I emigrate, what happens to my unsecured debt?

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You can emigrate and not pay your short term / unsecured debt. When you emigrate, the country you are emigrating to will not do a credit check on the country of which you were originally a citizen and will not check whether you have paid off your debt.

However, as a citizen of a country, there is a moral and ethical obligation on yourself to do what is right and pay off your debt. You don’t want to reap what you haven’t sown.

Here is an example scenario to help you with your question:

A couple left South Africa to live in London and acquired citizenship after the prescribed period for living there on an ancestral visa. They walked away with debts, taxes owed to Sars, and credit card debts with the bank they banked with. In addition, they benefited from retirement pensions (RA) which they made available; they were under 55 and therefore could not “retire” from their RA. The proceeds of an RA can be paid to the member upon official proof of emigration. When the couple acquired citizenship, they asked for their released RAs to be paid to them.

In order to be paid for the product of his RA, the customer had to provide various documents, including a tax certificate. The bank he was dealing with prior to his departure demanded the settlement of an overdue credit card with interest and attorney fees for debt collection. The customer’s bank, after all overdrafts / credit cards had been settled, asked the Reserve Bank to open a blocked account. A blocked account is required to pay amounts owed by banks, insurance companies, savings accounts, etc. and then to facilitate payment to the emigrant.

In addition, when he requested a tax certificate, his income tax returns had not been filed since the couple left SA, and he had to appoint an accountant to settle his tax, and pay the tax due. Sars plus penalties, in order to acquire a tax certificate.

Finally, many people are leaving South Africa and leaving their parents behind.

In this case, parents could pass on and leave an inheritance to their children who now live abroad and who have not “officially” immigrated. This will indeed create a scenario in which the children will have to return to South Africa and open bank accounts to receive the inheritance. Think of the Fica here, an unpaid debt, potentially blacklisted, or forced to officially immigrate: all of this will cause a delay in the liquidation of the estate.

In conclusion, you don’t have to settle your unsecured debt in the short term, but that would be unethical and morally wrong. If you leave the SA with investments that you can only transfer when you emigrate, any outstanding debt / taxes etc will appear at some point during this process.


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