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 James,
I have declared myself bankrupt in the UK and my VISA expires in another month. There’s an IPA and I am making payments as agreed. However, after I move from UK I will not be having a UK income and it will be difficult for me to pay the IPA. As proof I can give the OR my P45 form and a copy of my BRP card, but apart from that what should I do.
I do not have any assets in the country I will be moving to and have to start from a scratch there. I do understand that my credit score will not be affected in the new country but again settling there would be costly. Please can you advise what must I do so that my automatic discharge from bankruptcy is not jeopardised.
Hi Jith
When you stop working in the UK and move to another country during an IPA, all you need to do is contact the IPA team at the OR’s office and let them know.
Once you move, if you don’t expect to start working straight away, you should tell them that your income will reduce to zero. They will then suspend your IPA payments.
However, your IPA is still in place for the remainder of the 3 years. This means you are still obliged to let the UK OR know if/when you do start working. You will then have to complete a new income and expenses budget. If based on your local income and expenses, you have no surplus, you will not have to start making payments.
Where you do have a job to go to and will start working straight away, you will need to do an income and expenses budget straight away. If based on your local income and expenses, you have no surplus, then you will not restart any payments. But if you do have a surplus, you will still have to transfer this to the OR in the UK for the remainder of your IPA.