Going to Britain to declare personal bankruptcy

JimiTime

Not sure if this is the right place for the thread, but I'm wondering if anyone has any non-judgemental knowledge on this? Or even better, experience of it?

From what I hear, you need to be resident there 6 months to apply, and if granted, the bankruptcy lasts a year?

So if one has a large debt in this state, and moves to England, and cannot sustain the debt, is it as simple as after a year of bankruptcy, the debt cannot be called in? I've heard that EU legislation means that an EU state has to recognise bankruptcy from another EU state.

It sounds much too easy, so I assume I have a very ignorant view of the whole thing. Currently weighing up worse case scenarios in the event of financial meltdown, and want to know all my options.

tenchi-fan

Is the debt property related? This can make the process more complicated.

Bar that, if you are considering declaring bankruptcy I'm sure there are specialist lawyers who you should use for legal advice.

There are plenty of sources and articles online on the process. Google is your friend.

If you are thinking of proving you've moved your life to England you should put the wheels in motion as soon as possible. Start using an address as your main residence, open a bank account using that address, get a few bills in your name, sign a lease, and get a job over there. Providing you can show your income cannot sustain the debt you're expected to repay you may be able to declare bankruptcy.

Monty Burnz

I'm not sure this is the right forum for this discussion if you want personal advice Jimi, but if your situation is as you have outlined here - that you can pay, but don't really want to as you are in negative equity - then I would say that in a moral sense it's a very bad move. If we leave morality aside, I can't offer much practical advice, but I would make a point that I've made before - you must realise that if you default on your mortgage like this, the odds of you or your wife ever getting access to mortgage credit in future are very slim indeed. And if you do, it will be from a sub-prime lender who will charge you perhaps twice as much for the privilege.

Do factor in the increased cost of all your credit in future into any decision you might make - you may not be saving yourself nearly as much money as you hope or expect.

JimiTime

tenchi-fan wrote: »

Is the debt property related? This can make the process more complicated.

Yeah. How does that make it more complicated?

Bar that, if you are considering declaring bankruptcy I'm sure there are specialist lawyers who you should use for legal advice.

Yeah, I know that, I'm hoping it wont come to it, but I'm just putting the feelers out. Seeing what all the options are.

There are plenty of sources and articles online on the process. Google is your friend.

Again, I know that, but theres no harm in asking.

If you are thinking of proving you've moved your life to England you should put the wheels in motion as soon as possible. Start using an address as your main residence, open a bank account using that address, get a few bills in your name, sign a lease, and get a job over there. Providing you can show your income cannot sustain the debt you're expected to repay you may be able to declare bankruptcy.

Wont be an issue. Have you any experience with it?

JimiTime

Monty Burnz wrote: »

I'm not sure this is the right forum for this discussion if you want personal advice Jimi, but if your situation is as you have outlined here - that you can pay, but don't really want to

No, as outlined in that piece, the time is coming when we can't pay. Rates too high now, so as soon as TRS ends, we is knackered. 6.19% with PTSB. If they come down in line with other state owned banks to 3. odd, we'll be fine. If they don't, then its bye bye house, hello homelessness and massive negative equity debt.

- then I would say that in a moral sense it's a very bad move.

Again, I don't really care about the moralistic argument. The government and the banks have been and are continuing to be immoral in this mess, so any right to some kind of moral argument is forfeit. I'm not going to argue that, its how it is. People are free to disagree, and I'm free to do what I can to stop my family becoming the victims of debt slavery. And people have a right to disagree with me. I just don't want to argue about it on this thread.

If we leave morality aside

Gladly. No point in arguing over our opinions of whats moral and whats not. I'm just looking to see all the options.

, I can't offer much practical advice, but I would make a point that I've made before - you must realise that if you default on your mortgage like this, the odds of you or your wife ever getting access to mortgage credit in future are very slim indeed. And if you do, it will be from a sub-prime lender who will charge you perhaps twice as much for the privilege.

