Emigrating & Repaying Debt

Going_Down_Under

Hi, this is my first post but I really would like some genuine unbiased advice.

My husband and I have been fortunate enough to be accepted to emigrate to Australia on a residence visa with no conditions or strings. We have been waiting on selling our house and are now due to move over at the beginning of October.

The problem we have is that in order to sell we have accepted significantly less for the house than we had budgeted on; leaving us with only £20,000 equity to start our new life compared to the £75,000 we were expecting. We also have between us just over £30,000 of unsecured debt comprising a handful of credit cards and a small personal loan.

Putting aside the moral issues, which we will have to deal with in our own way, what are the financial and legal implications of defaulting on these debts by just disappearing? The debts were incurred with the intention of repayment but there is no concievable way to start our new life and repay these debts. We have no intention of ever returning to the UK to live and of course if we "won the lottery" we would repay the debts at the drop of a hat but for now it does not seem possible.

Can the UK banks still enforce the credit agreements overseas? Will the Australian banks be able to enquire on our UK credit records? Will we even be able to return to the UK for a visit after defaulting on these debts?

I have read through these boards at length and found the following:

Pobby wrote:

From what I remember when I was at the bank, we were always 'educated' to tell customers that we are an international company and can send your debt anywhere in the world. In theory... and team meetings, we were advised that legislation legally doesnt enitle us to the debt however just tell them that it does.
The question spoke about someone with a pile of debt moving to NZ.Could they be persued for it.The above quote is the answer.Hope it helps to put your mind at rest.

I would appreciate your replies as this is a lifechanging time for us and the possibility of a fresh start. Please don't flame me, I just need to know the options to make an informed decision!

Many thanks, Sarah.

The_Boss

May I ask - how would you feel getting major hassle and grief from debt collection companys and baillifs turning up at your door when you are not at fault? Because this is likely to happen to your house buyers if you choose to abandon your commitments.

Bloke_with_a_simple_life

Repay you debts. It would make your life simpler and less worrysome. If it means delaying your move, then so be it. When does your residency/offer become revoked?

Whilst you think you never have any intention of coming back, you never know what circumstances may force you back and the troubles will start then.

The_Boss

They will probably come back with new identities after leaving a similar debt down under.

Honestly, you say you dont want to be flamed, and expect not to be, and want to put aside the moral issues etc etc, but this has got to be the lowest thing anyone could ever do. Running away from it and leaving someone else to suffer the consequences.

I hope you are going to warn the new house buyers of your intentions.

CIMA_LOVER

If you aint coming back and leave on forwarding addresss, then forget it!!! Why pay anything back?? :-)

Voyager2002

The_Boss wrote:

May I ask - how would you feel getting major hassle and grief from debt collection companys and baillifs turning up at your door when you are not at fault? Because this is likely to happen to your house buyers if you choose to abandon your commitments.

No, not major hassle. I have been in that situation before (previous tenants had moved on without telling their creditors) and since my name and age were different it only took me an hour or so to deal with the situation. Not ideal, but not a serious problem.

No, I do not think that abandoning these debts would be "the lowest thing anyone could do": cheating a friend or any individual would be a whole lot worse. However, the OP is asking for advice on how to break the law, cause losses for the banks and credit card companies on which I rely, and thus increase costs for me and for anyone else who intends to remain in the UK. Oddly enough, I don't feel like helping the OP to do this!

I will say that this topic is regularly discussed in the UK branch of the thorntree area of the lonelyplanet web site, and the consensus of opinion there is that banks in the UK and Australia do communicate with each other. My advice to the OP: give your creditors your new address and details of your new income, and offer an affordable monthly payment once you are settled there. If it is any consolation, you will be astonished at how much your equity will buy there.

Going_Down_Under

Thanks to "The Boss" and "Bloke_with_a_simple_life"; I understand perfectly where you are coming from and respect your views 100%.

Yes, what we are considering is "low" although I agree with "Voyager2002" that it is not the worst possible thing we could do by any means. These are however your views on the morality of this course of action; what we really need is views on the other implications (financial, legal) if we decide to go down this route.

To "Bloke_with_a_simple_life", unfortunately time is against us as it has taken so long to sell our home we must be in Australia by late January. We had 2 years from their offer which cannot be extended. If we backed out now we would have the time and considerable expense of reapplying with no guarantee of a positive outcome. As you can see, time has to a degree forced our hand.

CIMA_LOVER wrote:

If you aint coming back and leave on forwarding addresss, then forget it!!! Why pay anything back?? :-)

Thanks for that! While this is what we are considering we really need to understand the facts before making such an important decision.

Voyager2002 wrote:

I will say that this topic is regularly discussed in the UK branch of the thorntree area of the lonelyplanet web site, and the consensus of opinion there is that banks in the UK and Australia do communicate with each other. My advice to the OP: give your creditors your new address and details of your new income, and offer an affordable monthly payment once you are settled there.

Thanks for that advice too. I had never heard of Thorntree but having a look through it looks interesting although I couldn't find anything relevant in the short time I've been looking around. With regard to informing creditors, that's what we are trying to decide upon. What is the worst that could happen if we don't?

Thanks for all your input and time. Any advice welcome. Sarah.

nomoneytoday

If you get into "trouble" when you are in Aus for the first year or two, don't they revoke your licence to stay?

You spent the money, you owe the money, now its fair to pay the money.

tipsychick

Presumably you're in touch with a solicitor, as you're in throes of selling your house. Why don't you ask their advice or get them to research it for you? It might be a bit embarrassing but at least you'd really know where you stand legally.

My instinct is that it wouldn't be worth their while tracking you down and then pursuing you halfway across the world for it but if you did need to come back here to live for any reason, your credit rating would be shot to bits. You probably know anyway but your creditors will have six years from the last point of contact to pursue your debits through the courts here.

At the very least make sure you don't leave your forwarding address with anyone, including the estate agents handling the sale, your solicitors, etc. Warn your parents/family members with the same surname, etc. not to divulge your whereabouts if they're contacted.

martyn4764

tipsychick wrote:

At the very least make sure you don't leave your forwarding address with anyone, including the estate agents handling the sale, your solicitors, etc. Warn your parents/family members with the same surname, etc. not to divulge your whereabouts if they're contacted.

And then spend the rest of your lives looking over your shoulders...


You spent it, so pay it back.

M_Thomson

tipsychick wrote:

Presumably you're in touch with a solicitor, as you're in throes of selling your house. Why don't you ask their advice or get them to research it for you? It might be a bit embarrassing but at least you'd really know where you stand legally.

My instinct is that it wouldn't be worth their while tracking you down and then pursuing you halfway across the world for it but if you did need to come back here to live for any reason, your credit rating would be shot to bits. You probably know anyway but your creditors will have six years from the last point of contact to pursue your debits through the courts here.

At the very least make sure you don't leave your forwarding address with anyone, including the estate agents handling the sale, your solicitors, etc. Warn your parents/family members with the same surname, etc. not to divulge your whereabouts if they're contacted.

Tipsychick, I can't believe that you posted the comments above. The original poster should be ashamed of themselves for even considering what they are doing and you should be ashamed of yourself for writing the post above.