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Leaving the Country with Unpaid Credit Card Debt in the Philippines: What You Need to Know

Wed, 11/13/2024

Let’s be honest—personal loans and credit card debt are a part of life for many in the Philippines and while credit can be a lifesaver when we need it, sometimes things get out of hand. In those moments of financial stress, leaving the country with unpaid credit card debt might start to sound like the only option, especially when you’ve had your trips planned ahead. But before you pack your bags and hit the airport, there are some things you really need to consider. Spoiler alert: your debt won’t disappear just because you do. 

Let's break down reasons why some people think about skipping town on their debts, what the real consequences are (yup, they’re more than you think), and what you can do instead to handle unpaid credit card debt the right way. 

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Common Reasons Why People Consider Leaving the Country with Unpaid Debts 

Why would someone think about leaving the country with unpaid credit card debt? One common reason is the hope of finding a better-paying job abroad to start fresh, leaving behind their financial problems. Some might even think they can simply avoid the aggressive collection efforts or the rising penalties and interest rates.

Then there’s the myth that unpaid credit card debt in the Philippines doesn’t lead to any legal consequences. Unfortunately, that’s not entirely true. While you won’t be thrown behind bars for unpaid credit card debt, creditors can still take legal action to get their money back. And that’s a whole other headache you don’t want to deal with. 

  1. Is Unpaid Credit Card Debt a Crime?

    Let’s clear this up: no, you won’t go to jail for unpaid credit card debt in the Philippines. Credit card debt is considered a civil matter, not a criminal one. But you’re still legally obligated to pay what you owe. And just because you’re no longer in the Philippines doesn’t mean your debts stay behind. 

  2. What Happens if You Leave with Unpaid Credit Card Debt?

    Leaving the Philippines with unpaid credit card debt can put you in a tough spot. Creditors can and usually will take legal action to recover what’s owed to them. This could result in a court ruling that impacts any assets or income you have left in the country. Even worse, your debt will continue to grow due to interest, fees, and penalties while you’re abroad. 

  3. Absolutely! Creditors can file lawsuits against you to recover unpaid debt, and while enforcing those actions when you’re outside the Philippines might be tricky, it’s not impossible. Depending on the circumstances, you could face challenges with assets or wages being garnished. Plus, there’s always the risk of legal judgments piling up and affecting you down the line.

  4. What About Future Travel Plans?

    While the Bureau of Immigration won’t stop you from leaving the country just because you owe money, future re-entry could be a different story. If a creditor takes you to court and wins, you might face a hold-departure order or even be blacklisted in the future. Long story short: unresolved debt could mess up your plans to come back home, especially if legal action has been taken. 

Financial implications

  1. What Happens to Your Credit Score?

    Think your credit score stays the same just because you left the country? Think again. Unpaid debt will likely tank your credit score, making it harder to borrow money in the future, whether you’re in the Philippines or abroad. Lenders everywhere can see your credit history, and if it’s filled with unpaid debt, don’t be surprised when you struggle to secure loans or credit cards later on.

    No credit history? Start building your credit score with Tonik here.

  2.  Will My Debt Keep Growing?

    Sadly, yes. If you leave the country with unpaid credit card debt, it doesn’t just sit there and wait for you to come back. Interest, late fees, and penalties will keep stacking up. What started as a manageable balance can quickly spiral into something much worse—and fast.

  3. Totally. If a creditor takes you to court and wins, you could end up facing wage garnishment or asset seizure, which only makes your financial situation worse. And don’t forget about the additional court fees or legal expenses that could pile up on top of everything else. 

Moral and Ethical Considerations

  1. Is It Ethical to Leave Debts Unpaid?

    Leaving the country with unpaid debt raises some serious ethical questions. Sure, it might feel like an easy way out, but failing to pay back what you owe can hurt your personal integrity. If you have the means to work out a solution, skipping out on your debts could lead to feelings of guilt and regret down the line.

  2. Will There Be Social Stigma?

    Unpaid credit card debt can also create social stigma. People talk, and your financial situation could become public knowledge, straining relationships with family and friends. Leaving debts behind might seem like an escape at first, but it could harm your reputation more than you think. 

How to Deal with Personal Loans and Credit Card Debt Before Leaving

  1. Smart Strategies to Tackle Credit Card Debt

    Before you even think about leaving the country, consider some strategies to get your debt under control. Debt consolidation is a great option—it allows you to combine all your debts into one manageable payment with a lower interest rate. This makes keeping up with payments a lot easier.

  2. Talk to Your Creditors

    It might sound scary, but creditors are often willing to negotiate, especially if they see you’re trying to pay off what you owe. You can ask for a reduced settlement or work out a payment plan that fits your budget. This will help prevent legal action and get your finances back on track.

    At Tonik Bank, our Collections Team’s lines are always open. Learn more about our loan repayment process here

  3. Seek Professional Advice

    Before making any major decisions, it’s a good idea to talk to a financial advisor or legal expert. They can give you advice on your options, help you understand the consequences of leaving unpaid debts, and even guide you toward a solution. 

Alternatives to Leaving with Unpaid Debt

  1. Explore Debt Relief in the Philippines

    If you’re feeling overwhelmed by your debt, look into debt relief options available in the Philippines. Programs like debt restructuring or financial counseling can offer the help you need without you having to leave the country.

  2. Clear Your Debts Before Emigrating

    Clearing your debts before you leave the Philippines is the best way to avoid future problems. By paying off what you owe, you’ll protect your credit score, avoid legal issues, and set yourself up for financial success in your new life abroad. 

Our Word of Advice

Leaving the country with unpaid credit card debt in the Philippines might seem like a quick fix, but the consequences can follow you for years. Instead of running away from your financial obligations, face them head-on. With smart strategies, negotiation, and the right support, you can manage your debt responsibly and avoid the legal, financial, and ethical headaches that come with leaving unpaid credit card debt behind.

 

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