I NEVER got a loan before my mortgage, i have NO other debt, and I fully intend to NEVER get one again. So thats not an issue for me.

Do factor in the increased cost of all your credit in future into any decision you might make - you may not be saving yourself nearly as much money as you hope or expect.

Credit? As in, buying cars, or using credit cards etc? If so, its not an issue. I don't use it anyway. TBH though, I don't think anything could be worse, in the context of this issue, than being homeless with two kids under 3 and still being in €160000 (ever increasing with the fall in house prices) worth of debt.

Thanks for the input though.

tenchi-fan

JimiTime wrote: »

Yeah. How does that make it more complicated?

Because the UK court has no jurisdiction over Irish property. The banks will be reluctant to start proceedings if they know you'll go abroad with your unsecured debt and could tie things up a lot longer than the 6 months you'd be resident in the UK before you could start bankruptcy proceedings.

Edit: PS I think banking&insurance, or legal discussion are more appropriate forums for your issue. There's also a website called askaboutmoney which can be useful, but if you mention "property prices" you're likely to get a permanent ban

How much is your house worth, what are monthly repayments and how much is left on your mortgage?

Monty Burnz

tenchi-fan wrote: »

Because the UK court has no jurisdiction over Irish property. The banks will be reluctant to start proceedings if they know you'll go abroad with your unsecured debt and could tie things up a lot longer than the 6 months you'd be resident in the UK before you could start bankruptcy proceedings.

Edit: PS I think banking&insurance, or legal discussion are more appropriate forums for your issue. There's also a website called askaboutmoney which can be useful, but if you mention "property prices" you're likely to get a permanent ban

I wonder what would happen if the banks deliberately did not pursue bankruptcy proceedings for a year or two or ten? When you came back to the country, you might be out of bankruptcy, and then have the bank ask you for their money back.

I don't know if that's possible, just throwing it out there.

Maura74

Read the T&C of your mortgage and see what it says about no payment, I think you would be better off talking to your lender and see what help they can give you.

Surely they would not make you homeless with young children. Also get advice from your TD and councillors for your area. These people are aware of the problems that some families are going thought and they should offer all the help that is available to you.

BTW, I think bankruptcy stays for 3 years in UK.

Best of Luck

Slydice

Is that right? Sounds like a great idea.... like you could Wipe out your debts and start being not bankrupt again after 2 years which is a huge contrast to the 12 years I think it lasts in Ireland.

mm_surf

Slydice wrote: »

Is that right? Sounds like a great idea.... like you could Wipe out your debts and start being not bankrupt again after 2 years which is a huge contrast to the 12 years I think it lasts in Ireland.

They would also wipe out any assets you have too. Once the baliffs leave, you'll have literally the minimum left.
Car only if public transport can't get you to work.
Only enough chairs around the kitchen table to match the number of peopel in the house, that sort of thing.

No jewelery, no DVDs, no playstations/xbox, no ornaments, no books, no rugs, no cushions, no pictures on the walls, nothing.

The system is very different over there compared to here. Find "Beat the baliff" TV show - that'll give you an indication of what to expect.

Obviously I've no personal experience of this, so I'm no expert. But from what I gather, to be declared bankrupt in the UK you would literally have to be down to the bare essentials.

M.

tenchi-fan

mm_surf wrote: »

to be declared bankrupt in the UK you would literally have to be down to the bare essentials.

No need for scaremongering. The UK is slightly more civilised than what we have going on in Ireland at present.

http://www.purnells.co.uk/bankruptcy-and-ivas/bankruptcy/the-implications-of-a-bankruptcy-order/section-283-of-the-insovlency-act-1986.html

SECTION 283 OF THE INSOLVENCY ACT 1986
(2) Subsection (1) does not apply to-

(a) such tools, books, vehicles and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation;

(b) such clothing, bedding, furniture, household equipment and provisions as are necessary for satisfying the basic domestic needs of the bankrupt and his family.

The bolded piece would include low value cars and usually a tv set.

