Should you wish to apply for bankruptcy in the UK then you will have to do this in person at an English or Welsh County Court. This is only possible for the first three years’ in which you reside abroad, however if you are within the EU this period is three months otherwise you will need to apply for bankruptcy using the procedures of your resident country.

If you live in an EU member state, except Denmark, then you will able to declare yourself bankrupt in the country where your main interests are based. If this is the UK then you can apply for bankruptcy there in person at an English or Welsh Court. When declaring yourself bankrupt you must present your petition in person or via a solicitor. Should you ask someone to act on your behalf then you will most likely need to grant them power of attorney.

It is possible that your bankruptcy may not be fully recognised in the country that you are now living in and your creditors may still be able to take action against you.

Will bankruptcy affect my assets abroad?

A bankruptcy order will affect your assets abroad, but this will all depend upon where they are and if you have at some point had a business in another EU state. If you have any assets in Denmark or non EU countries then these will be part of your bankruptcy estate in the UK.

Do debts owed to foreign creditors fall into my bankruptcy?

Any creditors that you have, no matter where they are, will be able to claim in your UK bankruptcy. A foreign creditor will not be prevented from recovering debts against you in their own country.

Does a foreign bankruptcy order have any effect in England and Wales?

The effect of a foreign bankruptcy order will depend upon the country in which you are experiencing bankruptcy proceedings. If your centre of main interests is in another member of the EU, but not Denmark, then the trustee will have authority to deal with all assets within the EU. With regards to any bankruptcy restrictions, these are dependent upon foreign legislation that governs the bankruptcy.

It is worth noting that any debts that you have in the UK will remain on your credit reference file for six years after the last activity on the account. Any bankruptcy orders will also be on your file for six years or sometimes longer.

The following relates to bankruptcy in England/Wales

How long does Bankruptcy last?

A bankrupt may be discharged (freed from obligations under the bankruptcy order) after the one year.

Discharge is not necessarily automatic and can be postponed by the Court. In addition, the discharge may not necessarily free that person from certain all liabilities and does not mean that unrealised assets will be safeguarded.

Discharge releases the bankrupt from most of the debts owed at the date of the bankruptcy order. Exceptions include debts arising from fraud, certain crimes and fines. Certain other debts such as damages or personal injury or money owed under family proceedings (such as maintenance) will be released only if the Court agrees.

If you have been declared bankrupt before, within the last 15 years, you will not be automatically discharged. You will only be able to apply to the Court for a discharge 5 years after the date of your current bankruptcy order; even then the Court may refuse or delay discharge.

How much will it cost to make myself bankrupt?

There are three fees you may have to pay:

The Court fee of £120

In some circumstances the Court may waive this fee; for example, if you are on Income Support. If you are not sure whether you qualify for a reduction in the fee, or if you are exempt from paying the fee, Court staff will be able to advise you.

The deposit of £250 towards the costs of administering your bankruptcy.

This deposit is payable in all cases.

The fee to swear the statement of affairs.

In a County Court, no charge is made to swear the affidavit, which is part of your statement of affairs. But in the High Court or before a solicitor there is a £7 charge.

If you are a married couple and you are both applying for bankruptcy, you will each have to pay separate fees. If you were in business as a partnership, each partner will have to pay separate fees, unless all the parties apply for a joint bankruptcy petition under the Insolvent Partnerships Order 1994 (Form 16).

The above fees should be paid in cash, postal orders, or by a building society, bank or solicitor's cheque. Cheques should be made payable to H M Paymaster General. Personal cheques will not be accepted.

What is the Bankruptcy process?

A Court makes a bankruptcy order only after a bankruptcy petition has been presented. It is usually presented by:

Yourself (Debtor's Petition); or

Creditors who are owed at least £750 by you (Creditors' Petition)

A bankruptcy order can still be made even if you refuse to acknowledge or agree to the order. You should therefore try to co-operate fully once the bankruptcy proceedings have begun. If you dispute the creditors' claims you should try and reach a settlement with them before the bankruptcy order is made: trying to do so afterwards is difficult and expensive.

