UK Debt Management While Living Abroad

On this section of our website we are posting some of the questions that people email us from all over the world. Hopefully you will find the answer to a query that you may have. If not, leave a comment below and we will do our best to answer you.

Click here to return to the main Bankruptcy from Abroad FAQ area.

Debt management for UK debts while living overseas

Debt management is one of the options available to people living abroad when they are considering how to deal with their debts. In our opinion this solution works best for people that owe a smaller amount of debt-maybe up to £10,000 as a maximum however, there may be particular circumstances where it can be considered as a temporary solution when a person has a higher amount of debt.

If you are an expat living overseas and you have debts that remain outstanding in England, your best solution to deal with the debts may be dictated by what you can afford to do, and well as the amount of debt that you have. If you can only afford £50 per month to pay your creditors, then by using this as a regular payment you will at least keep the creditors from taking action and pursuing you for non payment of the debts.

How does debt management from abroad work?

When you enter into a debt management plan (also known as a DMP) you will, in most cases, use a professional debt management company. This Company will act on your behalf and once they have discussed your circumstances and income/expenditure they will contact your creditors for you and make an offer of payment. They will offer all of your creditors a set amount per month based on your income and expenditure and financial circumstances.

They will also try to get the creditors to freeze the interest and charges in relation to the debt, as if this does not happen your payment will have little or no impact upon the outstanding amount that you owe.

Once this amount has been agreed with your creditors you will then be asked to make regular monthly payments and as long as you maintain these payments you will have an active repayment plan set up with your creditors in the UK.

What are the benefits of entering into a debt management program while living overseas?

One major benefit in entering into a professional debt management program is that instead of making multiple payments from your account to individual creditors in the UK, you can make one single payment from overseas to the debt management company in the UK.

This payment is then split between your creditors and the individual payments are then made on your behalf by the debt management company. This can save you multiple charges from your bank as when you make an individual payment from overseas you will be charged every time. Just taking this into account means you could be saving money compared to your current situation.

Another benefit of using English debt management whilst living in another Country is that you have a professional Company to help you if your creditors are harassing you or friends or relatives back in the UK. Letters can be sent to you or to other people and if you have a good debt  management company they will then deal with these on your behalf.

In most cases if a creditor receives a regular payment they will not instruct a debt collection agent and they will not harass friends or family while looking for you.

Debt management from abroad versus bankruptcy from abroad

In some cases a person may have a high amount of debt, but in certain situations debt management could still be worth considering compared to filing bankruptcy from abroad.

For example, if a person has moved abroad and lives in an EU member state they will not be able to file bankruptcy in England while living in that EU member state (there are certain circumstances where this may be still be possible).

If that person lives in (for instance) Germany they can only file bankruptcy in Germany and this would clear their debts in England. The problem here is that a German bankruptcy can be very expensive and may last for seven years compared to the standard one year in a UK bankruptcy. In this type of situation it may be better for the person to reach a temporary agreement with their creditors and avoid filing bankruptcy in Germany; this way the creditors are kept reasonable happy as they receive a regular payment towards the debts that are outstanding.

If they then return to the UK they may wish to file for bankruptcy when their Centre of Main Interest changes from Germany back to the UK.

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