UK bankruptcy whilst living in the US

mikiek

Hi All,

I have recently moved to the UK with my US wife (we met and married in the UK).

I am looking to declare myself bankrupt as I am struggling to meet the minimal payments.

I have an ex partner who agreed to pay a loan (that I joint signed for) but I have recently received a letter from the creditor asking me for payment as no payments have been received for 3 months.

To be honest, with this loan and all my other UK debts, it is just too much for me to make payments.

I found a website http://myvesta.org.uk/debt-solutions/foreign-bankruptcy-service who has informed me that for a fee (625 pounds plus filing fee) they can do all this for me whilst I am in the US.

I have in total, over 20K pounds of debt, owing to 2 credit cards, and 2 loans (one of them being the one mentioned above).

I have been informed that the US cannot obtain any of my UK credit history so this would leave me free to build up a US credit history as normal.

I would like to know anyone’s thoughts on this process and if there are another other companies that offer the same service?

I do not have any US (or UK) assets. My wife has a car and we would like to obtain a US mortgage next year.

Would this affect me obtaining one?

One of my loans is with HSBC and a credit card is with Virgin (and they both operate in the US; Virgin as MBNA), but it is my understanding that they cannot pursue me for payments as it is a UK debt... Can anyone confirm this?

Any help is really appreciated.

Mikiek

fiveyearplan

I would definitely steer clear of myvesta or any other company that will charge a fee for their services. If you are still living in the UK then you can do all this yourself for free. If you are already living in the US, you can do all the ground work on the internet/phone and if you have to come back to file bankruptcy that would still be cheaper than paying a company to do it for you. Why don't you ring one of the debt charities CCCS or CAB (speak to a specialist debt advisor) and they will be able to tell you your options.

Are you planning on staying in the US for more than 6 years? All your debts would be statute barred by that time.

mikiek

Hi, Thank you for your reply.

To be honest I was put off a little by some websites so decided to struggle on until now.

I just cannot afford to continue paying my UK debt whilst living here in the US.

To answer your question, I have no plans to return to the UK to live. I will be returning once a year to visit my family so want to ensure that whatever I do is approved by a court as I dont want to be arrested at the airport!

I will make contact with the CCC.

I have read in some circumstances the court will try to make you accept an IVA. I really dont want to enter one of these, as I just want to go ahead with the bankruptcy.

I have no UK or US assets and our cars are both in my wife's name. (one very old car that I use for work and a newer car that my wife uses).

As I need this car (value less than $1,000) for work, is it possible for them to make me sell this to pay off som of the debt?

When I go bankrupt, will I have to make any regular payments again? Will the court say that I have to pay $x per month for x years as well as going bankrupt, or will all myy debts be written off immediately?

Any advise is really appreciated.

deedee_3

Definatly get in touch with National Debtline or CCCS.

When you petiton for your bankruptcy you will have a soa agreed with the OR. If there is any surplus over £99 then you will pay a % to the OR for 36 months. This is called an IPA and can be adjusted up, down, disolved or suspended during that time if your circumstances change.

If you want to put your SOA up I am sure some one will check it for you.

http://www.makesenseofcards.com/soacalc.html

EDIT: If you have no assets then an IVA will not be suitable for you.

mikiek

Thank you for your reply...

I have completed the SOA (roughly) as suggested. Please note that all of my household bills are charged in USD $ so I have used a rough calculation of 1 GBP = 2 USD

The only assets we have are cars that we both completely depend upon for work (as we travel 2 hours each per day and there is no public transport). One car is currently financed in the US in my wifes name (5000 GBP value) and I use my wife's old car (still in her name) that is very old and has a value of less than 500 GBP)

Even though my wife and I are married, we keep our finances seperate (as my debt is debt from a previously bad relationship, and I have only known my wife for 2 years so feel its unfair for her to support them).

I read after posting this that as I do not live in the UK I cannot obtain an IVA so hopefully that wont apply to me.

