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Can I go Bankrupt if I have moved Abroad?
Money Advice, Debt Advice & Debt Help

Can I go Bankrupt if I have moved Abroad?

Can I go Bankrupt if I have moved Abroad?

It is possible to go bankrupt in the UK if you have already moved abroad. However it depends where you are living.

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Can you go Bankrupt if you have moved abroad – within the EU?

Prior to April 2016 if you moved from England & Wales to another European Union (EU) county you could still declare yourself bankrupt in the UK for 3 months.

However changes were introduced in April 2016 as a result of the Enterprise and Regulatory Reform Act. Now as soon as you move to another EU country you lose the right to go Bankrupt here.

Where you live in another EU country and find that you are struggling with your debts in the UK you will have to use the insolvency rules and procedures in your local country.

If you live within the EU you can become eligible to go Bankrupt in the UK once again if you move back and live here for the greater part of 6 months.

Bankruptcy if you have moved outside the EU

If you have moved to a county outside the EU you can still go bankrupt in England & Wales for up to three years from the date you moved.

After you have been living outside the EU for more than three years this option is taken away. You must now rely on the insolvency rules in the local country where you live.

If after 3 years you want to take advantage of the benefits of bankruptcy in the UK the only way is to move back. After 6 months you will become eligible to declare yourself bankrupt again.

This information refers to people who previously lived in England & Wales. If you were living in Scotland before moving abroad you are not allowed to go Bankrupt unless you return there.

How to go Bankrupt if you are already Abroad

If you are living abroad and are eligible to go Bankrupt in England & Wales the process is relatively simple. Since April 2016 you no longer have to return to the UK.

You can submit your application online. Using the Government’s system you complete and submit the application form and pay your application fee via the web.

Once you are bankrupt you are required to have an interview with the Official Receiver (OR). However it will be conducted over the telephone. You will not have to travel back to the UK to do this.

Even through you are living abroad you must remain in contact with the Official Receiver while you are bankrupt. If your financial circumstances change you are still legally bound to inform them.

How will Bankruptcy affect you in your local country?

You will need to tell the Official Receiver about your local income and living expenses. If you have surplus income you will still have to make monthly payments towards your debts in the UK.

Likewise if you own assets abroad such as a car or property you will have to list these in your application. If your car is worth more that £1000 you may have to sell it and get a cheaper one. If you own any property the OR will be interested in this.

Your Credit Rating in the UK will be negatively affected. However it is unlikely that this will affect you in your local country. You should still be able to use facilities such as your local bank account.

You will have to list your local bank account on your application form. It is likely that the OR will write to them regarding your bankruptcy. This may or may not mean you need to open a new account.

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14 thoughts on “Can I go Bankrupt if I have moved Abroad?

  1. Jola says:

    Hello! If I move abroad and I have personal loan, can I go bankrupt before I leave? Or I can do it from another country? It is EU Country and can they come after me? Is the bad credit score stay in UK or that will be known in all EU countries? Thank you!

    1. Hi Jola,

      As highlighted in the article above if you planning to move to another EU country you MUST go bankrupt before you leave. You lose the right to bankrupt in the UK from the date you move to another EU country. As such as long as you are still living in England or Wales you can go bankrupt and the debt you owe will be written off.

      AFTER you are bankrupt there is nothing to stop you moving to another EU county if you wish. It is very unlikely that your credit rating will be affected in any other EU countries. As you say your poor credit rating will remain in the UK.

  2. talster says:

    I lost my job in the UK two years ago and then I moved back to the US. I no longer can pay my UK Debts, what are my options.

    1. Hi talster

      If you moved from the UK to the US 2 years ago your options will depend on your circumstances. If you are not a home owner or a director of a limited company I would strongly advise that you consider bankruptcy. You can still apply for up to 3 years from the date you left the UK. If you have no surplus income you would not have to make any further payments towards the debts. If you do you still have to pay this towards your debts but only for a maximum of 3 years.

      If you are a home owner then bankruptcy might have to be avoided. Where this is the case you will probably need to consider a debt management plan. Unfortunately it is unlikely that an IVA will be available given the length of time since you were living in the UK. Most Insolvency Practitioner’s will be reluctant to help if it is more than 6 months since your leaving date.

  3. Sharon says:

    I have friends who moved to Spain from the UK in 2012 and then from Spain to South Africa in 2015 who can no longer pay the UK and Spanish debts, but have property (under Mortgages) in the UK, Spain and South Africa. As they moved to South Africa from Spain do they declare bankruptcy in Spain or the UK? What will happen if they simply stop paying the UK and Spanish debts?

