Bankruptcy Expert https://bankruptcyexpert.co.uk Bankruptcy Expert Tue, 11 Sep 2018 17:09:08 +0000 en-GB hourly 1 Bankruptcy or IVA – Which is best? https://bankruptcyexpert.co.uk/articles/bankruptcy-iva-best https://bankruptcyexpert.co.uk/articles/bankruptcy-iva-best#respond Thu, 11 May 2017 11:54:25 +0000 https://bankruptcyexpert.co.uk/?p=1579 Will you pay more in Bankruptcy or IVA? Which is better if you are a home owner? Bankruptcy or IVA and your car. How both options affect your credit rating.

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If you are trying to choose between Bankruptcy or IVA your gut feeling might be to avoid bankruptcy. However going bankrupt might be the better solution.

Trying to choose between Bankruptcy or an IVA? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

Will you pay more in Bankruptcy or IVA?

You may have to make ongoing monthly payments towards your debts whether you choose Bankruptcy or IVA. However it is likely that overall you will pay less if you go Bankrupt.

In an IVA you must be able to afford to maintain reasonable payments towards your debts for 5-6 years. With Bankruptcy if you can afford to make payments these will last for only 3 years. So you will save yourself 2 years of payments.

If you have no surplus income and your situation is unlikely to change you will not have to make any payments towards your debts once you are bankrupt. After 12 months your debt is written off.

If your income is made up solely of benefits you will not have to make further payments towards your debts if you go bankrupt.

Is Bankruptcy or IVA better if you are a Home Owner?

If you are a home owner the decision about bankruptcy or IVA will largely depend on whether there is equity in your property.

Where you have considerable equity you should probably avoid bankruptcy as it would put your home at risk. An IVA on the other hand would allow you to keep your property although you might have to release equity from it.

In a scenario where you have little or no equity it is likely that you will be able to keep your home if you go Bankrupt. As such in these circumstances bankrutpcy can certainly be considered.

Starting an IVA does not necessarily mean that all the equity in your proeprty is protected. You will be obliged to try and release as much as you can in the 5th year.

Bankruptcy or IVA and your Car

In bankruptcy you are allowed to keep a car if you need it. However its value cannot normally be more than £1000. If your vehicle is worth more you would have to sell it and get something cheaper.

However you are allowed to keep a more expensive car in an IVA. Generally speaking it is not a problem if the value is above £1000. As such if you want to keep a more expensive car an IVA might be a better optionfor you.

If your vehicle is currently on HP or a lease you will be able to continue paying this during an IVA. It may also be possible to do so in Bankruptcy as long as the payments are not unreasonable high.

A vehicle worth more than £1000 is exempt from Bankruptcy if it is necessary for the running of your business.

Bankruptcy or IVA and your Credit Rating

There is actually very little difference between Bankruptcy or IVA when it comes to your credit rating. Both solutions are recorded in the same way on your credit file for 6 years.

As such you will find it just as difficult to get new credit whether you start an IVA or go Bankrupt and the effects will last the same length of time. In addition neither of the two are publicised in the local newspaper and your employer is not informed.

You may think you will have a better chance of getting a mortgage in the future if you use an IVA. This is not correct. Lenders are just as likely to give you a mortgage after bankruptcy. In some circumstances you may even be able to do so more quickly.

You should not base your decision about bankruptcy or IVA on how your credit rating will be affected. In this area both solutions will have virtually the same impact.

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Confirm you are Discharged from Bankruptcy https://bankruptcyexpert.co.uk/articles/confirm-you-are-discharged-from-bankruptcy https://bankruptcyexpert.co.uk/articles/confirm-you-are-discharged-from-bankruptcy#comments Tue, 09 Feb 2016 12:16:29 +0000 https://bankruptcyexpert.co.uk/?p=1179 How to check you are discharged from bankruptcy. How to get written confirmation. Apply for a formal Discharge Certificate. Confirm that a DRO has ended.

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You will normally be discharged from Bankruptcy automatically after 12 months. You can request written confirmation if you need it.

Want help to go bankrupt? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

How to check you are Discharged from Bankruptcy

Bankruptcy lasts for 12 months. After this time you are automatically discharged. However the Official receiver will not give you any notification of this at all. It just happens. You can check the date you are due to be automatically discharged by looking up your details on the Insolvency Register.

