Go bankrupt in the UK if you live Abroad – Post Brexit Guide

James Falla

• 21 Sep 2023

If you have moved away from the UK and now live abroad, going bankrupt could still be an option if you are struggling to pay your debts.

Included in this article:

• Are you allowed to go Bankrupt if you have moved abroad?
• How to go Bankrupt if you already live abroad
• Will you still have to pay towards your debts?
• Is your local credit rating affected?
• What if you have never lived in the UK?

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Are you allowed to go Bankrupt in the UK if you now live Abroad?

Where you have moved abroad, you may be struggling to pay debt you still owe in the UK. If so, you probably still have the option to declare yourself bankrupt here. 

After you move, you have up to 3 years to go bankrupt from the date you left (as long as you were living in England or Wales). As such you will generally have plenty of time to make up your mind.

Since Brexit came into force in January 2020, the rules about moving from England & Wales to Europe and then going bankrupt also changed. Now, you are treated in the same way as if you had moved to any other country.

In other words you no longer lose your right to go bankrupt in the UK. You still have 3 years from the date you left to submit your application.

In January 2020 the UK left the EU. As a result you can now apply to go bankrupt in England and Wales for 3 years after the date you moved to another European country. 

How to go Bankrupt if you already live Abroad

If you now live abroad and moved in the last 3 years, the process of going bankrupt is similar to if you were still living in the UK.

First, you need to complete and submit an online application.

After you have been declared bankrupt you will then have an interview with the Official Receiver (OR). However this can be done over the telephone or via e-mail. It does not matter if you are living in a different country.

The Official Receiver will be interested in any assets you own outside of the UK. You will need to declare the value of your car. If it is worth more than £1500 you might have to sell it and get something cheaper.

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If you live Abroad will you have to pay towards your debts after you go Bankrupt?

Once you are Bankrupt all the income you earn whether this is in the UK or abroad must be declared. The OR will agree with you how much you need to live on. If after this you have any surplus income which can be paid towards your debts you will have to do so.

If you own property abroad, you will need to provide details of its value and what if any equity you have in it. As with property in the UK you will have to release your share of any equity for your creditors.

The OR will normally be willing to accept a reasonable cash lump sum offer in lieu of your share of any equity. If you are unable to do this they may put pressure on you to sell in order the release the available equity.

This process of forcing you to sell a property abroad is complex and costly. The OR has no automatic legal ownership. However if there is considerable equity the OR may employ local solicitors where they feel there is no other option.

How will your local Credit Rating be affected?

Once you go Bankrupt a record of this will be added to your UK credit file. It will remain there for 6 years. As a result your UK credit rating will be poor during this time.

It is extremely unlikely that your local credit rating will be affected. It is unlikely that any local credit reference agencies will discover your circumstances. There is very little cross boarder communication between credit reference agencies.

After 6 years the record of your bankruptcy will come off your UK credit file. Your credit rating will then start to improve. This is an advantage if you ever plan to move back to the UK.

You will have to declare any bank accounts you hold in your new country. The Official Receiver is likely to write to them explaining that you are bankrupt in the UK. This could affect your local banking facilities.

Can you go Bankrupt if you have never lived in the UK?

If you have never lived in the UK but you have debts in another EU country (except Denmark) it is possible to go bankrupt here and write off your local debts.

However to take advantage of this you first have to move to the UK and live here for at least 6 months. Strictly speaking the law states you must live in the UK for “the greater part of 6 months” (3 months and 1 day). However you should plan to be here for at least 6 months before submitting your application.

After this time if you go Bankrupt any other debt that you owe to other EU creditors will be covered. Your creditors will not be able to take any further action against you either in the UK or in the country where you incurred the debt.

Need more advice about going bankrupt in the UK after you moved abroad? Give us a call (0800 044 3194) or complete the form below. The advice is free and confidential.