Where is the bankruptcy order made?

Bankruptcy petitions are usually presented either at the High Court in London or a County Court near to where you live or trade.

A petition can be presented against you even if you are not present in England or Wales at that time, providing you normally live in, or have a recent residential or business connection with, England or Wales.

If you want to make yourself bankrupt you should contact your local Court. They can give you the name, address and telephone number of the nearest County Court that deals with bankruptcy.

The address and telephone number of your local County Court is listed under 'Courts' in the phone book, where you should look for ‘civil Courts - County Courts' and not ‘magistrates' Courts’. The Courts Service website at: http://www.hmcourts-service.gov.uk/cms/14604.htm has an index of County Courts that will show you the area where the County Court has jurisdiction. However, you will need to contact the Court to find out if it has jurisdiction to hear a bankruptcy case.

What will happen at Court?

The Court will either hear your petition straight away or arrange a time for the Court to consider it.

If English is not your first language and you need an interpreter, the Court will not be able to help you find one. You will have to do this yourself and pay interpreter's fees.

At the hearing the Court can do one of four things:

Stay (delay) the proceedings - often because the Court needs further information before it can decide whether to make a bankruptcy order.

Dismiss the petition - perhaps because an administration order would be more appropriate.

Appoint an Insolvency Practitioner - if the Court thinks that an Individual Voluntary Arrangement would be more appropriate. This will only be possible if your assets are more than £2,000; your unsecured debts are less than £20,000; and you have not been bankrupt or made an Individual Voluntary Arrangement in the previous five years. If you do not wish to enter into such an arrangement, you should inform the Court.

Make a bankruptcy order. You will be bankrupt the moment the order is made by the Court.

As well as a bankruptcy order, the Court may issue a certificate of summary administration - as long as your unsecured debts are less than £20,000 and in the previous five years you have not been bankrupt or made an Individual Voluntary Arrangement with your creditors. If the Court issues this certificate, it will make the administration of your bankruptcy quicker and simpler.

The Official Receiver will then be your Trustee in bankruptcy (see below) and you will automatically be freed from bankruptcy (known as 'discharged') two years from the date of the bankruptcy order. (If a certificate of summary administration is not made, your discharge from bankruptcy would usually be three years from the date of the bankruptcy order.)

Who deals with bankruptcy cases?

The Official Receiver is a civil servant and an officer of the Court. He is responsible for administering bankruptcies and will act as a Trustee of your estate unless a private sector Insolvency Practitioner is appointed.

One of the Official Receiver’s main duties is to investigate your financial affairs for the time before and during your bankruptcy.

An Insolvency Practitioner can be appointed Trustee instead of the Official Receiver, they must be licensed and are usually accountants or solicitors. The Insolvency Practitioner is then responsible for the disposing of your assets and making payments to your creditors.

What are the main changes of the new legislation( Enterprise Act 2002)?

The main changes are as follows:-

In certain circumstances you may be discharged from bankruptcy after one year (previously the minimum was two year’s)

A limit of three years may be placed on the Trustee’s rights to realise equity in your home. (previously this was open ended).

Harsher penalties imposed on those who are considered to have brought about their bankruptcy through reckless or irresponsible behaviour. Restrictions after bankruptcy could last for a further two to fifteen years.

What are the effects of Bankruptcy?

Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.

Where the home is co-owned, the debtor’s interest can still be realised, but a right of occupation period of twelve months is allowed for the disposal of the property if a co-owner, family or dependents of the debtor occupy it. At the end of the twelve-month period, the property will almost certainly have to be put up for sale, enforced by a Court order if necessary.

The other main disadvantages of bankruptcy are the constraints forced upon the bankrupt and the stigma of having to declare oneself as a bankrupt for certain transactions.

