Declaring UK Bankruptcy from Europe with UK debts

Are you living in a European Country with UK debts? If you previously lived in England or Wales but have now moved to Europe, you may be eligible to file bankruptcy from abroad subject to certain conditions. Prior to BREXIT, the UK Law in relation to filing bankruptcy from European member states and non-member states was very complicated and, in most cases, your bankruptcy application would not be accepted. After BREXIT, the bankruptcy laws have now changed after new insolvency legislation was introduced, and this has opened the doors to filing bankruptcy from the EU.

When considering filing bankruptcy from a European Country in England, three important points to consider are where you previously lived in the UK, how long you lived at this address, and the date that you moved abroad. Insolvency laws in England and Wales differ to the laws that apply to Scotland and Northern Ireland, so much will depend on your last UK address.

Before BREXIT, if you had moved to one of the 27 member states within the European Union, a UK bankruptcy application would normally have been refused and you would have been directed to your local European Court to file your Bankruptcy. There may have been exceptions to this rule if your centre of main interest could have been proven to be within England or Wales.

Bankruptcy laws in European Countries vary depending on where you live, but as an example if you live in Germany and file for Bankruptcy, you could be in Bankruptcy for three years compared to one year if you file for Bankruptcy in England or Wales. For this reason the UK saw a rise in Bankruptcy Tourism where (for instance) a German resident may move to England thus changing their centre of main interests from Germany to England. Once the centre of main interest has changed, a European Citizen may apply for Bankruptcy in England and benefit from a much shorter Bankruptcy duration.

Time limits in UK Bankruptcy when moving abroad

If you move overseas after living in England or Wales, you normally have a time limit of three years in which to file for bankruptcy. This now applies to all Countries around the world. Once you exceed the three-year time limit, your bankruptcy application will normally be refused by the Bankruptcy Adjudicator.

This can be a complex area of bankruptcy. Have you moved abroad if you are on a working holiday visa? If you are travelling around Europe, does the date that you left the UK apply to this law? If you are in a “grey area” in relation to moving, feel free to contact us for further advice.

If you have exceeded the three-year time limit, filing for bankruptcy in the UK is still possible but only if you move back to the UK. A person can re-establish what is called their Centre of Main Interest (normally abbreviated to COMI) after a period of time. Once a person has lived at an address for between three to six months, it can be agreed that a person is living in that Country and filing for bankruptcy becomes possible. However, this can be slightly complex as having just an address would not qualify an individual for bankruptcy. A person must be living “properly” at that address and evidence of expenditure, income and general living costs would be requested to prove that the residence is constant and not just a basic address in the UK.

Normally there is nothing to stop you returning to the European Country that you have lived in, after the bankruptcy has been approved in the UK. You must, of course, deal with any enquiries that the Official Receiver has before you do this, but if you are clear in your intentions there should be no problem doing this. While bankrupt you are under obligation to inform the Insolvency Service of any change of address, so if you intend to move back to Europe you must contact the Insolvency Service to discuss this situation.

If you are unsure how these rules may apply to your situation please feel free to complete our short application form and an advisor will contact you to discuss your circumstances.

Will declaring bankruptcy in England affect me in Europe?

Many people ask if their assets and income will be affected in Europe if they file for bankruptcy in the UK.

The general rules in bankruptcy are the same no matter where you are living at the time of the bankruptcy. Any property that you own may be seen as an asset and even if the property is in France or Germany (for instance) the asset is not out of reach of the Official Receiver and the Insolvency Service. Much will depend on the level of equity within the property as recovery of an overseas asset is a complex and expensive process.

Any income that a person has will also be considered by the examiner that deals with your bankruptcy. It is very common in bankruptcy to be asked to make payments back to the Official Receiver. This is based on any surplus income that a person has left after paying their reasonable living expenses and is known as an Income Payment Agreement or an Income Payment Order. These payments will normally last for a period of three years.

Feel free to speak with one of our advisors or complete our short questionnaire.