JimiTime

Thanks for all the input guys. Hopefully it wont come to something like this. I'd love to stay in our/the banks house, but it will certainly be impossible soon:(

I have already written to my local TD, who's also a minister, and to the Taoiseach and Minister Noonan. I've just been given the usual pleasantries and referred to the Kean report. I've asked if there were any plans to bring PTSB in line with other lenders in terms of their rates, as this would mean we could continue to pay our mortgage. Unfortunately, they didn't bother even answering that question. *Shrugs* Its now counting down to May 2014, hoping PTSB don't hike the rates even more in the meantime(6.19% currently), and hoping that something of substance is done by then that will save us from the nuclear option.

We got a mortgage for €300,000, for a house "worth" €340,000. Have €280,000 to pay off, house is now valued at about €140,000. After TRS runs out, and assuming the rate of 6.19% stays the same, then our repayments will be almost €1800 per month. This will be completely unsustainable for us. Combined with the new taxes and charges, pay cuts, increased price of living/fuel etc. *sigh*, if I only had a time machine. Ye know things are bad when your thinking, 'Bankruptcy sounds like a great option'. Just imagine those poor souls from the priory in Donamede, what an utter mess our beautiful little country is in:(

meglome

I thought I read elsewhere that you have to be resident in the UK for at least six months to go bankrupt. Anyone know? (Not that I'm advocating skulking off to the UK to actually do it).

mm_surf

tenchi-fan wrote: »

No need for scaremongering. The UK is slightly more civilised than what we have going on in Ireland at present.

http://www.purnells.co.uk/bankruptcy-and-ivas/bankruptcy/the-implications-of-a-bankruptcy-order/section-283-of-the-insovlency-act-1986.html



The bolded piece would include low value cars and usually a tv set.

Yes, I mentioned all of that. Hardly scaremongering. But be under no illusion, anything not exempted in the bankruptcy legislation is fair game - even household pets!
Some people may have the impression that they won't have any consequences from declaring bankruptcy in the UK, i.e. no lifestyle changes need be made.

Might be a bit of a shock to them when little Johnny's playstation is being packed off to auction.

M.

JimiTime

meglome wrote: »

I thought I read elsewhere that you have to be resident in the UK for at least six months to go bankrupt. Anyone know?

Thats true, and must show that your life is based there, like income etc. Have English connections, so wont be too difficult.

sarumite

meglome wrote: »

I thought I read elsewhere that you have to be resident in the UK for at least six months to go bankrupt. Anyone know? (Not that I'm advocating skulking off to the UK to actually do it).

A few years back when I was still living in the UK a friend of mine declared bankruptcy. He had to show he was resident for 6months (He was living there his whole life, so that wasn't a problem) and that he was unable to pay his debt. Back then it was 3 years (since then they changed the law to 1 year). I remember that he was was also required to show that he had made every effort to pay his debt during the time.

JimiTime

mm_surf wrote: »

Yes, I mentioned all of that. Hardly scaremongering. But be under no illusion, anything not exempted in the bankruptcy legislation is fair game - even household pets!
Some people may have the impression that they won't have any consequences from declaring bankruptcy in the UK, i.e. no lifestyle changes need be made.

Might be a bit of a shock to them when little Johnny's playstation is being packed off to auction.

M.

TBH, its hardly a scarey prospect anyway. 'Oh no, you have no more playsation....oh wait, but now you have a future'. We're not possession heavy, so we don't have that much to lose. Have to say though, even if someone was possession heavy, it would wanna be some very, very valuable possessions to make them think twice. Sure whats to stop them giving anything of value to members of their families anyway? Isn't that what all those in the know did in terms of their big assets, like putting houses in their brothers name etc? Think of how simple it would be for someone to give the playstation to the bro until things blew over as it were.

