entry to the country because of debts owing.
While we are not lawyers, we can state with confidence it is unlikely someone would be detained by a Border Agent upon their return to Canada if any type of consumer debt (such as student loans, income taxes or credit cards) is outstanding.
Canada Border Services agents have, as their primary focus, the safety of Canadian citizens. They are expertly trained to help prevent crimes such as human trafficking, the smuggling of goods and services, and other cross-border illegal activities. Money owed to the Canada Revenue Agency (the CRA), outstanding student loans or credit card and loan amounts owing to any company are not illegal but, rather, a civil matter. Unless a court order has been issued by a Canadian court to have someone detained when they re-enter the country, that person cannot be held at the border when attempting to return to Canada.
There are some known exceptions to this rule: Individuals with outstanding child support, spousal support or criminal fines or warrants can be detained at the Canadian border once identified by Border Patrol Officers. These individuals are the exception, however, and not the rule. Their situations are far more serious than that of someone who owes money to several credit card companies or for outstanding student loans. It is also quite likely they were made aware (in advance) of the possibility of detainment if they attempted to return to Canada.
If you have resided outside Canada for at least a year but owe money to a Canadian bank or another company more than $1,000, you have the legal right to file for protection from the companies you owe money to once you physically return to the country.
So, while there should be no fear of being arrested or detained when attempting to cross back into Canada, it is always a great idea to reduce worry and ensure all outstanding amounts owing to a Canadian bank or other company are dealt with once back.
Are you concerned about the debts you’ve incurred back in Canada and are thinking of returning soon? Click the FREE CONSULTATION button below or give us a call so we can discuss your options with you today.
FAQs
When it comes to the question, “If I Owe Money And Return To Canada, Can I Be Arrested At The Border?”, the answer is a resounding no. Debts are a civil matter and do not warrant detention at the border. However, it's always wise to address your financial obligations promptly upon your return.
Can you be arrested at the border if you owe money and return to Canada? ›
Unless a court order has been issued by a Canadian court to have someone detained when they re-enter the country, that person cannot be held at the border when attempting to return to Canada.
Can you be stopped at the airport for debt in Canada? ›
CBSA will typically not detain you at the border if you re-enter Canada, and you haven't paid off any debts that you owe. In Canada, outstanding debts to creditors such as banks and other financial institutions are a civil matter.
Can you leave Canada if you owe money? ›
You still have an obligation to clear your debts
Your creditors may continue to pursue you for payment if you moved out of Canada and ceased paying your Canadian creditors, and you have not filed for bankruptcy or a consumer proposal. Creditors can attempt to obtain a judgement against you.
Can US creditors follow you to Canada? ›
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.
Can you go to jail for owing money in Canada? ›
Can you go to jail for not paying student loans? No, you won't be arrested or go to jail for not paying your student loans. No, you won't be arrested or go to jail for not paying your credit card debt. In Canada, not paying your creditors is not cause for arrest or imprisonment.
What happens if you owe money and leave the country? ›
Your debts don't disappear and you still have an obligation to repay them. However, if your move abroad is genuine, just make sure to be communicative with your credit card issuer and/or debt collectors.
How long until debt is forgiven in Canada? ›
6 years, except when: provincial legislation (a judgement) overrides the original limitation (may vary from 10 years to unlimited) the loan was established or expired before August 1, 2003 (no limitation period)
What happens if you don t pay your debt and leave the country? ›
Summary: It is not a good idea to leave the country with unpaid credit card debt. While debt technically won't follow you abroad, you may suffer several consequences for trying to flee from it: you may be sued and have your wages garnished; your credit score will suffer; you may have to pay taxes on your debt.
What happens after 7 years of not paying debt? ›
The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.
By law, the IRS will certify taxpayers with seriously delinquent tax debts to the State Department for specific actions regarding their passports. Generally, the State Department will not issue passports to taxpayers after receiving their delinquent debt certification from the IRS.
What happens if you owe back taxes in Canada? ›
If you don't pay, the CRA can take steps to recover the amount you owe. For example, we can withhold your benefit and credit payments or tax refunds, and apply them to your outstanding debt. Acting quickly will help you avoid other financial or legal consequences.
Does debt expire in Canada? ›
How long can debt collectors try to collect in Canada? Canadian federal law states that you can no longer be taken to court over a debt if it has been six years or longer since you made a payment or otherwise acknowledged the debt. Some provinces in Canada have shorter timeframes.
Does Canada check US credit score? ›
Canadian lenders will not have access to your US credit score, and it will not factor into their decision to approve your credit application in Canada.
What happens to unpaid credit card debt after 7 years in Canada? ›
The myth comes from the fact that most negative information will leave your credit report within seven years of an incident. In reality, a missed payment on your debt will only take six years to disappear from your credit report, but this has no effect on whether you still need to pay.
Can I move to Canada if I have debt? ›
There's no law saying you can't move to another country if you have debt—even if it's in collections. But if you've taken on debt in the U.S., you're contractually obligated to pay it, regardless of where you choose to live. Living abroad can make it more difficult for creditors to find you and collect on your debt.
Can you get deported for owing money? ›
“Even when legal action is taken on debt, it is a civil matter, not a criminal matter. Lenders can sue you to recoup the monies owed for debt, but deportation is not a consequence of unpaid debt.” There are two exceptions to this rule: Debt accrued through unpaid taxes.
Can you be detained at the border? ›
These individuals are required to provide information about their immigration status if asked. Generally, a Border Patrol agent cannot detain you unless they have “reasonable suspicion” that you are committing or committed a violation of immigration law or federal law.
Can you travel if you have debt? ›
If money is tight, consider whether focusing only on debt makes more sense. “If you are not able to make your payments — and like not even the minimum payments — and you're running in the negative every month, then you probably shouldn't be traveling,” says Grant. “Or if you do, something that's super low cost.”
Can Border Patrol seize your money? ›
If you travel internationally, you must report it if you have more than $10,000. But if you are suspicious and are traveling with cash you cannot adequately explain, or which sounds suspicious, Homeland Security Investigation (HSI) and Customs can seize it.
