Should I go Bankrupt before I move Abroad?
After you move abroad maintaining debt payments in the UK can put you under real financial pressure. Going bankrupt before you leave can take this problem away.
- If you plan to move abroad is Bankruptcy a sensible option?
- Should you go bankrupt before you leave the UK?
- Can you get credit in the country you move to?
- Your obligations after you move abroad
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If you plan to move Abroad is Bankruptcy a sensible option?
If you plan to move abroad outstanding debts in the UK can be a problem. You may intend to keep up the repayments. But what if it turns out that you are unable to do this?
It is not unusual to be unsure about how long it will take to get a new job after you move. Even if you have a job lined up it is often difficult to know what your new rent and other living expenses will be.
Given this being able to move without having to worry about making debt payments in the UK can be a real help. Going bankrupt before you leave makes this possible.
After you are bankrupt if you can afford to do so you may still have to make payments towards your debts even if you are living abroad.
Should you go Bankrupt before you move Abroad?
If you plan to move to a country outside the EU generally speaking you do not need to go bankrupt before you leave. It is possible to move first and then assess whether bankruptcy is required.
Under the Insolvency Act section 263 I(2) you still qualify for bankruptcy in England & Wales for up to 3 years from the date you left. In addition since April 16 this option has become even more attractive as you can now apply on-line.
If you live in Scotland you lose the right to declare bankruptcy as soon as you move away. As such if you are considering going bankrupt in Scotland you must do so before you leave.
However if you are planning to move to another EU country (excluding Denmark) you can only go bankrupt before you leave.
Previous to April 2016 if you moved to another EU country you still had 3 months to declare yourself bankrupt in England & Wales. However after changes to the Insolvency Act introduced in April 16 this option has been taken away.
Will you be able to get credit in the County you move to?
When you go bankrupt your credit rating in the UK is seriously affected for up to 6 years. However local credit reference agencies rarely have cross boarder links. As such your credit rating in the country you move to should not be affected.
Once you have moved if you apply for a bank account or credit the local credit reference agency is unlikely to be aware of your poor credit rating in the UK.
As such despite your bankruptcy you should have the same options for credit as anyone else who is new to the country.
If you go bankrupt after moving to a non EU country you will have to declare any bank accounts you have opened locally. The Official Receiver (OR) is likely to write to the bank informing them of your UK bankruptcy. This could affect your local banking facilities.
Your Bankruptcy obligations after you move Abroad
Your bankruptcy in the UK will normally last for 12 months. If you move abroad after going bankrupt you must still remain in contact with the OR during this time.
If you are unsure what your income or living expenses will be after you move this is not a problem. However once you are settled and get a job you are legally obliged to inform the OR.
They will then ask for information about your new income and living expenses. If you have a surplus income the OR will still require you to pay this towards your debt in the UK.
If you have already moved abroad and then go bankrupt you will have to inform the OR about any assets you now own in your new country. If your car is worth more than £1000 you might be required to sell it and get a cheaper one. The OR is also interested in any property you may have bought.
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