Living abroad with overwhelming UK debt

BritinBG

Just for clarity, we didn't come to Bulgaria to escape our UK debt. We came as we already had a house here purchased in 2017 as a future retirement home. I have worked self employed since we moved and was just about coping until the card deals expired. I hadn't realised the payments would virtually double. That, as well as things like a few problems with my old van here, and paying BG health fund fees tipped the balance. 
I've always been a grafter and have never claimed benefits in my life. I also worked throughout Covid as my occupation wasn't effected and didn't require isolation as it was a pretty isolated job anyway.
I feel like a failure for getting so far in debt in the first place, but with a previously good credit rating and a seemingly secure job, things spiralled. 
Thanks for the replies and help so far.

RAS

Great. Hope everything goes well.

BritinBG

I'm still not sure whether I should just ignore my creditors (Virgin and Halifax cards) or write to say I've moved abroad and simply can't pay as much (or anything)? Is the best advice really to just forget it and get on with life outside the UK? 

sourcrates

Its basic arithmetic, if your numbers just don`t add up, what else do you think you can do?

There is no moral aspect with money lenders, just an automated process they put in place when you don`t pay your debts, I`m just giving you the facts here of what you can expect to happen, with no judgement on what you choose to do with that information.

Be aware, if you give them your current address you will open the floodgates to a plethora of debt collection letters and phone calls if they get your number, that`s computer dialling at any time of day, multiple times a week, do you really want that to happen?

Its much better to stay off the radar and lead a peaceful life, if you cant pay your debts what good does telling them that achieve in your position, if won`t help you one bit, it`ll just make things more difficult, but its up to you to decide.

DankVielen

BritinBG said:

Just for clarity, we didn't come to Bulgaria to escape our UK debt. We came as we already had a house here purchased in 2017 as a future retirement home. I have worked self employed since we moved and was just about coping until the card deals expired. I hadn't realised the payments would virtually double. That, as well as things like a few problems with my old van here, and paying BG health fund fees tipped the balance. 
I've always been a grafter and have never claimed benefits in my life. I also worked throughout Covid as my occupation wasn't effected and didn't require isolation as it was a pretty isolated job anyway.
I feel like a failure for getting so far in debt in the first place, but with a previously good credit rating and a seemingly secure job, things spiralled. 
Thanks for the replies and help so far.

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? 

I used to feel the same way about it being a bit off, I serviced my debt with nominal amounts for years which just extended the six year statute bar, more fool me.

It is only when you step back and have a helicopter view of the cycle of debt that you realise the objective, which has been stated on forums like this many times by many people when asked why do they lend money at zero percent for a small fee that seems so reasonable at a few percent.  

The answer is that their goal is to put you in a place where you can afford the repayments but can't afford to pay off the loan, not for years or even a lifetime.  When credit cards become unaffordable they have a plan for that too, a consolidation loan with a fixed interest so early redemption makes no financial sense.  After that they probably do not want you unless you have secured debt, they are done with you and throw you out like an old sponge.

What really tipped my opinion on this was when it was explained that while we earn money lenders invent money on their computers, so unlike us they never feel a loss, just the profit.

When I try to help people I come across in bad debt I task them with creating a simple spreadsheet showing the monthly payments on a credit card, with the interest being applied monthly, the monthly payment, a column for the balance and the total interest paid.  So at the top there are all the rates, the minimum payment as a percentage or amount.

I then have them enter the desired interest rate that lenders will want to lend to you at, which is 39.9% with the lowest monthly amount they can get away with.  If you do that spreadsheet you will see that at 39.9% some of the repayment amounts or percentages mean the debt does not get lower, there are rules about these but in the reality you now face you will only be able to pay what you can afford after your money runs out.  At that point you will be in breach of the agreement so they will whack up the interest rate until you wise up 

Yesterday I discovered MSE has a page that does this although I think the spreadsheet exercise helps one see how obscene it is as it takes you time to create it. So I put your £13k into the MSE minimum payment calculator and put in the figures for a token payment of £50 or a low repayment of 3.5%, then tried £50 or 5% and £100 or 5% it spat out these figures

---

Making the minimum payment of: The greater of 3% of balance or £50.

