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, 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?
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.
Hi I wish to go bankrupt in the U.K. but I’m living in the EU. Since brexit have any of these rules changed? Can I still go bankrupt in the U.K. without it affecting me here?
Hi Joseph
In theory the rules have changed. Given the UK is no longer part of the EU, the same rules should now apply as if you had moved to a country outside the EU – you can still apply for bankruptcy in England/Wales for up to 3 years from the date you left.
That said no-one seems to be 100% clear that the moment whether this is actually the case or not and I am not aware of any cases that have “tested the water”. Nevertheless, you have very little to loose from submitting an application. If you are rejected for any reason you will be refunded £550 of the £680 fee charged. So the total you stand to loose would be £130.
In terms of the effects of going bankrupt in your home country, there will be little or none. However, you will still have to give details of your local income and expenses budget and pay any surplus income towards your debt. As such, getting this part of the application right is very important.
I would be happy to give you further advice if you want to contact me.
What if someone recently (within 3 years) emigrated to EU country, got an investment visa by buying a property in cash in better financial times. Although living in EU, they still have un-secured debts (loans/credit cards) which they’ve been servicing. And then thei financial position changes and can no longer service the debt.
You mentioned having to disclose local personal income and expenses. Does that include details of any company they’re involved in and assets it owns? Or personal assets? Or just their personal income/salary and costs?
Given the debt is un-secured, I assume they cannot go after an overseas property.
Thanks,
Hi Peter
When you go bankrupt in England or Wales, the official receiver is entitled to consider any assets you own anywhere in the world. This includes overseas property and shares in an overseas company. That said, this is a pretty complex area. If you would like to discuss your circumstances in more detail, please feel free to give me a call (0800 077 6180).