Leaving Canada with Unpaid Debt: What You Need to Know

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.