Bankruptcy and being overseas... a few questions..

niigata

Hi,
I’m new to the forum and have been reading some of the advice posted which is really useful!
I hope that by posting some detailed information on my own situation you can help me to make an informed choice of how I can progress next! From reading the forum I think that Bankruptcy may well be the best option but maybe some of you guys are more knowledgeable than me on this matter!!

My current situation is that after four years at university and in the years after University I have managed to rack up the following debts:

Egg Money

2405.66

Egg Loan

3989.69

Halifax Credit

2473.13

MBNA Credit

3049

Barclaycard

2300

Student Loan

10000

HSBC Grad Loan

20573.89

HSBC Credit

7124.98

51916.35

A large sum of money which was down entirely to poor budgeting and major overspending on items such as my car and visiting Japan three times to visit a girlfriend at the time.

The annoying thing is I have NEVER missed a payment to ANY of the companies I owe money to.. so should I be able by miracle to clear this I would probably have a very good credit rating… I have somehow managed to scrape to get the money together every month for the last few years.. mainly due to the fantastic support of my parents who after university let me live rent free at home. However I found I was mainly only having £50 to live for the month after paying my DDs and sometimes nothing at all!

Recently I decided to move to Japan to live for a year and gain a new perspective on life and work. Before I left I sold all my assets to my father for £10k which I used to pay off a couple of other cards (eg store cards) and leave some funds in my current account to pay direct debits. My assets were actually worth only about £6k but £4k was a gift to try and help me survive the year in Japan.
It seems however that in the next two or three months my money back in the UK will run out and payments will start to fail.
As I have no assets (in the UK or Japan!) I feel that bankruptcy may be a good option but have some worries:

1 – As I have never missed any payments on any debt would this be a negative against my case for bankruptcy?
2 – As I am currently residing in Japan would this cause any difficulties in going bankrupt in my home county of Surrey? My financial organisations all have my parents address as my residing address as that is where I have lived for the past 25 years.
3 – Having moved to Japan at the end of June on a one year working Visa would I need to return to the UK to go bankrupt and would this affect my Japanese working Visa – THIS IS A MASSIVE WORRY! I do not mind returning to the UK for a month after getting a re-entry permit to Japan to sort out my situation but do not want to arrive back in Tokyo and be turned away!
4 – Being registered at my parents address would this have any negative impact on them?
5 – Are Japanese financial organisations linked in any way with the UK banks.. Would I arrive back and find my cash card doesn’t work on the banks want me to close my accounts?
6 – I have not used any of my credit cards since coming to Japan (nearly two months). I have only used my current account to pay monthly direct debits and less than £400 to my father for some money I owed him. Is this an OK situation? Obviously if I was heavily spending on my cards it would seem dishonest and like I am using my UK money to fund my life in Japan which I have not at all – its totally separate.

Sorry for all the questions but it’s a big step in my life and I just want a fresh start and to begin saving for a future. Ironically in Japan I earn a lot less than the UK and only have a very basic cash card but there is something really satisfying about paying rent and living a good basic lifestyle out here rather then have all my money sucked up into my debts like in the UK and having to be a burden on my parents.

I looked at an IVA but it seems that with no assets bankruptcy is better for me.. and as I have no UK income I don’t think I can arrange an IVA. Speaking to the banks and arranging a personal agreement of some sort may be an option but with the total amount of debt owed it may still require payments over £300/month which to be honest would be tough and it may be a cleaner break just to go bankrupt.

I understand getting a bank account in the UK will be tricky and no credit for up to 5 years (that’s actually a positive for me – I’m never going to touch another credit card in my life!) I am planning to stay in Japan after this is resolved (as long as there is no Visa issues) for another year whilst things settle back in the UK..

Look forward to some great advice as I have read on other threads.
Thanks guys and girls!

wbk666

Personally i'd say pay your debts
you've had the cash now its time to give it back.

contact the companies you owe and explain your predicament, most are helpful if your honest and WANT to sort things out.
or do you think your different from the rest of us and shouldn't have to pay back money you've frittered away on luxuries?
I'm sorry if this sounds harsh but this is the kind of thing that affects us all via interest rates, charges etc when lenders have to make back monies lost.
Do the "right" thing.

wherediditallgo

Hi niigata & welcome,

I know very little about going BR from overseas, & I think your best bet is to take professional advice, as you'll be able to explain your particular circumstances. The following organisations offer free advice that's also non-judgemental.

