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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It depends on where you go and if you’re considered to have committed a crime. Also depends on how openly you live and if you’re findable. Most of the time owing someone money is civil, but if you take a huge loan and split, you’ll probably be accused of some sort of fraud in connection with getting the loan.
Countries will work with other countries to send people back for criminal trial thru a process called extradition but it’s fairly hard and lengthy. And dealing with multiple legal systems in order to sue someone in another country is expensive.
What’s most likely to happen is they you’ll be sued in the country you received the loan and get a default judgment against you. Debt eventually becomes too old to be legally collectible but a judgment doesn’t. They would then seize anything you left in the country. Eventually if you received an inheritance in that country it would be subject to their judgment also.
Basically, this can work if you have nothing left in that country, never plan to return, and can disappear into your new country. But it’s a bad idea for just about everyone. You can never know how much time, money, and effort they’ll put into catching you.
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