    1. Hi Sharon

      Given your friends moved away from the UK more than 3 years ago they do not qualify to declare bankruptcy in the UK. They would only qualify if they move back and make their COMI (Centre of Main Interest) here. To achieve this they would have to live and work here permanently for ideally 12 months (although it might be possible to submit a successful application after 6 months).

      The fact they have a house here does not mean their COMI is here unless they are permanently living in it. Note: If they were to move back to the UK with a view to going bankrupt they will also need to consider the implications of going bankrupt on their property both in the UK and abroad.

      Given they have now been living in South Africa for 4 years I would assume that unless they move back to the UK (as described above) they will need to declare bankruptcy there. However I cannot give you any advice about how the insolvency rules work in South Africa. If they simply stop paying their debt in the UK then the UK creditors are likely to take Court Action against them and eventually secure the debt owed on their property.

  4. Lucinda Eton says:

    Hi there, we have recently moved to Canada and with the exchange rate and only one wage coming in we are struggling to send money home to the UK for debts as well as survive here. We have been here 6 months can we apply for bankruptcy and if we did would we be effecting our credit score in Canada as we ideally would like to be able to buy a house here in 5 years time once we are financially stable, thanks

    1. Hi Lucinda

      The situation your find yourself in is relatively common. I have worked with a number of people who have been in the same position.

      As you have moved outside the EU you can apply for bankruptcy in the UK for up to 3 years from the date you left. Given you only moved 6 months ago you can still apply yes. The application process is on line so it is relatively easy to submit an application from abroad. You do not have to come back to the UK to do it.

      Your credit rating in Canada would not be affected. As such your ability to get credit locally is unlikely to be impacted by your bankruptcy in the UK.

  5. Brigitte says:

    I have a large sum of outstanding loans and credit cards which I paid while I was working in UK. Unfortunately, due to unforeseen family circumstances, I had to sell my property (shared owned) as I had to pay for medical bills outside of UK for my family members and look after them. My mortgage and some of my depts were not paid.

    Currently, I live and work in EU, but my salary will not be enough to support myself and pay my depts. I was hoping that I can get IVA, but I have been told that I will have to move back to UK and start working again, so I can claim IVA. That is impossible, as I tried for the past 6 months.

    Now, I am uncertain what I can do, as all my left over money was spent to pay my loans/credit cards, but it seems that the only option now is bankruptcy. My understanding is that I cannot do that either as I am not in UK. Can someone help me what can I do, please?

    1. Hi Brigitte

      Unfortunately your situation is not an easy one. Generally speaking if you have moved out of the UK for more than 6 months an IVA will not be an option. In certain situations it may be possible to bend these rules a bit but generally speaking that is the case.

      If you are now living in another EU country under the current rules you have to go bankrupt in the country in which you reside. As such you lose the option to go bankrupt in the UK as soon as you leave. Now these rules may change after Brexit but unfortunately we will not know that until Brexit actually happens.

      I think it would be worth having a more detailed chat about your situation to see if an IVA might be workable. Please do contact me if you would like to do that (0800 077 6180).

  6. MATTY BEATTIE says:

    Hi.
    If I move to France but still work in the UK after I declare bankruptcy will the O.R. take in to account my French living expenses?.
    Will excess monies be deducted at source from my pay?

    Many thanks.
    Matt

    1. Hi Matty

      When calculating your surplus income the official receiver will look at your income regardless of where you earn it and the living expenses you need to cover your particular situation. So if your expenses are largely incurred in France (rent, bills etc) they would take these into account yes.

      If you do have a surplus and are required to make payments these are not deducted from your wages. You will have to set up a standing order from your bank account for the required amount which is normally paid to a collecting agent working on behalf of the OR.

      Remember it will be much easier to go bankrupt before you move to France (or anywhere else in the EU). This will ensure there will be no issues regarding your COMI. There are no restrictions on movement afterwards as long as your application is made in England or Wales.

  7. Adrian Young says:

    Hi, I moved to Singapore over three years ago but sadly got myself into a very bad financial situation due to my mental health addictions. I am now destitute and have no money to cover my debts, and have no job in the country. It’s likely the banks will declare me bankrupt, but does it affect me if I then move back to the UK?

    1. Hi Adrian

      If you are declared bankrupt in another country and then move to the UK your credit rating here in the UK will not be affected. You will be able to continue to get banking and credit facilities here as normal. This is because there is no international credit reference agency which is able to do global cross checks.

      That said if you are made bankrupt in Singapore and then you leave that country, I would assume you will still have to abide by the rules and regulations of that procedure. However I am unable to confirm what these might be.

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