Making the minimum payment of:The greater of 5% of balance or £50.

Making the minimum payment of:The greater of 5% of balance or £100.

---

This £13,000 debt will take 77 years and 6 months and cost £133,275 in interest.

This £13,000 debt will take 11 years and 8 months and cost £15,271 in interest.

This £13,000 debt will take 9 years and 3 months and cost £14,536 in interest.

---

https://www.moneysavingexpert.com/credit-cards/minimum-repayments-credit-card/

My understanding is that setting up the computer record and paying the central bank for such a debt costs arounf 3%, it used to be 5% in the USA but that got reduced to 0%.

Your 3% arrangement fee adds say £400 which means means their fee to the central bank is £0.00

Now ask yourself, can anyone in any business on the planet invent money on their computer and get between £14500 and £133,275 profit?  Of course with zero costs to create "the product" there is still the cost of their staff, their building and marketing, but those are just choices, one could operate this business with a website and a very low marketing budget. 

Remember all those "starter" cards that cost 39.9%

Oh and I forgot to mention what happens when you stop paying, that is another profit opportunity, they sell your debt for between 3% and 12%, this could be by auction for a sandwich of debt products that do not look good on their accounts. Selling off your bad debt not only gives them this final fee but it clears space in their ratios to lend that same amount to another one coming every minute.

The real sin in all this is not the usury (as defined in all holy books) but the fact that the person they sell the debt to has the right to claim the full £13k, this means our economy will never get rid of the bad debt.  The vermin who buy up this bad debt and their staff are a special sort of stain on a bath after the water has run out.

So when people talk about having a license to print money this really exists, the lenders are licenced by the FCA which keeps out everyone but the inner party members and the proles (us) just pay on the never never, a term that seems so apt as it will never be paid off until you take the DMP route.

I owed over 7x what you owe in consumer debt, I took the nuclear option, I decided I was not going to pay a penny of it, not 60% off as is common on a DMP, not 95% which is common when the debt is about to expire but 0.00.

Despite my debt being long gone yet another buyer of naff debt has decided to breach all the FCA rules and pretend they have a right to enforce this debt, well at least £25k of it, that is on top of the £15k a different buyer did last year.

So now that you understand this business I hope you have no qualms in getting rid of this debt at no cost to you.

I would advise that you do not tell them you are abroad, send them an email from a UK IP address (use a free VPN if you need to) in the email write to them and just say that due to life changing circumstances you will not be making any further payments AND STOP PAYING IMMEDIATELY.

Then do not engage with them, not a word as acknowledging a debt resets the six year enforcement as does making a payment of any amount.  The default notices will come in time, but the email makes the default come faster because it does away with the period of them writing and saying they will accept a token payment, or a lower interest rate or offers of a consolidation loan.  Most of them are savvy enough to know that you know their game and les jeux sont faites.

I like to keep a barrier between creditors and my address, phone number and email, so I advise you update them of a new sim and email (because of scammers), that way when they sell the debt they will pass on an email and phone number you don't use.

The DMP sticky is about getting to a 60% offer but I say "why stop there", I did not stop at 95% and only one went for a CCJ, which was as much use to them as a sheet of toilet paper.

If you are worried about your family find a friend who does not care and is not related to you, once it is registered you can pay £60 a year to redirect your mail back to your kids if you want.  I would not advise using that address for important things like pensions.  Also maybe consider opening a different bank account if you bank with the same banking group as these cards.  Otherwise they might take a peep at your bank statement and see you are not in UK, also they tend to get a bit bitter.  I stayed with my bank and they did not remove my overdraft, they just reduced it, I paid it off when interest rate went to 39.9%, it is lower now but it is for absolute emergencies, not than I have had any.

