Loss of employment in itself does not release a debtor from obligations owed to banks and financial institutions. Loan agreements and credit card obligations remain in force until the debt is fully repaid. In the event of default, the bank is entitled to initiate judicial recovery proceedings and, upon obtaining an executory instrument, to apply for precautionary measures, including a travel ban.
The legal basis for such measures derives from Federal Decree-Law No. 42 of 2022, which regulates enforcement proceedings, as well as from the provisions on bankruptcy and financial restructuring set out in Federal Decree-Law No. 51 of 2023. A travel ban does not arise automatically upon default; however, it may be imposed by the court within enforcement proceedings upon application by the creditor, provided that a confirmed debt exists.
If the individual becomes aware of the travel ban only at the airport, this most likely indicates that enforcement proceedings have been initiated against him or he...