If you are very worried about your debts, you may be wondering how easy it would be to disappear and leave them all behind.
Will your old records be linked with new ones on your credit records? Can your creditors find you if move, go abroad, change your name? This is an increasingly common problem with many EU citizens thinking of leaving because of Brexit.
Some of these sorts of ideas aren’t very sensible – and there may be much better options! But let’s see what the problems are.
“I could move and not tell my creditors”
You could try to live “under the radar” of the credit reference agencies by not opening a new bank account or taking out any credit, including mobile contracts or paying for your car insurance in monthly installments. This is becoming harder to do:
- more types of payments are being included in credit records. It’s now quite common for utility bills to be included. Experian is expanding their system to record rents – this is starting with some council and housing associations but it may later apply to some private renting;
- you may find it hard to rent anywhere privately if you don’t appear to have a credit record;
- to get any form of benefits, you are likely to need an account they can be paid into and it can be tricky to open any account without proof of identity and address;
- if you change jobs, employers often need to see identity documentation. If you want to be paid cash in hand by an employer who doesn’t make identity checks, you may well end up being paid less than the minimum wage, not getting proper holiday or sick pay etc – you are setting yourself up to be exploited.
The other option is to live a more normal life, acquiring a new credit record at your new address and hope that the credit reference agency systems never manage to link up your old record with your new one. This isn’t very likely to work. It’s common for people to think they have got away with it because they haven’t heard anything for years, only to get a letter from a debt collection agency just before the six year limit is reached.
“If it’s over six years, am I safe?”
If it is more than six years since you made a payment to a debt and you haven’t acknowledged it in writing, it is possible the debt is statute-barred, in which case you will be “safe” as although the debt still exists, the creditor can’t enforce it in court. Read Common questions about Statute-Barred Debt for more details about this as it is more compliacted than just not having paid anything for 6 years.
However if your creditor has already gone to court for a CCJ, then the debt will not become statute-barred. To find out if you have a CCJs without looking at your credit record you can use the Trust Online system.
One of the problems about trying to hide from your creditors is that a creditor may get a CCJ (or even make you bankrupt!) and you don’t realise. You can get a CCJ deleted (the legal term is “set aside”) because you didn’t receive the court papers, that can be fine – this works fine if you were away for a few weeks or ill in hospital say. But not getting the papers because you never gave the creditor your new address is not a good reason to have the CCJ set aside.
“Would it help to change my name?”
You can call yourself anything you want in Britain, but if you want your name changed on your passport or driving license then you usually need to use a deed poll. Banks normally require some official document such a marriage license or a deed poll.
Changing your name does not mean that you can ignore debts taken out in your previous name – they are still “yours” no matter what you call yourself.
One of the main purposes of credit reference agencies is to check credit applications for fraud. Credit Reference Agencies have access to a wide variety of information. GAIN is a database of information about debtors who appear to have “gone away” without informing creditors of their new address. With so much detailed data, it is becoming easier to “find” people, even if they have changed their name.
If you see adverts for an e-book that explains how to set up a brand new credit identity, unlinked to your old one, don’t waste your money on it! The only person that will be smiling at the end is the author who is pocketing your money.
The better alternatives if you are in Britain
Trying to hide won’t be easy and may not work. The world is becoming increasingly connected – across borders and across different areas of life in Britain (employment, housing, finances). This is making it is much harder to run away from your debts.
If you are discovered after a few years, you then have to face up to the debt situation, interest may have been added and your credit record will probably have got worse. This will have delayed the end point at which you are actually debt-free and may have removed some of your “easier” options.
Find out what your alternatives are at the moment by reading What is my best debt solution? Even if your debts are completely unmanageable and you can’t make any payments to them, a Debt Relief Order or bankruptcy could give you a clean start. You can also talk in confidence to good debt advisers.
“Will my creditors find me abroad?”
Leaving the country does make it harder to be traced. And in 2019 credit reference agencies in different countries don’t share data:
- a bad credit rating here, even bankruptcy, doesn’t normally show up on credit records outside the UK;
- new credit records you establish outside the UK won’t be linked back to your old debts.
This may change in the future. Linking systems across borders will probably become easier; the biggest obstacle may be dealing with different countries information-sharing legislation.
A creditor you owe a lot of money to however may be able to trace which country you have gone to and use a local investigator to find you there. This is obviously more likely to happen for a £30,000 mortgage shortfall than a £300 catalogue debt.
Tackle problems before you leave the UK?
There are two good reasons to try to resolve your debts before leaving the country:
- in many countries it is surprisingly difficult to open new bank accounts and get a credit card if you are not a national of that country. The easiest way may be to go to a sister bank of a bank you use in the UK, rather than try for a “clean break”.
- the option of going bankrupt in England only applies for a short while after you emigrate – three months if you are going to an EU country and three years to a non-EU country. It is not yet clear how Brexit may affect this if you are going to an EU country.
But if you don’t know what you will be earning or what your expenses will be, it is hard to make payment arrangements in advance that you know you can afford.
Are you going home and will never return to Britain?
If you may return to Britain after a few years, ignore your debts while you abroad may mean you come back to a much more difficult situation.
But if you aren’t British and can’t see why you even return to Britain, then you may not care at all about your British debts and credit record unless you can be traced abroad and your creditors can take effective action against you if they do find you. But a lot depends on whether you will be well paid and have assets when you are back home.
Getting debt advice from abroad
If you have already left Britain, National Debtline has a factsheet on debt options if you live abroad. They also have a telephone number you can use from outside the UK: 0044 121 410 6200.