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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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
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.
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?
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).
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
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.