Your details will remain on the Insolvency Register for 3 months from the date of your discharge. After that they will be taken off and will no longer appear if you search for them. Then the only record of you having been bankrupt is the London Gazette archives.

BE Tip: You cannot get early discharge from Bankruptcy. However the period you are bankrupt might be extended if you do not co-operate with the Official Receiver.

Written confirmation of your Bankruptcy Discharge Date

The fact that you do not receive written confirmation that you have been discharged from Bankruptcy is nothing to worry about. In general it is not needed. However what if you want something for your own peace of mind?

If you want to receive a letter which confirms the date of your discharge you can request this. You simply need to send your request by e-mail to the Insolvency Service Enquiry Centre. You will normally receive your letter as an e-mail attachment within a couple of days.

The e-mail address to use is: Discharge.Queries@insolvency.gsi.gov.uk. You will need to include the following details in your e-mail:

  • Your full name
  • Date of Birth
  • National Insurance Number
  • Bankruptcy Court Reference
  • Current address
  • The address you lived at when you were declared bankrupt (if different)

How to get a Formal Certificate of Discharge from Bankruptcy

The confirmation of discharge letter provided by the Insolvency Service simply confirms the recorded date you were discharged. In some circumstances you may require more formal proof.

Where this is the case you can apply for a Certificate of Discharge from Bankruptcy. This is issued by the Bankruptcy Court and formally states the date from which you have been discharged. To apply for your Certificate of Discharge you will need to complete a specific form LOC013.

Once completed your form must be sent together with a fee for £70 to the local County Court which dealt with your bankruptcy. Your payment should by Cheque or Postal Order made payable to HMCTS. You will normally receive your Certificate within three to four weeks of the Court office receiving your application.

BE Tip: If you were made bankrupt at the Royal Courts of Justice in the High Court then you should make your application to the High Court at the Rolls Building. If you were made bankrupt at the Royal Courts of Justice in the County Court then you should make your application to the Central London County Court sitting at the Thomas More Building.

Can you get confirmation of discharge from a Debt Relief Order?

If you used a Debt Relief Order (DRO) the moratorium period lasts for 12 months. After this time the Order automatically comes to an end. You will not receive any confirmation from the Official receiver that your DRO has finished.

You can check the date that your DRO is due to finish on the Insolvency register. However this record will only remain for 3 months after that date. Then there is then no publically accessible record of your DRO ever having existed.

If you wish you can request a letter confirming your are discharged from your debts. The insolvency service has a dedicated Debt Relief Order team based in Plymouth. The telephone number to contact the team is 01752 635200 Alternatively you can e-mail your request directly to the DRO team at DRO.Unit@insolvency.gsi.gov.uk.

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Will Creditors make you Bankrupt? https://bankruptcyexpert.co.uk/articles/will-creditors-make-you-bankrupt https://bankruptcyexpert.co.uk/articles/will-creditors-make-you-bankrupt#comments Wed, 21 Oct 2015 15:06:42 +0000 https://bankruptcyexpert.co.uk/?p=1147 Are your creditors likely to make you bankrupt? What if you are a home owner? What if you owe money to HMRC? Is it best to make yourself bankrupt?

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Unless you owe a significant amout to HMRC it is highly unlikely that your creditors will make you bankrupt. It just does not make financial sense.

Want help to go bankrupt? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

Are your Creditors likely to make you Bankrupt?

Anyone to whom you owe at least £5000 can apply to make you bankrupt if you are not paying them. This figure was increased from £750 on the 1st October 2015. However it is unlikely that any of your creditors will take this action.

If they make you bankrupt they lose control of the collection process. All responsibility for this is then passed to the Official Receiver (OR). Even if money is collected from you the OR will take significant fees leaving little or nothing for your creditors.

Given this they usually have a better chance of getting their money back using other methods. These may include issuing a CCJ against you and then applying for an Attachment of Earnings or a Charge against your property.

If you owe money to an individual or trade creditor they might petition for your bankruptcy. The rational for this is likely to be more to cause you inconvenience rather than to collect the debt owed.

