HELP! Can you flee overseas to escape debt?

sharkmark

My brother is in a terrible situation and is currently got his entire head and shoulders in the sand regarding his financial situation. I am trying to help him (thanks to this amazing site) and have a specific question I am hoping you guys can help me with...I am desperate to know on behalf of my brother whether if you have outstanding credit card debts in the UK whether those creditors can chase you for the money (e.g international debt collectors) if you now live in the US. My brother has moved recently to the US but has significant debt in the UK. Due to the terrible housing situation in the US they are struggling to service their debts there and have now missed several payments on the UK credit card.

We have obviously encouraged them to make minimum payments etc but I think now the debt (which I believe is about 40K on UK credit cards) is too large even to make minimum payments.

What are their legal rights and what are the credit card companies rights in trying to reclaim their money. Currently the creditors do not know where my brother is (they don't know he's moved to the states) - will they continue to chase this sum (being quite sizeable) or will after say two years they wipe the slate clean (doubtful I know but I am trying to be optomistic in their current situation which is dire)

Any help greatly appreciated to the questions above - any critisicm of their situation or critisicm of their stupidity in accumulating this debt will not help me but if it helps you to sound off then fire away.

I really just need someone who has perhaps experienced this first hand to let me know whether if they do catch up with them in the US whether they can extract the money from the properties/property they have in the US (it won't cover the 40K debt though which means I guess they'll be declared bankrupt in UK?

Thanks in advance to all those who reply

GreyPilgrim

From what I've heard of debt collectors and the tactics they employ for much much smaller amounts, I can't see them letting something like the Atlantic Ocean get in the way of 40K. It's not a small amount is it...?

As to legal position, I have no idea, but am interested in what the rest of the forum can post.

Burlesque_Babe

sharkmark wrote: »

any critisicm of their situation or critisicm of their stupidity in accumulating this debt will not help me but if it helps you to sound off then fire away.

Hi -I can't help with the legal position in any way, but just to say nobody here will critisise him in any way - we all get into the situation through different ways and we wouldn't ever judge others.

immoral_angeluk

In a word no. His best bet would be to look into bankruptcy or an IVA.

CCCS_Matthew

Hi there,

I'll try and keep this short to start with just to outline a few points.

If the companies he owes money to decide to start chasing him for the debts, they will have to initially go down the normal process of sending him a default notice, passing the debts on to DCA's and eventually going for CCJ's if they wish. If this is the case, your brother is clearly not going to receive the court paperwork to fill in if he is in the USA, so he is likely to automatically default on the CCJ.

This normally then gives the power for the company to send bailiffs, get an attachment of earnings, or a charge on the property. Again this isn't so much of an issue if he is in the USA as obviously bailiffs will not travel to the US, and his property would not be affected by a charging order as it is not on the UK land registry. I assume your brother has no property in the UK?

If any of the companies decide to take things further and issue as Statutory Demand, then they could actually try and file for his bankruptcy. In this case his property in the US would be at risk as it is an asset. This would also be applicable if your brother looked at choosing to go bankrupt himself.

The final option they could decide to do, but is very rare, is if any of the companies are global (HSBC, Barclays etc) they could actually apply to transfer the debt to be transferred from a UK debt to a US debt. If this happened he would need to seek further advice from someone that can provide free American debt advice as this is something I am not familiar with.

Whether the companies go down this route is another matter. The larger the individual debts, the more likely they are going to try and get their money back, but it’s really down to them.

I would suggest he looks to seek advice about his overall situation. Because his situation is quite specific I would advise he maybe be best to speak to our helpline 0800 138 1111 and look at having an appointment to look at all of his options to see the best way to deal with the situation.

Hope this helps for now, feel free to ask any other questions.

CCCS

GeorgeUK

I saw a bit of info when reading the expat boards when trying to get info for another poster. It wasn't US, so can't reallt advise.

Had come across this though http://britishexpats.com/forum/showthread.php?t=489190&highlight=debt

So it looks like the only time things can get really complicated is if you have dealings with an international bank. There are a few other expat boards that may also be able to help, but as Matthew says above, expert advice is needed rather than opinions.

sharkmark

Thanks guys - this is really helpful advice - I will try and extract his head from the sandpit it's in and hopefully get him to now follow some of the excellent advice - you guys are great!

Thanks again

rog2

Before I get shot down in flames, I feel that your brother should look at the options of servicing his debts, from wherever he is, geographically.
In saying that - the UK County Courts, nor their judgements, have no jurisdiction outside of the UK - even in the case of enforcing any bankruptcy order.
Should one of your creditors petition for his bankruptcy, whilst he is abroad, then he would, most likely, receive an 'indeterminate' bankruptcy period - ie no automatic discharge - which would need to be addressed if he returned to the UK.
With reference to Debt Collection Agencies - they, also, would have no power to 'collect' a UK debt, even against a default or CCJ, abroad. This would not, however, stop them from trying, but the only thing they could, legally, do would be to ask him if he wished to make any payment.