Going bankrupt when you move overseas
If you’re planning to move out of the UK and start a new life in another country, it makes sense to get your finances in order before you go. Most people have bank accounts, loans, credit cards and other debts that need to be dealt with before they can move abroad.
In an ideal world, you would repay all of your unsecured debts before you leave the UK. But for many people, repaying everything they owe simply isn’t an option. That means you need other ways of dealing with your debts before you move on.
When someone goes bankrupt in the UK, the majority of their debts are effectively wiped clear. Bankruptcy lasts for one year in most cases. After that, the individual becomes a discharged bankrupt. After six years, the bankruptcy is removed from their credit report.
For some people, bankruptcy makes sense because it does not affect their credit file in their new country of residence but there are other implications.
Bankruptcy isn’t a way to remove all responsibility for your debts. The court in the UK may ask you to repay money from your salary towards the amount you owed, and if you fail to cooperate, you could find yourself being registered bankrupt for as long as 15 years.
But for many people, bankruptcy allows them to start again with a clean slate.
How Bankruptcy Works
You’ll need to pay a fee to go bankrupt, plus any associated charges, and this can be quite a lot of money. If you apply while outside the UK, you’ll have to find even more cash to pay the extra fees. The Official Receiver will expect you to keep in touch, so you will need to give them your new address.
Should you need to return to the UK, you may experience difficulty getting mainstream credit for a number of years.
Alternatives to Bankruptcy
Before deciding what to do, seek bankruptcy advice from Varden Nuttall.
You may wish to consider repaying your debts in instalments or setting up a debt management plan.
Whatever you do, speak to a professional, and don’t move overseas until you’ve taken care of your debts at home.