Is it more likely you will be Made Bankrupt if you are a Home Owner?

If you are a home owner it is still extremely unlikely that one of your creditors will apply to make you bankrupt. The reason for this is that even then there is still little chance that their debt would be repaid unless there is significant equity in your property.

This is because any cash released from your property will not simply be paid to the creditor who made you bankrupt. Their costs would be paid but then the Official Receiver’s fees would be taken. These could total £1000s.

After this any cash remaining is shared between all your creditors. This makes the likelihood of the petitioning creditor actually recovering all of their debt very small.

If you are struggling to pay an IVA you may be worried that you will be made bankrupt if it fails. In reality you are likely to have to make yourself bankrupt.

What if you owe Money to HMRC?

The majority of your creditors will not want to make you bankrupt as it is simply not in their financial interests. However HMRC often take a different view.

Clearly they are interested in the recovery of overdue Tax or VAT debts. However they are also concerned about preventing your debts becoming any worse. Forcing you into bankruptcy may be a good way of achieving this.

Having said that the fact that you owe money to HMRC by no means guarantees that you will be made bankrupt. If you are not a home owner they may threaten the action but then never go through with it.

If you owe money to HMRC talk to use about whether Bankruptcy is your best option and how likely it is you will be made bankrupt.

Is it best to Make Yourself Bankrupt?

Because few if any of your creditors will actually make you bankrupt there is normally no point in waiting for them to do it. If you have decided Bankruptcy is the right solution for you it is usually better to start the process yourself.

This means that you will have to pay the Application Fee. However you are then protected from other collection actions that your creditors are likely to take.

The longer you wait before you go bankrupt the greater the risk that one of your creditors will take different action against. They could successfully apply for an Attachment of Earnings or a Charge against your home.

If a CCJ has already been issued you may need to act quickly to prevent further action against you or your home.

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Go Bankrupt Twice https://bankruptcyexpert.co.uk/articles/go-bankrupt-twice https://bankruptcyexpert.co.uk/articles/go-bankrupt-twice#respond Tue, 15 Sep 2015 10:08:37 +0000 https://bankruptcyexpert.co.uk/?p=1124 Can you go Bankrupt twice? Will you be penalised for going through the process again? Will debt payments be required? What happens to your home?

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There is nothing to stop you going bankrupt twice. It is unlikely you will be penalised because you went through the process before.

Planning to go Bankrupt for a second time? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

Can you go Bankrupt twice?

Bankruptcy it is probably something you told yourself you would never do again. However if you have got back into debt you are legally allowed to apply again if you want to.

There is no time restriction on when you can apply. As such it is even possible to go through the process within a year or two of your last discharge.

The first time you went bankrupt may have been some years ago. As such it is important to familurise yourself with the changes which may have happened since you last went through the process.

You no longer have to apply to go bankrupt at the Court. The process has moved on-line.

Will you be penalised if you go Bankrupt Again?

It is very unlikely that you will be penalised for going bankrupt twice. Your new circumstances will be reviewed by the Official Receiver (OR) in isolation.

The length of your bankruptcy will not change because it is your second time around. You will remain bankrupt for 12 months as standard. You will not be treated any differently simply because financial circumstances have turned against you once again.

If you have made a transaction at undervalue in the last 5 years or made a preferential payment to a creditor in the last 2 you will be at risk of getting a BRU. However this is the sae for everyone. It is nothing to do with the fact you have been bankrupt before.

Given you co-operate fully with the OR you should not be penalised if you go bankrupt for a second time.

Will Debt Payments be required if you go Bankrupt Twice?

The fact that you are going bankrupt again does not automatically mean that you will have to make payments towards your debts. This will depend entirely on whether or not you have any disposable income.

The OR will review your income and expenditure budget in the same way as anyone else going through the process. Where you do have a surplus you will be required to pay this towards your debts for 3 years.

However this is nothing to do with the fact that you are bankrupt for a second time. You cannot be made to pay towards your debt unless you can afford to do so.

Changes to the rules introduced in December 2010 now mean that 100% of your disposable income must be paid towards your debts.

Will you be forced to sell your home if you go Bankrupt Twice?

