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Go bankrupt if I live in a different country

Published: 30 April 2024

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Are you already living in a different country but considering going bankrupt in the UK? Are you thinking moving abroad after you go bankrupt? This guide provides all the advice you need about your options and how bankruptcy will affect you if you live outside the UK.

Contents

Can you go bankrupt in the UK if you already live in a different country?

Going bankrupt to deal with outstanding debts in the UK is an option even if you are now living in a different country. You can use this option to write off your debt for up to 3 years after you left.

If you have already moved abroad, you may be struggling to maintain your UK debt payments. The reason for this may be because the job you thought you were going to get has fallen through. Alternatively, you may have simply underestimated the cost of living abroad.

You are not alone. Here at Bankruptcy Guide, we work with a lot of people who find themselves in this position.

Bankruptcy can be an ideal solution to solve your debt problem. This is because once you are bankrupt, you will not have to make further payments towards your debts if you can’t afford to. In addition, you don’t even need to return to the UK because you submit your application on line. After that, any necessary communication with the Official Receiver is done via e-mail or using an app such as MS Teams.

Since Brexit, it no longer matters if you now live in an EU country or elsewhere. You still have up to 3 years to submit your bankruptcy application.

If you are now living abroad, the only time applying for bankruptcy in the UK would not be possible is if you moved from Scotland. This is because you would need to move back to Scotland to be eligible to go bankrupt there.

What happens to your local credit rating?

If you go bankrupt in the UK, although your credit rating here is affected, your score in other countries is likely to remain the same.

Credit checks made against you in one country do not cross reference your credit file anywhere else in the world. As a result, you are likely to pass a local credit check because it does not reflect the fact you are bankrupt in the UK.

You should remember that as a bankrupt person, you should not borrow more than £500 without first declaring to the lender that you are bankrupt.

Can you move to a different country after you have gone bankrupt in the UK?

If you have already gone bankrupt in the UK, you are allowed to move to a different country and start living abroad if you wish.

There are no restrictions on moving abroad other than if you live in Northern Ireland (see below).

You don’t need any prior permission from the Official Receiver (OR). However, if you do leave the UK permanently, you will need to let them know. The easiest way to do this is to send an e-mail to the OR Central Case Team advising of the date you left the you and your new address.

It’s OK if you don’t yet have a permanent address in the country you have moved to. You just need to confirm that your e-mail address will remain valid for all correspondence. You can update them with your address as an when you know it.

If you start working after you have moved to a different country, you still have to let the OR know about this. They will then ask you to provide them with information about your local income and expenses budget.

You will still have to accept an Income Payment Agreement and make payments towards your debts in the UK if you have any surplus income.

We specialise in assisting people with bankruptcy who are planning to move abroad or who are already living in a different country. Contact us today for expert advice and assistance.

can you move to a different country after you have gone bankrupt

What if you went bankrupt in Northern Ireland?

After going bankrupt in Northern Ireland, the rules regarding travel to a different country are different.

Before you leave Northern Ireland for any reason, you first need to get agreement from the Official Receiver.

If you are travelling on holiday, there should be no issue because you are only leaving for a temporary period. But if you want to move and live abroad permanently, you may need permission from the court. You should first speak to the Official Receiver and they will advise you on what you need to do.

Could you get an Income Payment Agreement if you are living in a different country?

After you go bankrupt, the Official Receiver will review your monthly income and expenses budget. They do this to see if you have any surplus income which can be used to pay towards your debt. If so, you will be issued with an IPA – Income Payment Agreement.  

This applies whether or not you are currently living in the UK or are already living in a different county. If you decide to move abroad when you are already bankrupt, you will need to inform the OR about any resulting change to your income and expenses budget.

Where the change means you can now afford to make a monthly payment, it is likely you will then be required to start an IPA. You will have to transfer money back to the UK each month to pay this.

If you already have an IPA in place, but your move means that your surplus income has fallen or no longer exists at all, the payments will be suspended.  

Where you live abroad you will need to provide all your local income and expenses details converted into pounds.

Writing living expenses on page depicting calculating an income payment agreement when living in a different country.

Is it possible to go abroad on holiday when you are bankrupt?

The length of your bankruptcy will normally be 12 months. During this time you are free to travel abroad on holiday if you wish. Nobody will check at the border to confirm whether you are bankrupt or not.

This means that there is nothing to stop you travelling for a holiday or work. There is no need to inform the Official Receiver about this type of travel as your home address and contact details are not changing.

You can pay for the cost of your holiday yourself (if you can afford this) or a friend or family member can pay on your behalf.

Remember, if you live in Northern Ireland, you do need to get permission from the Official Receiver before you travel abroad for a holiday or work.

   Written by James Falla

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