I would appreciate anyone telling me what the IPA would be (roughly) as I have calculated that I would have to pay about $1,000 (500 GBP) per month to clear my UK debt in 3 years, which I cannot afford.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1300
Partners monthly income after tax....... 1000
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2300

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 0
Rent.................................... 415
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 35
Gas..................................... 35
Oil..................................... 0
Water rates............................. 10
Telephone (land line)................... 0
Mobile phone............................ 50
TV Licence.............................. 0
Satellite/Cable TV...................... 80
Internet Services....................... 0
Groceries etc. ......................... 300
Clothing................................ 50
Petrol/diesel........................... 200
Road tax................................ 5
Car Insurance........................... 65
Car maintenance (including MOT)......... 75
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 150
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 10
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 30
Entertainment........................... 50
Holiday................................. 0
Emergency fund.......................... 50
Total monthly expenses.................. 1630

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 5000

No Secured Debt

Unsecured Debts
Description....................Debt......Monthly...APR
HSBC Loan......................5198.25...208.......9.9
Virgin card....................6662.84...30........14.9
Barclaycard....................1267.98...30........6.7
US Car loan....................5000......110.......7.9
Total unsecured debts..........18129.07..378.......-

Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including secured debts)....... 1,630
Available for debt repayments........... 670
Monthly UNsecured debt repayments....... 378
Surplus(deficit if negative)............ 292

Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total Secured debt...................... -0
Total Unsecured debt.................... -18,129.07
Net Assets.............................. -13,129.07

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

======== Enter any other useful information below ========

e.g. the number of adults & children in the household, the number

of cars included in the SOA or anything else that may be useful.

fiveyearplan

If it was me I seriously don't think I would file for bankruptcy. I would however keep a close eye on the last dates I made payments to each company and the last time I had corrrespondence. You cannot be arrested at the airport - or anywhere else - as you haven't committed a crime. It isn't a crime not to pay your bills (as long as it isn't council tax, fines etc) . Saying that you may want closure - I would wait the 6 years for closure personally - but each to their own.

In case you're wondering why I would do that, there is nothing devious, the creditor's aren't going to get any money from you either way you do it and if I, myself, would prefer to be able to answer the question "have you ever been bankrupt?" with a negative response.

I'm sure this post will raise some eyebrows but I just can't see what good BR would do (maybe someone will come up with a view I haven't thought of - that's whats so good about this forum) in your situation unless you did want to come back before the 6 years - even then your creditors would have to find you and start the debt collection again - perhaps that's when I'd file BR.

mikiek

That is a VERY interesting thought... I had thought of this, but thought that there maybe repercussions when I visit the UK (i.e. arrested for none payments).

The only thing that concerns me with doing this (avoiding any future payments), is HSBC (my loan) operate in the US, as HSBC, as do Virgin (Credit card 1) I think they are with MBNA and Barclays (credit card 2) as they have just purchased Merrill Lynch.

So they may us their US counterpart’s litigation to chase me for payments, or worse damage my US credit file (that I have to keep clean as I want to obtain a mortgage within the next 2 years).

Are you saying that if I was not to be tracked down in the US then I could wait 6 years and be free?

The other smaller concern (as I don’t think this will be an issue) is that I live here on a CR1 marriage visa. I have a Visa for 5 years before I can become a dual passport holder. I just want to make sure that these debts cannot be given to the US embassy in some way and they revoke my visa (although it sounds very unlikely).

I have no intensions of returning to the UK to live as I have settled very nicely in the US and will probably remain here for many years.

Thank you so much for your thoughts everyone. I really appreciate it.

tigerfeet2006

Why don't you ask on an expat forum and see if anyone has any experiance of this?

http://www.expatforum.com/expats/america-expat-forum-expats-living-america/

http://www.alloexpat.com/moving_to_north_america_forum/

http://www.americanexpats.co.uk/

fiveyearplan

I seriously doubt any of those companies would use their US companies to 'look' for you. For one thing they have no idea where you are and for another one department doesn't even speak to the next in this country much less an arm of their company in another country!

Good suggestion from Tigerfeet.

jammin_2

As fiveyearplan has suggested; under the circumstances the OP has described, the best thing the OP could do is simply nothing.

Once no communication is made or received between creditor and debtor, for an uninterrupted period of 6 years (5 in Scotland), the debts become Statute Barred. That is, unenforceable.

Enjoy your new life in the US. :beer:

mikiek

This is great news... thanks so much for all the replies.

I will contact the expat forums just to make sure there are no hidden surprises down the road.

Unfortunately for me, when I moved here I did update my address details with all 3 creditors, so in theory they do know where I am. I will change my address back to a UK address (a family members address) and hope that they do not pursue me.

On another note, my bank account is with HSBC where I have my loan. Is it possible to close this account down and not give them details of another account for the loan repayments?

The reason I want to close the account is because it has an overdraft facility and I don’t want that racking up paying the loan and credit cards off!

If they were ever to locate me and force me to pay anything, I would prefer it without all the overdraft charges as well