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If I Flee China to Escape Debt, Do I Have to Pay it in the United States?



Am I allowed to flee China and go to the USA as a resident? Can I leave China behind to avoid unfair debt? I’m being forced to pay a debt to a company that fired me for unfair reasons that were out of my hands.

—T.G. in China

Howard Dvorkin, CPA answers…

Usually, people flee to the United States to acquire personal freedom, not to shed personal debt. Needless to say, I’m unfamiliar with Chinese debt laws. But as a CPA and financial counselor for nearly three decades, I can say with certainty: When you become a U.S. resident, you’re a new person in the eyes of the three credit bureaus Equifax, Experian, and TransUnion.

In fact, in an article detailing how immigrants can get a credit score, Experian wrote, “Even if you have sparkling credit scores from another country, they won’t count in the United States. Move to the U.S. and you have to start from scratch building out your credit reports.” has addressed this issue twice before, but in those instances, a U.S. citizen and a visiting student asked about leaving this country to avoid student loans. As I wrote then, the federal government is going to track you down overseas. Unlike in criminal cases, the United States doesn’t have extradition treaties with other countries over unpaid personal debt.

That works in reverse, too. Chinese law doesn’t apply here.

Debt collection practices in foreign countries aren’t as forgiving

What I do know about personal debt in China is that it’s a much less forgiving place to fall behind on your bills. The New York Times has reported, “Billboards that publicly name irresponsible debtors are a common sight in some areas” and “Other steps include adding debtors to travel blacklists that keep them from boarding planes and high-speed trains.”

Meanwhile, The Economist has reported on a rise of prosecutions and prison sentences over unpaid debts. (As has detailed before, you can’t be jailed in this country for unpaid debts, as long as you haven’t committed fraud along the way.)

China doesn’t seem to have a Fair Debt Collections Practices Act, either. The FDCPA prevents debt collectors from harassing you, but The Wall Street Journal reported in June just how serious owing money can be in China. The newspaper told the story of a 30-year-old clerk who had been laid off…

A day after she failed to make the minimum payment on a credit card from China CITIC Bank Corp., Ms. Zhou said she received more than 10 phone calls and a text message and they have continued for weeks.

Thankfully, that can’t happen here.

How foreign debt collections could catch up with you

Still, I must warn anyone trying to avoid debt by leaving their homeland: It’s a dicey solution.

For starters, you still owe that money in the country you’re leaving – which means if you ever return, you’ll owe even more, because interest will have accrued.

As we’ve just seen, other countries offer much less protection from debt collectors. I’ve heard stories, although I can’t confirm them, that some countries will charge the family you left behind with the bills you haven’t paid.

Finally, I’ve avoided asking you a question, T.G.: Why do you owe money to your employer who fired you? If you weren’t charged with fraud or theft, I’m curious how that happened.

Regardless, I hope this has been helpful to anyone considering emigration as a debt solution.

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