A bankrupt may not:

Obtain credit of £250 or more alone or jointly with another person without disclosing his or her bankruptcy

Conduct business directly or indirectly in any name other than that in which he or she was made bankrupt

Be involved directly or indirectly in promoting, forming or managing a company without the Court’s permission

Hold certain public offices

When a bankrupt is discharged these constraints are ended.

A bankrupt may open a new bank or building society account but should disclose the fact that they are bankrupt. The bank or building society may then impose conditions and limitations. Overdraft facilities or chequebooks must not be obtained, as they are likely to be dishonoured. The bankrupt must inform the Trustee of any funds available in the account, which exceed the normal living expenses, in order for the Trustee to distribute among the creditors.

Sequestrations in Scotland.

The main features include:

A Sequestration is a Scottish legal term for personal bankruptcy where you are formally declared Bankrupt by the Court.

Sequestration involves the transfer of your assets and property into the hands of a Trustee for the benefit of the lenders.

The Trustee in Sequestration has a duty to sell the assets/property. The Trustee may also seek a voluntary contribution from your income if you are in regular employment.

Self Sequestration

This can be done where you owe more than £1,500 and a lender has served:

a Charge for Payment and fourteen days notice have elapsed or,

a Statutory Demand and 21 days have elapsed or,

an Earnings Arrestment as a result of a Charge for Payment.

If a lender has served none of the above, then the agreement of a lender (or lenders) is required.

Advantages

Your lenders will no longer be able to pursue you or take action against you to recover what you owe.

You will not have to make further payments to your lenders.

You may expect to be discharged after 3 years and will then be free of debt (unless you have accumulated any new debts since the date of your Sequestration).

Disadvantages

If you own any valuable property, including life assurance policies, you will probably lose them.

If you own your own home you will probably lose it.

If you are in paid employment you may have to make a contribution.

If you acquire any money or property after the date of your Sequestration and before the date of your discharge you will have to surrender it to your Trustee.

While you are sequestrated it will be unlawful for you to incur credit of more than £250 unless you tell the new lender that you are an un-discharged bankrupt.

Your Sequestration will be noted by the Credit Referencing Agencies and you may have difficulty in obtaining credit even after your discharge.

On 1 April 2008 a new bankruptcy act came into force in Scotland.

The main changes to the existing bankruptcy proceedings are:

Debtors will be discharged automatically from their debts after one year instead of the current three years;

Debtors will apply to the office of the accountant in bankruptcy (the State ) instead of the Sheriff Court when petitioning for their own bankruptcy . Creditors will still use the court system and have an obligation to prove to court that they have taken every step to ensure the person being pursued has received debt-advice information;

There will be a new simplified route into bankruptcy for individuals with low income and low assets (LILA);

The debt threshold for bankruptcy will increase from £1,500 to £3,000;

The family home will be revert to the debtor if the trustee does not commence steps to sell it , or otherwise deal with it , within three years of sequestration;

There will be power to impose Bankruptcy Restrictions Orders and Bankruptcy Restriction Undertakings lasting between two and fifteen years on debtors who pose a risk to public or commercial interests;

Student loans will not be written off at the end of the bankruptcy;

Income payment arrangements and income payment orders, which can last a maximum of three years will be introduced as a means of recovering contributions to the sequestrated estate.

For information in Scotland you should contact The Accountant in Bankruptcy at:

The Accountant in Bankruptcy

1 Pennyburn Road

Kilwinning

Ayrshire

KA13 6SA

Switchboard: 0845 612 6460

Helpline: 0845 762 6171

Website : http://www.aib.gov.uk/

Bankruptcy In Northern Ireland

Bankruptcy is when you legally declare that you can no longer pay your debts. People usually turn to bankruptcy as a last resort. It may sound like something you don’t want to do but for many they see it as a fresh start. IVA Northern Ireland offers other Debt Solutions such as Debt Management Plans and IVAs which may be a better alternative for you rather than bankruptcy.