Welease

JimiTime wrote: »

TBH, its hardly a scarey prospect anyway. 'Oh no, you have no more playsation....oh wait, but now you have a future'. We're not possession heavy, so we don't have that much to lose. Have to say though, even if someone was possession heavy, it would wanna be some very, very valuable possessions to make them think twice. Sure whats to stop them giving anything of value to members of their families anyway? Isn't that what all those in the know did in terms of their big assets, like putting houses in their brothers name etc? Think of how simple it would be for someone to give the playstation to the bro until things blew over as it were.

You can check the specific details on the relevant sites, but transferral of assets is not allowed within a specific period before requesting bankruptcy.. I have a feeling the term is 12 months or so, but am open to correction.

From the site http://bankruptcy.org.uk/archives/item/6346-can-i-transfer-property-prior-to-going-bankrupt

"transferring any assets or property prior to going bankrupt can be perceived as fraud or trying to hide an asset. It is not advisable.

Also, paying back a family member prior to going bankrupt would be viewed as preferring them over your other creditors and in bankruptcy this is not allowed.

The Receiver in bankruptcy does have the authority to reverse all these transactions and if need be chase the other person for the property or money, and in extreme situations make them bankrupt. "

tenchi-fan

mm_surf, the simple solution there is to lease a furnished property in the UK. Not all rental properties are in the shabby state of disrepair that most properties at the lower end of the market are.

If the op was considering bankruptcy, it would make sense to rent a nice property in order to maximise outgoings and prove that he was unable to finance his debts.

Also, the ops kids are under 3 years old so I'm sure they don't have playstations.

Op, You should probably try to chill a bit. 2014 is a long way off. Interest rates could fall, TRS could be extended, you could get a payrise, your wife could get a better job.. or if she stays at home, she could possibly run a daycare centre during the day when your own kids are at school. I also think you're over-estimating the amount of value your house lost.

Packing up and moving to England to declare bankruptcy is a bit drastic but it does have some merit. Just don't expect tax and bills to be any lower over there, and understand that there is still risk involved (e.g. the risk of a long, drawn-out process) in going down the bankruptcy route.

Also, you might notice I said England instead of Northern Ireland.. Northern Ireland doesn't necessarily follow the same precedent as England.

Maura74

Perhaps this site maybe helpful, it deals with oversea debts and other stuff.
worth a look.

http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?266-Overseas-Debt-Overseas-Account-issues&

Monty Burnz

JimiTime wrote: »

TBH, its hardly a scarey prospect anyway. 'Oh no, you have no more playsation....oh wait, but now you have a future'. We're not possession heavy, so we don't have that much to lose. Have to say though, even if someone was possession heavy, it would wanna be some very, very valuable possessions to make them think twice. Sure whats to stop them giving anything of value to members of their families anyway? Isn't that what all those in the know did in terms of their big assets, like putting houses in their brothers name etc? Think of how simple it would be for someone to give the playstation to the bro until things blew over as it were.

Basic morality? Don't we distinguish between good and evil anymore? I don't understand how people can rail against the developers and the senior bank management (at least, that's who I imagine 'bankers' refers to) and then advocate everyone else behaving the same. If you think it's right for everyone else, then stop moaning about others that did it - you've lost your right to complain about them.

pog it

JimiTime wrote: »

Not sure if this is the right place for the thread, but I'm wondering if anyone has any non-judgemental knowledge on this? Or even better, experience of it?

From what I hear, you need to be resident there 6 months to apply, and if granted, the bankruptcy lasts a year?

So if one has a large debt in this state, and moves to England, and cannot sustain the debt, is it as simple as after a year of bankruptcy, the debt cannot be called in? I've heard that EU legislation means that an EU state has to recognise bankruptcy from another EU state.

It sounds much too easy, so I assume I have a very ignorant view of the whole thing. Currently weighing up worse case scenarios in the event of financial meltdown, and want to know all my options.

Hiya JimiTime. Have you heard about FLAC? Free legal advice centre. I had to use it before to find out something/straighten out some facts and I got the answer I needed.

