It is possible to go bankrupt in the UK if you have already moved abroad as long as you moved within the last 3 years. Since Brexit, this now applies if you have moved to a county within the EU.
Included in this article:
- What if you have moved within the EU?
- Going Bankrupt if you have moved outside the EU
- How to go Bankrupt if you are already Abroad
- What affect will Bankruptcy have on you locally?
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Can you go Bankrupt if you have already moved abroad – EU?
Since Brexit came into force in Jan 2020, the rules on going bankrupt in the UK if you have already moved to another EU county have changed.
Now, if you used to live in either England or Wales and still have debts in the UK that you can’t pay, you can go bankrupt for up to 3 years after your leaving date.
This has brought the rules for people who have moved to EU countries in line with if you moved anywhere else.
If you moved more than 3 years ago, you will still need to return to the UK and live here permanently for at least 6 months before you can apply to go bankrupt.
Bankruptcy if you have moved abroad – 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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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!
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.
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.
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.
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?
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.