A reader asked:
We are moving to Queensland, Australia very soon to live with family. We are both pensioners with no savings or assets and my husband has very large debts from a business failure a couple of years ago. We are hoping that once we get there we could get the money together for his bankruptcy fees. Will he be able to use the online application and file for bankruptcy?
Until April 6 2016, if you had left the country and wished to go bankrupt in England, your bankruptcy petition had to be presented in the High Court in London. So either you had to return to England or you had to appoint someone with Power of Attorney to do this for you – there are various firms that specialise in this. Added to the high bankruptcy fees, either of these options was very expensive!
The new application
In April, the Insolvency Service replaced the court process with an online bankruptcy application – see How to complete the online bankruptcy form for details.
This online application can be used from outside England and Wales. The Insolvency Service system will detect if an application is submitted from abroad and the Adjudicator will need to confirm you meet an eligibility test before they can process it.
If you apply from a non-EU country, you are eligible if:
- you live in England and Wales (in other words you are just temporarily abroad) or
- you have been ordinarily resident in England or Wales or, had a place of residence there or have carried on business there at anytime in the three years preceding the application
If you apply from an EU country, you are eligible if:
- your centre of main interest (COMI) is in England and Wales
COMI is a complicated subject – some details here and here. The aim is to try to prevent EU citizens from “forum shopping” and choosing to go somewhere because they prefer the rules there. If you are concerned whether this will affect you, you need to take professional advice. It is sometimes said that if you have lived in Britain for a long while and are just moving to an EU country, you have three months in which to apply to go bankrupt back in England.
So good news for the reader emigrating to Australia
This is very good news for the person who asked the question above.
Once he has submitted his application, he may be contacted by the Adjudicator to confirm where he was living in England. He could prepare for this by thinking what he could email as evidence showing that he was living in the UK – this could include his last P45, letters from HMRC, a tenancy agreement, a council tax statement with his name on it.
I think he should assume that it will take longer than the Adjudicator’s target two working days to approve his application – and not worry if he doesn’t hear back quickly.
But is this a good idea?
Just because you can now apply to go bankrupt easily from outside the UK doesn’t mean that bankruptcy is necessarily a good option for you.
Your income and assets outside the UK will be included in your bankruptcy. You may have to make monthly payments for three years if you have sufficient disposable income. And you need to be sure whether bankruptcy will have any effect on any visa or nationality applications you make. Take some good debt advice!