There is also a free financial advice centre run by same group. Think it's accountancy/business related more so than personal finance, but I'm not sure about that. Should be worth investigating!

JimiTime

Monty Burnz wrote: »

Basic morality?

That may well stop people doing certain things alright, but in practical terms, the point is that theres nothing stopping people from giving their stuff to someone else. Things like houses etc will obviously be more complicated, but in terms of basic possessions, the point is that its quite easy to give your kids 'playstation' to your bro.

Don't we distinguish between good and evil anymore?

Some people just see it as being shafted by the system, failed by the justice system, and let down by the government. I think the victims of the Priory fiasco for instance have suffered a great injustice. One can have ideas of right and wrong, but I certainly wouldn't start judging them if they worked the system to minimise the impact the injustice they are suffering is causing.

And thats even before we ask what IS good and evil. But we're not here to talk about what is and isn't moral.

Again, thanks for the input.

Monty Burnz

JimiTime wrote: »

Again, thanks for the input.

Cheers. I'm doing my best to get people to see that when they dump their debts on the rest of us, it's the most vulnerable in society who will pay the price. I'm sure people will come up with all sorts of elaborate justifications, but those who opt not to pay back their debts (as opposed to those who simply aren't able to) should know exactly what choice they are making.

Good luck with it.

JimiTime

tenchi-fan wrote: »

Op, You should probably try to chill a bit.

Just collating info tenchi-fan:) I always like to know what the worst case scenario is. Definitely hoping it wont come to something like this, but will start planning for such a scenario until I see a REAL effort from government to deal with the issue.

Packing up and moving to England to declare bankruptcy is a bit drastic but it does have some merit. Just don't expect tax and bills to be any lower over there, and understand that there is still risk involved (e.g. the risk of a long, drawn-out process) in going down the bankruptcy route.

Its certainly not desirable, as I said, its more worst case scenario. My family would be better off having a few years of hardship in terms of bankruptcy (especially while my kids are so young), than a lifetime of unsustainable debt.

Appreciate the input, and hopefully I'll never need to do it.

Daidy2011

Jimi, I saw this on the Irish Homeowners Unite facebook page and thought it might be of interest to you.

Cannot vouch for the veracity of the piece but I am guessing that they would not have posted it had it not been accurate.

Text below:


We received the following letter from an IHU memeber and they have given their permission for us to post the letter on this page in the hope that it might be helpful to others. We thank them for such generosity of spirit -

We bought a house in 2007 for 295k with a joint salary of 52k. By 2010 my husbands new business had failed, i was down to a 3 day week and we had a new baby. Crippled with ...mortgage repayments, business loans, credit cards, credit union and with no assistance from welfare as my husband was self employed we decided to move to my husbands hometown in the UK where we were declared bankrupt. All of our loans, mortgage everything was wrote off in a few minutes of a court sitting. We had already packed up our home in dublin which was in 50% negative equity and started to rent a house in the UK. 15 months later we are back living in Dublin renting a house in a location we love and couldn't be happier. It's not ideal for some people who don't want to lose their family home but it was the ideal solution for us. I really feel the option of bankruptcy saved our lives we were in such a dark hole of despair. We have now been discharged, it will stay on our credit history for 6 years but have no intention of ever attempting to get back on the property ladder and we now save for rainy days instead of using credit.

Monty Burnz

Daidy2011 wrote: »

We have now been discharged, it will stay on our credit history for 6 years but have no intention of ever attempting to get back on the property ladder and we now save for rainy days instead of using credit.

It's a pity that some people need to go bankrupt owing hundreds of thousands before learning this basic common-sense lesson.

JimiTime

Daidy2011 wrote: »

Jimi, I saw this on the Irish Homeowners Unite facebook page and thought it might be of interest to you.

Cannot vouch for the veracity of the piece but I am guessing that they would not have posted it had it not been accurate.