Although Bankruptcy frees you from your debt, you must keep in mind that although your debts will be cleared your assets like your house, car, valuables, life insurance plans, etc could all be sold off in order to pay as much of the debt as possible. It also can mean other restrictions relating to your work (e.g. loss of career) that’s why you should view this option very much as your last resort. Bankruptcy also has a social stigma around it and people may find out that you are Bankrupt as Bankruptcy Orders are advertised in the Belfast and local newspapers. Other Implications of Bankruptcy include...

If you are a renter, your landlord will find out.

In some occupations your employment may be at risk i.e. You cannot be a company director, you may not practice as an Accountant / Lawyer / Justice of the Peace / Member of Parliament, you cannot take part in the promotion, formation or management of a limited company (LTD) without permission from the court.

You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.

You lose control of your assets.

You cannot obtain credit for over £250 without the permission from the lender.

Your credit is affected for many years after the annulment.

You may be publicly examined in court.

How are you made Bankrupt in Northern Ireland?

You can enter into Bankruptcy yourself, or if you have debts of over £750 or the creditors that you owe the money too can apply to make you Bankrupt. Other Debt Solutions such an IVA may help solve your problem before you have to resort to bankruptcy.

Voluntary Bankruptcy is where you enter into Bankruptcy yourself

Involuntary Bankruptcy is where a creditor you owe money to applies to make you Bankrupt.

The supervisor or anyone bound by an IVA can be made bankrupt if the terms are not followed.

How long does Bankruptcy last?

You are usually discharged from bankruptcy after 12 months, on the first anniversary of the bankruptcy order, but there are different dates depending on each individual’s circumstances.

When your Bankruptcy has finished, it is important to remember that the effects of Bankruptcy extend far further than just one year i.e. your credit rating will be affected for many years.

For information in Northern Ireland you should contact The Insolvency Service of Northern Ireland at:

The Insolvency Service

Fermanagh House

Ormeau Avenue

Belfast

BT2 8NJ

Tel: 02890 251441

http://www.detini.gov.uk/deti-insolvency-index.htm

Declaring Bankruptcy In The UK If You Now Live Abroad.pdf

Serving Statutory Demands on someone living abroad

see pages 4 & 5 http://www.insolvency.gov.uk/pdfs/guidanceleafletspdf/statdemand.pdf

A statutory demand is not a document issued by the court. Leave to serve out of the jurisdiction is not therefore required. When a statutory demand is served outside the jurisdiction, the time limits for compliance (21 days) and for application to set aside (16 days) must be amended. This is done with reference to the Extra Jurisdiction Tables (Time for Acknowledgement of Service) in the Supreme Court Practice 1997, and the time is altered with reference to each particular country. [see Practice Direction (Bankruptcy: Service Abroad (No 1 of 1988 [1988] 1 WLR 461.]

There are some restrictions on you being

able to present a bankruptcy petition if a

debtor who lives abroad fails to comply with

a statutory demand:

 

• If the debtor lives in one of the member

states of the European Union (apart from

Denmark), you will not be able to present

a bankruptcy petition against that person

if they carry on business or earn their

living in that EU country.

 

• If the person is retired or unemployed, the

court will look at the place where they

normally live. You have to make the

person bankrupt under the law of the

country where they normally work or live.

 

• If the debtor lives in a country that is not

in the EU, or if they live in Denmark, then

you will be able to present a bankruptcy

petition only if they have lived or had a

residence here, or carried on business

here, at any time in the 3 years before the

date you present the bankruptcy petition.

The only exception is if they are in

England and Wales on that day.

There are reciprocal agreements between the EU Countries. The following page deals with insolvency

Council regulation (EC) No 1346/2000 of 29 May 2000 on insolvency proceedings http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000R1346:EN:HTML

http://www.consumeractiongroup.co.uk/forum/showthread.php?439688-Bankruptcy-threshold-increased-from-£750.00-to-£5-000.00-Information-accurate-21.09.2015

New UK bankruptcy rules come into play from October 2015.