You do not automatically have to sell your home if you go bankrupt twice. The rules in this area are the same whether you are going bankrupt for the first or subsequent times.

If there is little or no equity in your property there is minimal risk. You will still need to buy back your beneficial interest from the Official Receiver. However that can be done for a relatively small payment.

There will be more of a problem if you have a larger amount of equity. If you are unable to release this in any other way you might face having to sell your home.

Contact us if you are are a home owner and want to understand how to protect your property.

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My Partner and Bankruptcy https://bankruptcyexpert.co.uk/articles/my-partner-and-bankruptcy https://bankruptcyexpert.co.uk/articles/my-partner-and-bankruptcy#comments Fri, 21 Aug 2015 10:50:26 +0000 https://bankruptcyexpert.co.uk/?p=1112 If you go bankrupt does your partner have to pay your debt? What happens to joint property? Is their credit rating affected? What about joint debts?

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Your partner or spouse may be affected if you go Bankrupt. You need to understand the implications particularly if you have jointly owned property or joint debts.

Want help to go bankrupt? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

Does your partner have to pay your debt if you go Bankrupt?

If you go bankrupt your partner will not have to pay your debts. Legally speaking no third party is liable to pay debt that is just in your name even if you are married.

Despite this you do have to include details of their income on your application form. This is the case whether they are working, receive benefits income or a combination of both.

The reason is the Official Receiver must ensure they pay their fair share towards the household expenditures. As such a household surplus income has to be calculated. This is then shared between you both. Your share will have to be paid towards your debts each month.

Your partner can keep their share of any household surplus income. Any payments you have to make are based on your share alone.

What happens to Jointly Owned Property if you go Bankrupt?

Your partner’s share of any equity in a jointly owned property is protected if you go bankrupt. However yours is still transferred to the Official Receiver (OR) and has to be realised to help pay your creditors.

Your partner can buy back your share from the OR. If there is no equity in the property this can be done for a nominal sum plus solicitors costs. However where it is worth more an amount similar to the value of your share will have to be paid.

If neither of you are unable to raise the money to buy back your share of the equity after 3 years action could be taken to force a sale. If this happened your partner would be given their share of any equity released. Your share would be retained by the OR.

The Official Receiver does not want to force the sale of a jointly owned property. It would only happen if there is significant equity and your share cannot be released any other way.

Is your Partner’s Credit Rating affected if you go Bankrupt?

Your credit rating will become poor if you go bankrupt. However the rating of your partner or anyone else living at your property will not be affected.

The record that you are bankrupt does not show up on anyone else’s file. This is the case even if you and your partner are married. As such they can continue to apply for new credit if they wish.

Having said that the credit records of two people living at the same address can be mixed up. As such after you go bankrupt it is sensible for other adults living at the property to get a copy of their credit file to ensure no mistakes have been made.

What happens to your Partner’s Debts if you go Bankrupt?

Only unsecured debts in your name can be included if you go bankrupt. Debts in your partner’s name are not included and still have to be paid.

This will be a problem if they cannot afford to pay their own debts from their share of the household surplus income. You will no longer be able to help them pay from money you receive.

There may also be an issue if you have debts in joint names. You will no longer have to pay these after you go bankrupt. However your partner must maintain the payment as they remain liable to pay 100% of the outstanding balance.

If your partner cannot afford to pay debts in their name or joint debts from their own income they may have to consider using a debt solution themselves.

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Save during Bankruptcy https://bankruptcyexpert.co.uk/articles/save-during-bankruptcy https://bankruptcyexpert.co.uk/articles/save-during-bankruptcy#respond Fri, 14 Aug 2015 14:55:22 +0000 https://bankruptcyexpert.co.uk/?p=1095 Are you allowed to save during Bankruptcy? Can you keep all the money you put aside? How to save if you are Bankrupt.

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There is nothing to stop you trying to save while you are bankrupt. The question is how do you actually do it?

Are you allowed to save during Bankruptcy?

The answer to this is yes you are allowed to save during bankruptcy. Shortly after you go bankrupt you will agree your living expenses budget with the Official Receiver. Once this is done you are then left to manage your budget yourself. The Official Receiver does not do this for you.

