Questions about bankruptcy

poppy9596 · 16 September 2017 at 3:39PM

Hi All,

This is my first ever post because me and my husband are thinking about going down the bankruptcy route.!

To start the credit cards are in my husband's name, the only thing I am named on is the joint account which will be removed if we go through bankruptcy. We have £40K of debt on different credit cards and have done balance transfers as you do when you think you can manage things. I was also temporarily unemployed for 3 years due to suffering with depression and anxiety so we did not have 2 wages coming through. Due to my anxiety and depression we overspent and lived beyond our means. We are looking to do UK bankruptcy from abroad in the USA as we are moving back to my home country to live with family temporarily until we get on our feet again. My questions are:

1. Would it be best if we filed bankruptcy before or after we move abroad and if we moved abroad would my husband's bankruptcy affect him getting any credit in the future in the united states? I was reading somewhere that the bankruptcy only affects him in the UK
2. Due to the reasons for going bankrupt would my husband be declined bankruptcy and since we are going abroad and he wont have employment what is the official receiver's stance on this?
3. Is bankruptcy straightforward in that it takes the 28 days for them to make a decision or would we need to keep in contact with the OR if circumstances change and provide them with evidence?
4. what would they class as unreasonably extravagant, I know we lived beyond our means but we didn't spend thousands all in one go and we have been making monthly payments every month on the credit card. by living beyond our means I mean not keeping a weekly food shopping budget, once in a while holidays, and due to my depression retail therapy. I am worried if my husband receives a bankruptcy order of 2 -15 years like it has mentioned on various websites.
5. Will I be affected my the bankruptcy since everything is in my husband's name, I know I wont be but just double checking. I will be opening my own bank account in my own name

Any advice would be greatly appreciated.

debt_doctor · 16 September 2017 at 4:30PM

If you plan to move Abroad is Bankruptcy a sensible option?

If you plan to move abroad outstanding debts in the UK can be a problem. You may intend to keep up the repayments. But what if it turns out that you are unable to do this?
It is not unusual to be unsure about how long it will take to get a new job after you move. Even if you have a job lined up it is often difficult to know what your new rent and other living expenses will be.
Given this being able to move without having to worry about making debt payments in the UK can be a real help. Going bankrupt before you leave makes this possible.

After you are bankrupt if you can afford to do so you may still have to make payments towards your debts even if you are living abroad.

Should you go Bankrupt before you move Abroad?

If you plan to move to a country outside the EU generally speaking you do not need to go bankrupt before you leave. It is possible to move first and then assess whether bankruptcy is required.
Under the Insolvency Act section 263 I(2) you still qualify for bankruptcy in England & Wales for up to 3 years from the date you left. In addition since April 16 this option has become even more attractive as you can now apply on-line.

If you live in Scotland you lose the right to declare bankruptcy as soon as you move away. As such if you are considering going bankrupt in Scotland you must do so before you leave.

However if you are planning to move to another EU country (excluding Denmark) you can only go bankrupt before you leave.
Previous to April 2016 if you moved to another EU country you still had 3 months to declare yourself bankrupt in England & Wales. However after changes to the Insolvency Act introduced in April 16 this option has been taken away.
Will you be able to get credit in the County you move to?

When you go bankrupt your credit rating in the UK is seriously affected for up to 6 years. However local credit reference agencies rarely have cross boarder links. As such your credit rating in the country you move to should not be affected.
Once you have moved if you apply for a bank account or credit the local credit reference agency is unlikely to be aware of your poor credit rating in the UK.
As such despite your bankruptcy you should have the same options for credit as anyone else who is new to the country.

If you go bankrupt after moving to a non EU country you will have to declare any bank accounts you have opened locally. The Official Receiver (OR) is likely to write to the bank informing them of your UK bankruptcy. This could affect your local banking facilities.

Your Bankruptcy obligations after you move Abroad

Your bankruptcy in the UK will normally last for 12 months. If you move abroad after going bankrupt you must still remain in contact with the OR during this time.
If you are unsure what your income or living expenses will be after you move this is not a problem. However once you are settled and get a job you are legally obliged to inform the OR.
They will then ask for information about your new income and living expenses. If you have a surplus income the OR will still require you to pay this towards your debt in the UK.

poppy9596 · 16 September 2017 at 4:40PM

Thank you so much for your help, will I be affected in anyway seeing as its my husbands name?

debt_doctor · 16 September 2017 at 4:41PM

Hi,

With your specific questions, I think it better to go BR before leaving the UK. I see no reason for BR to be declined, but he must stay in touch and cooperate with the OR for the year he will be BR.
As your husband will have no income of his own, he will not get an IPA - but if he gets income whilst BR he must notify the OR.

I see no reason for a BR restriction (2 - 15 years) unless debt due to gambling, fraud or reckless behaviour - keeping your head above water with credit is none of those things.

In the UK, as you have a joint bank account you are financially linked, so his BR will reflect upon your credit ability. Don't know if this would affect you in USA.

I also have no idea what immigration status your husband will have in USA (is he UK Born?). You / he would need to check about entering the USA whilst insolvent.
DD

debt_doctor · 16 September 2017 at 4:45PM

poppy9596 wrote: »

Thank you so much for your help, will I be affected in anyway seeing as its my husbands name?

only with the financial association with the joint bank account for future credit rating (in UK). I also presume that neither of you have any assets. Your husband needs to take debt advice on his individual circumstances, perhaps from Citizens Advice or National Debt Line (see contact details in my signature)
DD

poppy9596 · 16 September 2017 at 4:57PM

He is getting my name removed from the joint account so will this financially unlink me?

The debt was caused by overspending due to my depression/anxiety and mainly retail therapy and a couple of holidays but some of that was paid back when i did start working last year will he still receive the 2-15 years because of that?

He was UK born and he will be under marriage visa category.

debt_doctor · 16 September 2017 at 5:05PM

poppy9596 wrote: »

He is getting my name removed from the joint account so will this financially unlink me? YOU will need to inform the credit reference agencies that you no longer have a financial association with your husband. Inform Experian, Equifax and Call Credit.

The debt was caused by overspending due to my depression/anxiety and mainly retail therapy and a couple of holidays but some of that was paid back when i did start working last year will he still receive the 2-15 years because of that? Virtually any bankrupt could look back and say "maybe that wasn't good / clever" at the time. What really matters is the things I said earlier and any recent significant borrowing. Would a restriction bother him anyway?

He was UK born and he will be under marriage visa category.

Hope that assists.
DD

poppy9596 · 16 September 2017 at 5:23PM

Yes you have been really helpful. Thank you so much for your replies and no he wont be bothered by any restrictions. I am mainly worried if i am affected in any way. We both just want a clean slate.

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