Financial Debts Outside of Canada
When I moved to Canada, I had debts that I left behind. What can they do to me? From a legal standpoint, the creditors could hire a Canadian lawyer or paralegal to sue you. Once the creditor from outside Canada gets a judgement against you, they have the same rights and limitations that a Canadian creditor has. In other words, they can garnish your wages or bank account, seize assets that are not protected by Provincial or Federal legislation, etc.
Fortunately for you, the debtor, there are practical and financial considerations for the foreign creditor. When the lawyer or paralegal is contacted by the foreign creditor to sue you, they will normally ask for all of their fees and projected disbursements (court fees, process server, internal costs, etc.) to be paid by way of a full retainer. The concern of the lawyer/paralegal is that if he/she is not successful in recovering money from you, he does not want to be in the position of having to sue his own client (who is in a foreign country) for his fees and disbursements.
The creditor also has a potential issue in deciding whether or not to sue you – what if you dispute the debt and issue goes to trial – the foreign creditor may be required to come to the trial to give evidence. This travel cost is spent before the foreign creditor has a judgement against you. All of this means that foreign creditors are very reluctant to sue a debtor in another country unless the debt is substantial and if the lawsuit is successful, there is a reasonable chance of collecting the debt.
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