If you have moved abroad you may still be able to use an IVA to manage debt in the UK. Your options will depend on when you left and the amount you can afford to pay.
Included in this article:
- The criteria for starting an IVA after moving abroad
- Do you have to return to the UK to apply?
- Will your local Credit Rating be affected?
- Could you just ignore your debt in the UK?
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The criteria for starting an IVA after you have moved Abroad
After you have moved abroad it is relatively common to have debt outstanding in the UK. Your intention may be to maintain the payments. However this may be more difficult than you had hoped.
Fluctuations in exchange rates can be enough to make the payments you have budgeted for unaffordable. Alternatively you may have not been able find work as quickly as expected.
Whatever the situation if you are struggling to pay your UK debts you can consider an IVA. You do not have to be living in the UK to do so. The only restriction is that you must normally apply within 6 months of moving.
Once you have lived outside of the UK for more than 6 months it is unlikely you will be able to apply for an IVA.
Do you have to return to the UK to apply for an IVA?
If you are already living abroad you do not have to return to the UK to apply for an IVA. The steps you need to take to apply can be done remotely via telephone and e-mail.
Clearly you must be able to afford to pay a reasonable amount towards your debts each month. You will need to prove that your income is sustainable by producing wage slips or a letter from your employer.
The Arrangement will have to be paid in pounds. You therefore need to remember the cost of international bank transfers when completing your living expenses budget. You must also consider possible exchange rate fluctuations. If the pound increases in value your payments will become more expensive.
If you cannot sustain monthly payments towards your debts you might be able to consider a full and final settlement IVA. Otherwise Bankruptcy might be a better option.
Will your local Credit Rating be affected?
If you start an IVA a record of the Arrangement will be recorded on your credit file in the UK. This will make your Credit Rating in the UK poor. However you should not be affected locally.
Credit reference agencies do not normally have the facilities to check your credit rating in different countries. As such you are likely to be able to get credit in the country where you are living now.
This means that your ability to get things such as a local mobile phone contract or bank account should not be affected.
Under the terms of your IVA you are not allowed to borrow more without the agreement of your IP. Given you live abroad you may be able to do so. However it is ill advised. Borrowing more may mean you struggle to pay your IVA and put it at risk.
Could you just ignore your debt in the UK?
Once you move abroad you might consider just forgetting about your debt in the UK and not paying it. Unless you have an extremely large debt with one creditor it is unlikely that your creditors will trace you.
However if you are planning to return to live in the UK in the future this is not an ideal solution. When you move back action against you to collect the outstanding debt will eventually resume.
If you do not maintain your debt payments you can visit the UK for short periods without risk. You will not be arrested at the boarder.
If you remain outside the UK for 6 years or more it is possible that your debts will become Statute Barred. If this happens and you then return to live in the UK they may then be unenforceable. However you should not rely on this.
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