Consumer Credit Counselling Service - they have an online Debt Remedy service where you can input details about your situation, & it will tell you what they'd recommend.
National Debtline
Citizens Advice Bureau

It's going to be a bit awkward for you to telephone them bearing in mind zone time differences, but you should be able to find their telephone numbers & e-mail addresses on their sites. If you can make initial inquiries from the site, you should be able to liaise with them about a mutually convenient telephone appointment. You can also look at the Insolvency Service site for more information about going BR & the alternatives that may be open to you. Feel free to post here if you need more info/help with paperwork etc. Good luck.

wherediditallgo

wbk666 wrote: »

Personally i'd say pay your debts
you've had the cash now its time to give it back.

contact the companies you owe and explain your predicament, most are helpful if your honest and WANT to sort things out.
or do you think your different from the rest of us and shouldn't have to pay back money you've frittered away on luxuries?
I'm sorry if this sounds harsh but this is the kind of thing that affects us all via interest rates, charges etc when lenders have to make back monies lost.
Do the "right" thing.

I think we can take it that's not the case, as the OP says:

niigata wrote: »

I hope that by posting some detailed information on my own situation you can help me to make an informed choice of how I can progress next! From reading the forum I think that Bankruptcy may well be the best option but maybe some of you guys are more knowledgeable than me on this matter!!

niigata wrote: »

I have NEVER missed a payment to ANY of the companies I owe money to.. so should I be able by miracle to clear this I would probably have a very good credit rating… I have somehow managed to scrape to get the money together every month for the last few years.. mainly due to the fantastic support of my parents who after university let me live rent free at home. However I found I was mainly only having £50 to live for the month after paying my DDs and sometimes nothing at all!

niigata wrote: »

I sold all my assets to my father for £10k which I used to pay off a couple of other cards (eg store cards) and leave some funds in my current account to pay direct debits.

niigata wrote: »

I have not used any of my credit cards since coming to Japan (nearly two months). I have only used my current account to pay monthly direct debits and less than £400 to my father for some money I owed him. Is this an OK situation? Obviously if I was heavily spending on my cards it would seem dishonest and like I am using my UK money to fund my life in Japan which I have not at all – its totally separate.

They're clearly looking for advice on the best way to resolve the situation, rather than the easiest way to get out of paying their debts, & are watching their spending so as not to worsen the situation. So let's not start off with a new member by making judgements about them, something Martin (the site owner) is very clear is not welcome here.

OP, some things will be affected whether you go BR in the UK or overseas, such as your bank accounts, your access to credit (your credit file will be affected for 6 years) etc. Your best bet is to contact the organisations I've listed above for personal advice appropriate to your circumstances.

niigata

Hi guys,
Thanks for the info.. I will get in contact and make some enquiries...
Regardless of how I progress I have certainly had my eyes opened by whats happened and will be making things right from now on!
(Sorry for not responding sooner.. I didn't get an email update from the site saying any posts had been made.. maybe its an option I have to turn on!)

niigata

UKJapan Total Payments End Date (Loans)Egg Money £ 2,405.66 £ 48.77 INCOME¥230,000.00Egg Loan £ 3,989.69 £ 133.59 28th May 2010Halifax Credit £ 2,473.13 £ 50.00 Fixed OutgoingsMBNA Credit £ 3,049.00 £ 69.81 Insurance¥9,333.00Barclaycard £ 2,300.00 £ 33.00 Tax¥5,610.00HSBC Grad Loan £20,573.89 £ 348.71 59 Payments - 4.9yrsRent ¥64,600.00HSBC Credit £ 7,124.98 £ 223.00 Gen Ins¥1,370.00Student Loan £10,000.00 £ - TOTAL¥80,913.00 £51,916.35 £ 906.88 Variable SpendingBroadband¥2,500.00Food¥20,000.00Eating Out¥40,000.00Misc¥20,000.00TOTAL¥82,500.00£1 = 235 YENTOTAL Outgoing ApproxLeftover¥66,587.00¥163,413.00Sterling£283.35

niigata

Just did the budget above..
Problem is after living costs in Japan I really only have approx £280 I can throw at my debt in the UK.. however currently the monthly payments exceed £900.. Im wondering if anyone has had any experience with an IVA and whether this would be a viable situation? Would £280 split between the banks pass? Would they even take "foreign" earnings into consideration?