You have to ensure that any Income Payment you have agreed is made on time. But after that you are responsible for spending or saving the money in your budget in any way you like. It is not just allowed but actually important that you do save some of this.

It is likely that some of the allowances in your budget are for bills that you do not have to pay each month. For example there may be amounts for car or home repairs. You should save save these amounts. If you do not the money will not be available when the bills come up. You should also try to save so that you have money put aside to cover unexpected financial emergencies.

Can you Keep the Money you put aside during Bankruptcy?

There is no limit to the amount you are allowed to save during bankruptcy. The only rule is that any money you put aside must come from your agreed living expenses budget. If you receive any type of additional cash it is unlikely that you will be able to save any of that money. You will have to declare it to the Official Receiver as a windfall and it will normally have to be paid to them.

You may only be able to save a small amount each month. Perhaps only the allowance you have been allowed for emergencies. However if you can save more by cutting back on any of your other agreed expenses there is nothing stopping you from doing so. It will mean that you save a bit more money which you can fall back on if and when you need it.

Money you save from your agreed living expenses budget while bankrupt is yours to keep. If you do not need to spend it does not have to be paid to the OR.

How to save if you are Bankrupt

Saving is not easy at the best of times let alone if you are bankrupt. However if you manage your monthly expenses budget correctly it should be possible. The first thing you need to think about is how much you can save.

It is unlikely that you will be allowed a budget in your expenses specifically for saving. However there may well be other amounts that you can identify which are not required for day to day living which you can and should save. For example the amounts you have been allowed for car and home maintenance, emergencies and dental/optical expenses. You should add all these amounts together and this will give you the amount you should save each month.

The best way to save during Bankruptcy is to do it as soon as you receive your income. Think of the amount you save as just another bill that has to be paid. You can even open a savings account at your bank so that you can transfer the money out of your main account. In that way it will be out of sight and you will be less tempted to use it for top up your day to day living expenses.

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Bankruptcy figures continue to fall in 2015 https://bankruptcyexpert.co.uk/articles/bankruptcy-figures-continue-to-fall-in-2015 https://bankruptcyexpert.co.uk/articles/bankruptcy-figures-continue-to-fall-in-2015#respond Fri, 31 Jul 2015 14:47:48 +0000 https://bankruptcyexpert.co.uk/?p=1073 Bankruptcy figures have been falling since 2009. Why are fewer people going Bankrupt? Will
the number of people going Bankrupt continue to go down?

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Since peaking in 2009 the number of people going Bankrupt in England & Wales has been falling year on year ever since. In Q2 2015 just under 4000 people went bankrupt. This was the lowest number in any quarter for 5 years. In contrast in the same quarter in 2014 the number was 5470. In 2009 it was 18,870.

Why are fewer people going Bankrupt in England & Wales?

The simple reason fewer people are going bankrupt is that the economy is improving. Wages are now on the increase and the cost of living is relatively low due to suppressed interest rates and inflation. As a result many people are feeling financially better off. They are therefore managing to resolve financial difficulties without having to consider a debt solution.

Hand in hand with this the banks are starting to lend again. Options for taking unsecured loans and mortgages are increasing every day. People are therefore finding it easier to overcome financial problems by borrowing consolidation loans or releasing equity from their property.

In the past I have suggested that a significant reason for the reducing bankruptcy figures is cost. I have argued that the Court Fee which has to be paid up front is enough put people off. As such they have been almost forced to choose a different solution. However this does not explain why the reduction is now reflected across all the different types of personal insolvency including Debt Relief Orders and Individual Voluntary Arrangements. As such I feel the wider economic forces are the main driving factor.

Why were more people going Bankrupt before the Recession?

To suggest the improving economy has lead to falling bankruptcy figures is reasonable. However if it is true then why were more people going bankrupt in the years before the recession when the economy was booming? In 2006 alone nearly 63,000 people went bankrupt (25% more than in 2014 including Debt Relief Orders). At that time most were feeling very positive about their future.

The main reason for this is that in 2006 the country had passed through almost 10 years of relaxed bank lending. Over a long period individuals had found it comparatively easy to borrow in the form of loans, mortgages, credit and store cards. This meant that many were allowed to over extend themselves.

