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?
Before 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!
But now you can apply from abroad using the online application form. And post-Brexit the rules are now the same whether you are living in the EU or elsewhere.
You do not have to be in England and Wales to apply for bankruptcy
In 2016, the Insolvency Service replaced the court process with an online bankruptcy application. This is described in detail in How to complete the online bankruptcy form.
You don’t have to be physically present in England or Wales to submit an online application for bankruptcy. But there still is a check that this is the right place for you to go bankrupt.
The Insolvency Service system will detect when an application is made from abroad. The Adjudicator, who makes the decision on accepting/refusing your bankruptcy will need to confirm you meet an eligibility test before they can process it.
Before 2021 there were separate rules for applications from EU countries. Post-Brexit, there is now just a single test whenever you live.
You are eligible for bankruptcy in England and Wales:
- if you live in England and Wales (in other words you are just temporarily abroad) OR
- if you have been ordinarily resident in England or Wales or, had a place of residence there or have carried on business there at any time in the three years preceding your application.
National Debtline has a good factsheet on this: Bankruptcy and foreign issues.
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.
Will bankruptcy in England hurt my credit in my new country?
International links between credit reporting agencies or systems are not at all common. But I can’t say it’s impossible. You could ask on ex pat forums in your country – if no one has come across any links there may well not be any.
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.
So take some good debt advice! You can phone National Debtline from abroad on +44 121 227 4780 or use their webchat which is very good – you talk real debt advisers.
They can check first that your application from abroad is likely to be accepted. And secondly that bankruptcy is a good option for you.