meehank

Hi, if you are looking at offering a YEN equivalent of 280.- GBP you might want to check what transaction and conversion charges your Japanese bank would charge you for sending payments to the UK each month - my experience in Austria has been that the UK creditors will only accept pound sterling payments, and the Austrian financial institutions want to slap 26.- Euros onto each transaction made - in my case that meant that the transaction charges alone wiped out my disposable cash and I was unable to make a meaningful offer of regular payment. Payplan, who looked into the possibility of setting up an IVA for me, reluctantly advised bankruptcy as my only option, as they said the creditors were not going to be willing to accept the low offer I could realistically manage. My monthly minimum payments were approx. 660.- and I was able to offer 200.- per month. Having said that, just because the IVA did not work for me, does not mean your circumstances might not be such that your creditors are willing to accept the arrangement, so it is definitely worth speaking to one of the free organisations that are often mentioned in this forum. (They are also very helpful about calling you back at a time that suits you, even if you are overseas.) Good luck.

niigata

Made an appointment to speak to CCSS Monday at 3:15 (11:15pm Japanese time!)
Also spoke to another company today who were amazingly helpful but I don't think I should post their name just incase...
Anyway, with my debts at approx £40k the biggest problem I have with an IVA is that the largest debts are with HSBC and they demand a lot more money back then most other creditors.. so she summed up that I would be looking at a minimum £358 payment towards the debt when I can only afford £258 (before bank charges in sending the Yen payments to the UK!)
She honestly said bankruptcy was the best option...
HOWEVER.. still a couple of worries...

1 - Meehank may know this.. did you have to return from Austria to go bankrupt or can it be done whilst overseas.. and more importantly.. will it effect your VISA status..

2 - After the 6 years is up... apart from not holding certain jobs.. are there any long term financial issues.. I heard mention of someone who went bankrupt 25 years ago but was recently asked to pay up a large sum of money towards costs.. only a few years ago!! That is a major worry..

If both of the above questions are an all clear then it seems bankruptcy may be my best option.. as I simply don't have the money for an IVA.. Otherwise I may have to look at robbing a bank just to do an IVA :eek:

Yet again, thanks for the great advice so far and that I continue to get.. I really appreciate hearing from people who have been in this situation.
It's nearly 1am here.. so I better go to bed and stop doing spreadsheets trying to work out how much I can save towards an IVA..!!

meehank

When I was looking into the different ways of declaring bankruptcy, the overwhelming weight of opinion (both on MSE and on other related forums) indicated that it is best - where possible - to declare in person. When you are resident overseas, you need to do this at the relevant section of the High Court in London. (You can find info about this on http://www.insolvency.gov.uk)

Attending in person provides you with the opportunity to show the judge and OR that you are taking the matter seriously and are making every effort to resolve the situation, plus you can immediately provide answers on specific questions about your debt.

Where it is financially difficult due to high travel costs, or in your case if you would be risking your permission to re-enter Japan, you can appoint someone to represent you at court by using a power of attorney - this can be a financial or legal professional (incurring costs!), or it can be a friend or family member. The interview(s) with the OR can subsequently be arranged to be done by telephone.

Somewhere on this forum (sorry, I have just looked, but cannot seem to find it right now), there is mention of a UK company that will "deal with your bankruptcy for you" (for a fee of course), while you are overseas - I have not followed any discussions about that particular service, except to note that caution is advised.

As far as the visa question is concerned - I am sorry, but I have no clue how that might be affected by bankruptcy. Austria being an EU member means I do not need a visa to live and work here. The Japanese consulate in London may be able to help you.

The biggest problem that I have found is that there are a lot of unknowns for "overseas residents going bankrupt in the UK" - some countries have bilateral agreements, many don't; most of the time you are having to make decisions based on advice that is geared towards UK residents and the lack of absolute certainty about possible consequences is, quite frankly, very scary.:eek:

niigata

Thanks for the info.. so much important stuff to take in!
I would like to double check the info on how you would go about giving someone the power of attornet.. getting back from Japan is going to be a major cost and something I don't think will be possible.. (unless I want to look for a new job when I return here!)
I wish I could find the link to the company who would 'deal' with the issues.. sounds interesting if a little 'dangerous'!
Thanks again for the advice meehank
Still looking into the IVA but at about £100 more a month then I can afford.. (without family/friends helping in the long term) it looks like a dangerous option.. I would have to be nearing the end of the IVA but end up going bankrupt and back at stage 1! An informed decision from the start is the best way!