More specifically, when someone takes out the highest loan amount from the bank that they can & then flees the country in order to not pay it back, what exactly happens in such cases?
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What “exactly” happens depends on the specific details in the case. What, in general, would happen is:
– Your credit score in the country of your origin will tank.
– The bank will file a suit that will be held in your absence and that they will likely win.
– The bank may be permitted to seize any assets you have in your country of origin. If you continue to work for a company from that country, your wages may be garnished.
– If the debt owed is large enough, they may pursue a case against you in the country that you fled to.
Depends on where the person flees to.
Assuming the person flees to a country that wont work with local law enforcement the only thing possible is seizure of all remaining assets in the country and arrest upon reentry.
This is one of the reasons why banks wont give high amounts of loans to people without assets that can be liquidated in such a case.
Depends on how much the loan and what collateral was offered. High dollar loans would likely result in some sort of court action to seize the collateral underwritten in the loan, or go after whatever assets remain in the country. (House, other properties, bank accounts, retirement accounts, etc)
Banks don’t readily give large personal loans, especially out of size to net worth. Credit cards have punitive terms (and limits) for using them for cash and banks want collateral for direct loans.
So when the loan isn’t paid, the home country collateral will be seized. Sure, one can think about ways to sell or move that too, but this starts to become criminal fraud fast and now you’re an oversees fugitive, not just a loan deadbeat.
Credit cards always have a “take the money / stuff / trip & run” risk, which is why the interest rate is so high.
I have heard/knew of people that did this. Someone even did it to the IRS (1m+ taxes). Nothing gonna happen to you other than your assets being taken away.
The guy in case of the IRS is facing time due to promising them he’s gonna pay before escaping. Otherwise the others whom did $100k+ ended up cashing out and buying houses. Some even waited 10 years before returning and doing the whole thing again.
They’re in deep trouble. Authorities can track them down, seize assets, and even issue arrest warrants.
Every few years I take out a few credit cards for a couple thousand bucks, max them out and then ignore all unrecognized phone numbers. The debts get passed between collection agencies and after a few years they fall off my credit report entirely, my credit score goes back up, and I repeat the process. No fleeing the country or bankruptcy filing necessary, but this is just small time credit card debt of course.
A mate of mine (from Europe) moved to Canada for a year, racked up $10k in debt and then left.
He says he just won’t ever go back.
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Absconding is a crime. Adding fraud to this for a large amount makes this felonious. You’d be extradited from the country you fled to, unless you fled to a non extradition country.
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