As a result the number of people getting into financial difficulty from over borrowing was massive and reflected in the bankruptcy figures. Today the economy is growing again. However the last 5 years of restricted borrowing has left fewer people with unmanageable debts. As a result there are simply fewer who feel the need to go Bankrupt.

Are the Bankruptcy figures likely to continue falling?

In October 2015 the level of debt that can be included in a Debt Relief Order (DRO) will increase to £20,000. As such there is likely to be a slight increase in people who chose this solution over Bankruptcy. This may reduce the number of bankruptcies still further.

The Bankruptcy application process is due to become easier sometime in 2016 with the introduction of an on-line application process. This might encourage more people to go bankrupt if the idea of having to submit their application in Court put them off before. However with no change in cost anticipated I do not think this will have a major impact on the overall numbers.

It is likely that interest rates will start to increase in 2016. However this will be extremely gradual. As such I do not believe the change will lead to a huge increase in financial hardship. Mortgage payments for many will go up. The cost of renting privately might also increase as a result. However in reality only by minimal and manageable amounts which should be offset by increasing wages.

Given this I find it hard to conclude that the number of bankruptcies will start to increase again anytime soon. I believe the current downward trend is likely to continue during 2015 and possibly beyond.

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Resolve Debt in Ireland – Go Bankrupt in England https://bankruptcyexpert.co.uk/articles/resolve-debt-in-ireland-go-bankrupt-in-england https://bankruptcyexpert.co.uk/articles/resolve-debt-in-ireland-go-bankrupt-in-england#respond Wed, 22 Jul 2015 11:28:23 +0000 https://bankruptcyexpert.co.uk/?p=1056 How to write off debt in Ireland by going Bankrupt in England. When can you return to Ireland? Will your Irish Credit Rating be affected? Can you go to Northern Ireland?

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If you are struggling with debt in Ireland one of the options available is to move to England and go Bankrupt.

Want help to go bankrupt in England? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

How to write off debt in Ireland by going Bankrupt in England

If you have debt in Ireland and particularly if you are struggling with your mortgage but cannot sell your property you may feel trapped. One way out is to stop paying the mortgage company and hand the keys back to the mortgage lender. Then go Bankrupt in England.

Under EU rules if you go bankrupt in England or Wales any unsecured debt that you owe in Ireland or any other EU county such as bank loans or a mortgage shortfall is included. The local mortgage lender or other creditors to whom you owe money can no longer enforce the debt.

Unfortunately you cannot simply take a day trip to England or Wales and go bankrupt. Before you can submit your application your Centre of Main Interest (COMI) must be in England for the greater part of the last 6 months.

You have to move to England or Wales and live here for at least 6 months before you qualify to apply for Bankruptcy.

When can you return to Ireland after going Bankrupt in England?

After you go bankrupt you do not have to stay in England/Wales. There is no legal requirement for you to remain here. As such you can return to Ireland the next day if you wish.

Having said that it is best to plan to remain for a few months at least. Your Bankruptcy will be managed by the Official Receiver (OR). Some ORs may prefer you to stay in England until you are discharged.

However if you believe that you will have better job prospects in Ireland or have other pressing reasons to move you cannot be forced to stay.

If you return to Ireland before you are discharged you are still obliged to keep in contact with the Official receiver and let them know if your income changes.

Will your Irish Credit Rating be affected?

When you go Bankrupt your credit rating in the UK will be negatively affected for 6 years. As a result you will find it difficult to apply for any kind of credit here during this period.

However if you are planning to move back to Ireland this will probably not bother you. The fact that you are Bankrupt in the UK is unlikely to be recorded on your Irish credit file.

Having said that the reason for going Bankrupt in England was that you had debt in Ireland that you were unable to pay. As such it is possible that your credit rating in Ireland will be affected anyway by these issues.

Credit reference agencies rarely have access to cross boarder information. As such if you have a poor credit rating in one country this will generally not affect your rating in another.

Can you moved from Ireland to Northern Ireland and then go Bankrupt?

Rather than moving to England or Wales to go bankrupt you may be wondering whether you could go to Northern Ireland. The answer is yes you can.

