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!
The new application
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 now don’t have to be physically present in England or Wales to submit an online application for bankruptcy. The Insolvency Service system will detect when an application is made from abroad and the Adjudicator will need to confirm you meet an eligibility test before they can process it.
There are different eligibility tests depending on where you have moved to.
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. The aim is to try to prevent EU citizens from “forum shopping” and choosing to go bankrupt somewhere because they prefer the rules there.
In June 2017, the Insolvency Regulations were changed to introduce a “look back” period. If you have recently emigrated to an EU state:
- if you have a business and you have moved to another EU country, you can still go bankrupt in England and Wales for three months;
- if you do not have a business, you have a six month window in which to go bankrupt back in England and Wales;
- after these three or six month periods your COMI is assumed to be in the EU state you have moved to.
If you are concerned about how this will affect you, you need to take professional advice.
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.
So take some good debt advice! You can phone National Debtline from outside the UK.