Text below:


We received the following letter from an IHU memeber and they have given their permission for us to post the letter on this page in the hope that it might be helpful to others. We thank them for such generosity of spirit -

We bought a house in 2007 for 295k with a joint salary of 52k. By 2010 my husbands new business had failed, i was down to a 3 day week and we had a new baby. Crippled with ...mortgage repayments, business loans, credit cards, credit union and with no assistance from welfare as my husband was self employed we decided to move to my husbands hometown in the UK where we were declared bankrupt. All of our loans, mortgage everything was wrote off in a few minutes of a court sitting. We had already packed up our home in dublin which was in 50% negative equity and started to rent a house in the UK. 15 months later we are back living in Dublin renting a house in a location we love and couldn't be happier. It's not ideal for some people who don't want to lose their family home but it was the ideal solution for us. I really feel the option of bankruptcy saved our lives we were in such a dark hole of despair. We have now been discharged, it will stay on our credit history for 6 years but have no intention of ever attempting to get back on the property ladder and we now save for rainy days instead of using credit.

Thank you a lot for the post. Something like this is EXACTLY what I need to hear about. Appreciate it.

Monty Burnz wrote: »

It's a pity that some people need to go bankrupt owing hundreds of thousands before learning this basic common-sense lesson.

I would politely ask if you could refrain from such postings here. There are countless numbers of threads where people can talk about how stupid/lacking in sense etc, mortgage holders in trouble are. It would be nice if we could stick to info sharing on the OP. Even if you believe what you do, its a very sore point for the many who are sufferring from it. The last thing they want to hear is how stupid they were/are etc. A little bit of tact would be great.

Again, just a polite request Monty.

Monty Burnz

JimiTime wrote: »

I would politely ask if you could refrain from such postings here. There are countless numbers of threads where people can talk about how stupid/lacking in sense etc, mortgage holders in trouble are. It would be nice if we could stick to info sharing on the OP. Even if you believe what you do, its a very sore point for the many who are sufferring from it. The last thing they want to hear is how stupid they were/are etc. A little bit of tact would be great.

Again, just a polite request Monty.

I acknowledge your polite request, but I'd like to reserve the right to point out the downsides of the various courses of action that are suggested here, both for the person seeking to escape their debts and for our society and the economy at large.

This is the Irish Economy forum - I'd suggest that if you'd like to start a thread where there's no discussion of the wider issues of such a course of action, the 'Personal Issues' forum might be more appropriate.

JimiTime

Monty Burnz wrote: »

I acknowledge your polite request, but I'd like to reserve the right to point out the downsides of the various courses of action that are suggested here, both for the person seeking to escape their debts and for our society and the economy at large.

This is the Irish Economy forum - I'd suggest that if you'd like to start a thread where there's no discussion of the wider issues of such a course of action, the 'Personal Issues' forum might be more appropriate.

Again, I realise I can't demand anything, which is why I asked you. You are of course free to ignore my polite request.

I'm trying to equate "It's a pity that some people need to go bankrupt owing hundreds of thousands before learning this basic common-sense lesson."
with
"I'd like to reserve the right to point out the downsides of the various courses of action that are suggested here, both for the person seeking to escape their debts and for our society and the economy at large."

Your input regarding the pitfalls of the OP is welcome and noted, but the post I objected to had nothing to do with such things. I'm sure you can see that and understand.

maninasia

mm_surf wrote: »

They would also wipe out any assets you have too. Once the baliffs leave, you'll have literally the minimum left.
Car only if public transport can't get you to work.
Only enough chairs around the kitchen table to match the number of peopel in the house, that sort of thing.

No jewelery, no DVDs, no playstations/xbox, no ornaments, no books, no rugs, no cushions, no pictures on the walls, nothing.

The system is very different over there compared to here. Find "Beat the baliff" TV show - that'll give you an indication of what to expect.

Obviously I've no personal experience of this, so I'm no expert. But from what I gather, to be declared bankrupt in the UK you would literally have to be down to the bare essentials.

M.

SNORE....everybody will just clear out anything valuable before baillifs arrive, kindergarten stuff!