However you will have to move to Northern Ireland. You will need to be able to prove that your Centre of Main Interest has been in Northern Ireland for the greater part of the last 6 months normally with bank and rent statements.

Having said that one of the major downsides of Bankruptcy in Northern Ireland is that it is not so easy to move home afterwards. If you want to move back to Ireland during the 12 months you are Bankrupt you must first apply for permission from the Court.

If you go Bankrupt in Northern Ireland you are not allowed to leave the county until you are discharged without the permission of the Court.

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Should I go Bankrupt before I move Abroad? https://bankruptcyexpert.co.uk/articles/should-i-go-bankrupt-before-moving-to-another-country https://bankruptcyexpert.co.uk/articles/should-i-go-bankrupt-before-moving-to-another-country#respond Sat, 18 Apr 2015 16:07:27 +0000 https://bankruptcyexpert.co.uk/?p=437 If you have debt but want to move abroad Bankruptcy could solve the problem. Should you go Bankrupt before you leave? Getting credit in your new country.

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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.

Do you want help to go bankrupt? Give us a call (0800 044 3194) or complete the form below to speak to one of our experts

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 are moving to another EU country you must apply to go bankrupt before you leave. After changes to the Insolvency Act introduced in April 16 you lose the right as soon as you have moved.

Where you are going to a country outside the EU you do not need to go bankrupt before you leave. Under the Insolvency Act section 263 I(2) you can apply for bankruptcy in England & Wales for up to 3 years from the date you move. The application can be made online so you do not need to travel back to the UK.

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.

If you are planning to move to another EU country (excluding Denmark) you MUST go bankrupt before you leave the UK.

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. Where 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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Life Insurance and Bankruptcy https://bankruptcyexpert.co.uk/articles/bankruptcy-and-my-life-insurance-policy https://bankruptcyexpert.co.uk/articles/bankruptcy-and-my-life-insurance-policy#comments Tue, 16 Sep 2014 18:47:46 +0000 https://bankruptcyexpert.co.uk/?p=250 What happens to your life insurance if you go Bankrupt? How to keep the benefit of your policy. Should you cancel your insurance?

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If you go bankrupt you will lose the benefit of your life insurance policy. You will need to buy back your interest in the policy of you want to keep it.

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What happens to your Life Insurance Policy if you go Bankrupt?

Bankruptcy will have a serious affect on your life insurance policy. In the event of your death any payout from a policy that existed on the date of your Bankruptcy forms part of your Bankruptcy estate.

This means that the money paid out will automatically go to the Official Receiver (OR). It will then be used to pay off your debts and the additional costs of your Bankruptcy.

Only after all of your original debts, costs and statutory interest are paid will any remaining cash be handed back to the beneficiaries of your Will.

After you go Bankrupt any life insurance benefit in the even of your death is paid to the OR. You can protect against this by buying back the interest in your policy.

How to keep the benefit of your Life Insurance Policy after going Bankrupt

The simplest way to protect any future benefit from your life insurance policy is to buy back your interest from the Official Receiver. You can do this as soon as you go Bankrupt.

You will be required to pay a standard fee of £50. A letter will then be sent to you from the OR confirming that they have no further interest in the policy and any future payout should go to the named beneficiaries.

After you buy back the interest in your policy you must continue to pay the ongoing monthly premiums. You will be allowed to include a budget for this in your living expenses as long as they are not unreasonably high.

If you have multiple life insurance policies you will need to buy back the interest in any you wish to keep at the cost of £50 per policy.

Should you cancel your Life Insurance Policy if you go Bankrupt?

If you do not have the cash required to buy back the interest in your life insurance policy you could borrow it from a family member or friend. However if raising this sum is simply not possible an alternative option is to cancel the policy.

Once you are discharged there is nothing to stop you taking out a new policy. Because this will begin after you are discharged any benefit derived from it if you subsequently die would not form part of your bankruptcy estate. As such it will go directly to your beneficiaries and not the Official Receiver.

If you cancel your life insurance policy the benefit if you die will also be cancelled. Given this you should never decide to take this course of action unless you first get advice from a financial advisor.

If you cancel your life insurance policy it might be impossible for you to start a similar policy after you are discharged for the same monthly premium.

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