Living abroad with overwhelming UK debt

BritinBG

I'm not sure my best course of action? We moved to Bulgaria two and a half years ago when my job finished in the UK. We'd previously bought a cheap house (£7000) in Bulgaria with the intention of retiring there. I'm now 60, so a few years off yet. We didn't have a house in the UK as I was a farmer manager and we lived in a tied cottage. I couldn't get another job straight away, so we decided to move to Bulgaria to live in our house there. I'm working here now as a jobbing builder, but it's very bitty and Bulgarian wages are half what UK wages are. Also, there's no tax threshold, so you are pay tax on all the money you earn. On the plus side, general living expenses are lower. 
My problem is that I have around £13000 in credit card debt. It was ok until recently as it was all on interest free deals, but they've expired and now interest has kicked in and the payments have increased. I've had to drop them to minimum payments and even then can't afford to carry on as I just don't earn enough. We are down to our last £1000 of savings and it's dropping by around £200 a month despite working hard to keep up.
I'm worried that bankruptcy might affect my Bulgarian residency and I think as we own a house in Bulgaria (even a £7000 one) it means a DRO is out of the question.
I thought about a loan over five years which would just about b affordable, but not living in the UK precludes this. 
Would writing to my credit card banks (Virgin and Halifax) to ask for some sort of deal over defaulting help?
I'm running out of time as by winter we'll have no savings left. I really don't know what the best way forward is, and it's all that I can think about all the time now

Any advise would be really appreciated.

sourcrates

Well you will get the same answer every other ex pat has had that posted on here in similar circumstances, and the fact is, if you can`t afford it, don`t pay it, as absolutely nothing will happen if you stop paying.

Don`t waste what`s left of your savings paying debts that you can`t full repay anyway.

Although mechanisms do exist to recover UK debt from abroad, as these are all consumer credit debts, collection outside the UK just does not happen, its too costly, and too time consuming to even bother with.

Basically the debts will attract collection activity in the UK, but if your living abroad, that won`t bother you, they will write to your last known UK address, you may get some CCJ`s, collection activity will be the same for those, if no reply, all will go quiet, as they won`t be able to trace you, eventually the debts will go statute barred, and any CCJ`s will become unenforceable after 6 years.

Anything on your UK credit file will not affect you in Bulgaria, basically you can just walk away and forget them, you certainly should put aside all ideas of bankruptcy or insolvency for such a small debt.

BritinBG

Thanks, but ... That sounds a bit too easy and morally a bit off? We have been using one of our grown up kids addresses (rented) in the UK to keep my UK bank going. I'd be worried that my defaulting would show on her credit file and effect her ability to get a mortgage which is something I think she's planning. 
If I write to my creditors explaining, what is there most likely course of action. If I give my Bulgarian address, will they then pursue here?
I appreciate the answer but there must be some downsides to just walking away? 

Voyager2002

BritinBG said:

Thanks, but ... That sounds a bit too easy and morally a bit off? We have been using one of our grown up kids addresses (rented) in the UK to keep my UK bank going. I'd be worried that my defaulting would show on her credit file and effect her ability to get a mortgage which is something I think she's planning. 
If I write to my creditors explaining, what is there most likely course of action. If I give my Bulgarian address, will they then pursue here?
I appreciate the answer but there must be some downsides to just walking away? 

No, they are not allowed to 'blacklist' an address. So you long as you are not financially linked with her (no joint accounts or anything) then poor credit on your record would not affect her.

BritinBG

Thanks ... It feels wrong but I also feel like I'm in a sinking ship. My biggest debt is to Virgin money and it's around £12000. Would they really not accept some sort of loan deal over a default? Is it really better just to bury my head in the sand and ignore them? Feels scary to think of doing that.

Grumpelstiltskin

Remember creditors don't have any morals, so don't worry.

BritinBG

Thanks and yes I suppose when you think how much we as tax payers bailed them all out during the financial crash you're probably right. It's just  that I've always paid my way, so it makes me feel uneasy. Do I write to say I've left the country or just completely ignore letters ect? Could they go ahead and make me bankrupt if they hear nothing? Sorry for so many questions.

RAS

They can't make you bankrupt. And it would make absolutely no financial sense for them to do so as they wouldn't even get the fee back. Pretty much the only people who do that are the HMRC.

What does rather worry me as your decisions have been reactive to date is what pension plans you have in place?

Do you know if there are reciprocal arrangements with Bulgaria?

Have you both done a pensions check to ensure you have enough years to claim the full pension? If not, can you pay up any partial years? And use any savings and excess income to pay the minimum NICs required over the next few years?

BritinBG

Hi, pension wise, we don't have any private ones and my wife has enough credits for a full state pension. I need more but I'm up to date, so intend to pay class 2 NI as self employed living abroad.

RAS

Do check the issue of reciprocal agreements. That's needed for inflation proofing.

BritinBG

We have pre Brexit residency under art50 so should be OK on that front. Assume the Gov don't change the goalposts!