I have an unpaid bank loan in Kuwait I have been paying it the last year or so but when I became unemployed I missed a few payments. At first the bank emailed me of my missed payments then just last month they emailed me that they will file a case against me. I emailed them saying that I am currently unemployed but they told me that I need to pay the whole amount which includes interests from the non payments. The total amount is now 7300 Kuwaiti dinars roughly around 24-25 thousand USD I am worried that this might be the reason that the Canadian immigration will reject my application for citizenship.
As a permanent resident of Canada the laws that govern the collection of a debt fall under the provincial legislation in place for the province in which a person resides. The bank in Kuwait will need to adhere to the provincial legislation and regulations in effect and cannot file a case against you person in our court system without first legally proving their debt in Kuwait and then hiring a law firm in Canada to prove that the debt is valid and then obtaining a judgment against you. While it appears that the debt is valid, the bank will incur significant costs to prove their claim in Canada and would not have any means in which to recover the debt since you are currently unemployed.
The bank cannot put a note on your credit file here in Canada. They could engage the services of a licensed collection agency in Canada to contact you with respect to this debt and the agency could list the debt as a collection on your credit file but without any means to repay the obligation, all that you would be required to do would be to provide them with proof of your current situation.
The collection agency could not initiate legal action on behalf of the bank in Kuwait as the debt still needs to be legally proved in Kuwait and subsequently in a court of Law in Canada. If the bank or a collection agency was to threaten or harass you, you have the right to file a formal complaint against the bank and/or agency with the respective provincial consumer protection agency for the province in which you reside. The bank and/or collection agency does not have the legal authority to file a notice of the debt with the Immigration Department of Canada. If they state they intend to do so, I would encourage you to immediately file a complaint against them.
We are also not aware of anyone having their citizenship jeopardized because they have an outstanding debt. If a person was to file for bankruptcy prior to applying for citizenship, it may or may not impact the application. Our recommendation would be for people to maintain communication with the bank by secure email or fax and update them as to their current situation on a monthly basis and outline that until they regain employment they are not in a position to repay the debt. You may wish to obtain further information and guidance from an accredited not-for-profit credit counselling agency in Canada if you are unsure how to proceed.
I hope this helps,
President & CEO
Credit Counselling Society