Brexit is looming which is forcing thousands of older UK residents to hurriedly gather their belongings and move to sunny Spain. However, the average UK household has the equivalent of more than €9,000 of debt and, no matter how hard you try, it can’t be left at the airport when you depart Blighty. Therefore, if you’re one of the 41% of retired British expats currently living in Spain and have debt back in the UK to tackle, here’s how you can do it while enjoying your time in the Spanish Costas.

Make arrangements to pay back what you owe

As an expat it’s not possible to hide from your debt. UK creditors and their EU counterparts have agreements in place which mean they will track you down and demand repayment. In order to recover what they’re owed, creditors have the authority to seek an European Enforcement Order (EEO) which gives them the power to enforce foreign judgements in Spain and any other European Union country.

Therefore, be sure to make contact with the British companies you owe cash to, provide them with your updated contact details and propose how you will pay your debt back. According to Numbeo, the cost of living in Spain is 28.3% cheaper than living in the UK, so ensure you invest what you save into cutting your debt.

Keep on top of your Spanish finances

The good news is that the debt and credit score you have in the UK do not impact your ability to take out credit in Spain. However, so that you can fully enjoy your retirement in Spain, it’s wise that you pay off your British debts before borrowing any funds in your new home. You also need to stay on top of the taxes you owe to the Spanish government.

In 2013, the introduction of new Spanish tax laws impacted 200,000 British expats. The Wealth Tax states that Spanish residents who have assets overseas worth €50,000 or more and who spend a minimum of 183 days of the year residing in Spain, must declare and pay tax on these assets. Failing to do so can result in a €10,000 fine, so it’s essential when you already owe cash in the UK that you don’t allow a similar scenario to occur in Spain.

Returning home

It may not sound like a possibility now, but at some point in the future you may opt to return to the UK. According to British tabloid, The Express, 22,000 British expats have quit Spain and returned home since Brexit was announced. Other factors such as a family illness may also lead you to return home. Failing to pay your debts now will negatively impact your credit score and, should you return to British soil, you’ll struggle to obtain credit at a time when you most need it.

In light of Brexit, British seniors are rapidly feeling the UK for the sunny sights of Spain. However, many are taking a significant chunk of debt with them. As an ageing expat in Spain, it’s best to make contact with your creditors and arrange to pay them back. There is always the possibility that you’ll need to return to Blighty at some point in the future and it can be tough for seniors to rebuild their credit score once it takes a downward turn. Make sure you pay your required taxes to the Spanish government too, to avoid accumulating any additional debt.