Considering UK bankruptcy (living in Australia)

downunderandout

Hi there

First of all this is my first post - this forum has been a great source of insight and advice so I figured I'd be completely remiss if I didn't ask for some advice on my plight before deciding what to do.

The (hopefully) brief summary is this: my wife and I (and our 1 year old son) emigrated to Australia from the UK about 10 months ago. We both had some separate debts, but were confident that we'd be able to keep up the repayments, largely thanks to a continuing UK freelance engagement on my part. My wife has a job here which, in theory at least, pays all our bills in Oz.

A few days ago my mother-in-law recevied a letter (from Credit Solutions Ltd) demanding payment of £11,000 for an outstanding debt - for reasons beyond my control I hadn't been able to keep up the monthly payments for that particular debt. Since we had abosutely no way of paying (our options, apparently, were to either pay £6k in one go or make three payments, within three months, of £3.5k - neither is a realistic possibility) we started considering bankruptcy.

We've used the calculator gizmo on the CCCS site and found that my total debts are around £37k, which really surprised us to be honest, and after taking account of all essential outgoings I have £32 left over per month - not surprisingly the recommendation was bankruptcy.

In many ways this almost seems too easy a way out: I have no real assets to speak of as most of the things we've bought out here have been bought in my wife's name, we don't have a mortgage, and it really doesn't matter if my credit rating in the UK takes a hit as I'm no longer living there.

The only minor downside is that we'd have to actually go to the UK to file the paperwork, but that just means we get to see our families, which is an added bonus. Of course, we'd have to borrow the money to pay for the flights, but if the OR has an issue with that we're perfectly prepared to cover that part of the debt as, in the scale of things, it's a relatively small sum. We'd only be able to go for about a week, so hopefully that's long enough to sort everything out, and I gather the OR can contact me by phone if they need to discuss any additional matters.

I'm going to call the CCCS tomorrow and get some serious advice about this, but wondered if anyone here has any suggestions, or maybe can spot something we've missed.

I'll keep adding to this thread as I go in case it;s useful to anyone else, but all questions, advice, opinions, suggestions, etc wil be very gratefully received.

thanks all

Walter_J

Someone else will no doubt have more detailed knowledge, but my first thought is that you're pretty well out of their reach on the other side of the world!

I'd get your mother in law to write to them explaining that you are now living in Australia and giving them an address where they can contact you. It might be an idea to get yourself an accomodation address for such correspondence.

There's every chance that they will just go away. The cost of pursuing you in Australia could well be prohibitive and anyway, I'm not sure what they can do to chase a debt in another juristriction.

Are Credit Solutions a debt collection agency? If so, chances are that they will report back to their client that the debt is uncollectable and it will simply sit on file indefinitely.

I would just bide my time. If things get nasty in the future then that is the time to go bankrupt!

But I could be completely wrong...

downunderandout

Hi Walter

Thanks for your reply.

I should probably clarify that I contacted Credit Solutions Ltd quite promptly. This is because their letter stated that they were intending to send people round to my mother in law's house and I didn't want her or her family either getting stressed or harrassed due to my problem. I made a token payment of £50, which may have been a mistake in retrospect, but didn't give them my address. And, yes, they do appear to be a debt collection agency.

It was really just that this event was the catalyst for us realising the enormity of our financial predicament and caused us to start investigating bankruptcy. Sadly the amount that CSL are chasing is only about a quarter of my total debt.

thanks again

peachyprice

Hi Downunder,

There was a member recently who went brankrupt from Costa Rica for debts in the UK, it was all done by a friend through power of attorney. i don't know whether this could apply to you, here are the threads relating to his story:

http://forums.moneysavingexpert.com/search.html?searchid=32384865

HTH

december

Morning,
Welcome to the board. I think first of all you should contact CCCS or the national debtline help number so that you can arrange an appointment with them as, should you decide to petition for your own bankruptcy, the judge will ask if you have taken professional advice and if you haven't, the petition may be refused. Also it might be worth writing to the company and giving them your address so your mother in law doesn't get hassled. In my experience (as limited as it may be), debt collection agencies make a lot of threats but actually do very little. The worse that could happen is that they file for a CCJ against you or petition for your bankruptcy which is highly unlikely to happen as it costs them too much and then they have little chance of getting back the money you owe them.

December

ozmum72

HI, Im new around here. Im going back to Australia and have decided not to file bankruptcy as I cant afford the fees.

We are just giving our creditors a po box to write to in Australia (which is registered in my fathers name)

So are you saying no one is likely to file bankrupcty against us?

debt collectors also are NOT allowed to enter anyones home unless a court order giving them permission has been obtained. And then if the address is NOT owned by the person holding the debt they can NOT collect anything from that person!.

I am interested to understand more about this so called reciprocal agreement with Australia as elsewhere I have been reading state that UK bankruptcy do NOT effect you in Australia

december

Hi and welcome to the board,
It does happen that creditors petition for someone's bankruptcy and I've only been around here a few months but it seems to be for council tax and if you owe any money to HMRC (the tax people I think)
December

peachyprice

And American Express!

december

thanks peachy I'm none too hot on this giving advice malarky and inevitably miss things out

December

downunderandout

Thanks to everyone who's replied so far - really pleasantly surprised to see such a response so quickly.

I will be contacting the CCCS tomorrow - from everything I've read on this forum I wouldn't even consider applying for bankruiptcy without talking to them first.

I have no problems revealing my accounts, etc, in Australia to the OR - in fact I assumed I'd have to anyway. My only concern is that right now I'm under the assumption that being bankrupt in the UK won't have any effect on my credit status in Australia - if I'm wrong about that can someone please tell me. It's not so much that I plan to apply for credit in the near future (I don't) but if it's going to cause problems getting bank accounts and, potentially, a mortgage at any time then I need to know that.

I did have one other question - my wife and I have a joint bank account in the UK and also one in Australia. I assume the Australia one will be unnaffected, but the UK one is obviously at risk of being frozen. Is it just a simple matter of my wife applying to have my name removed from the account to prevent it being frozen, or is it more involved than that? We do need, ideally, to maintain a UK bank account but we would probab;y have trouble opening a new one as we're no longer resident there...

Also - we'll be heading to the High Court in London to do the deed itself, but we'll only be in London for the day, and we'll only be in England for a week. Since having to go to court a second time would really cause us some headaches can anyione tell me if there's actually any likelihood of that happening, and if so how I avoid it?

thanks again

downunderandout

Quick update - have an appointment with a CCCS counsellor, but not till August 14... minor drag as it means we can't get the ball rolling till then, but best to talk the the professionals, eh?

Would any recommend talking to the National Debt Line as well?