Hope this helps ease your mind about doing this.

BritinBG

Blimey! That was some reply, thanks.
I'm not worried for me, but having googled the problem, some things I have read do concern me. 
1. Will bailiffs be sent to the last address on my record, which is my daughters. We only used that address to keep the bank going as they would have closed the account without a UK address
2. Other places mention selling the debt to collectors in the country we now reside?
3. Another that CCJ's don't expire after 6 years and can be enforced if we return even if after that time?

sourcrates

BritinBG said:

Blimey! That was some reply, thanks.
I'm not worried for me, but having googled the problem, some things I have read do concern me. 
1. Will bailiffs be sent to the last address on my record, which is my daughters. We only used that address to keep the bank going as they would have closed the account without a UK address
2. Other places mention selling the debt to collectors in the country we now reside?
3. Another that CCJ's don't expire after 6 years and can be enforced if we return even if after that time?

There are a lot of stages to go through before bailiffs can become involved, and as its consumer credit debt, any bailiff that is engaged will be the county court bailiff, a servant of the court, not these private HCEO`s you see on  the tellybox.

Its very unlikely a CCJ will be further enforced if all has been quiet up to that point, it costs them money to enforce debts, the bailiff would just inform the court of whatever they were told by the occupier at the address they were sent too.

As for selling the debt, again, yes, that will probably happen, but to UK based companies, who will go through the same collection activity as I described before, and then if no success in finding you, they will either sell it on again, or write it off, they won`t come looking for you in Bulgaria, nor sell it to a Bulgarian DCA, just doesn't happen.

And lastly, limitation act, section 24:

Sec 24 Limitation act 1980 Time limit for actions to enforce judgments.

(1) An action shall not be brought upon any judgment after the expiration of six years from the date on which the judgment became enforceable.

So I would not take any notice of what "other places" tell you.

GardenBirdWatcher

@BritinBG, I was in the same situation as you about 15 years ago. I had about £20k of debts in total across various loans and cards, which I had been paying off without problem until I lost my job. I then spent 6 months eating through my savings looking for a now one while continuing to pay them all. I eventually found a job overseas, but in a country with much lower salaries than the UK, meaning that while I could live comfortably there due to the lower cost of living, covering the contractual payments for the debts would be impossible.

Like you, I initially thought that I should do the "honest" thing and contact them to explain the situation and try to come to arrangements with them to make reduced payments to them. But then a friend pointed out how much interest I had been paying over the period that I had paid and I quickly changed my mind. 

The lenders eventually found out the family member's address that I had given my bank and life insurance company and started sending the usual letters, followed by the hollow threats from the vultures that they sold the debts to (apparently the occasional letter was still turning up a year or so ago when the family member moved from that address). I still have the email address that I used back then, although it is no longer my main one, and occasionally receive emails from the latest company that has bought one of the debts. I just flag them as spam without even opening . But in all that time, not one single person turned up at my relative's address looking for me and there has been no indication that any CCJs were registered against me at the address.

I've been back in the UK now for a couple of years and so far, no one has contacted me either by letter or in person.

DankVielen

BritinBG said:

Blimey! That was some reply, thanks.
I'm not worried for me, but having googled the problem, some things I have read do concern me. 
1. Will bailiffs be sent to the last address on my record, which is my daughters. We only used that address to keep the bank going as they would have closed the account without a UK address
2. Other places mention selling the debt to collectors in the country we now reside?
3. Another that CCJ's don't expire after 6 years and can be enforced if we return even if after that time?

Hi BritinBg

1. BAILIFFS

There are a lot of myths about Bailiffs and people get scared because of the Can't Pay and Sheriffs series, but those High Court guys only collect non-consumer debt and to be honest they are not that successful.  I rang them for a Landlord friend of mine and one of the first things they did was to warn me that the TV is a compilation of successful attempts while in real life these only represent a fraction of the calls they make. 

County Court Bailiffs spend most of their time collecting things like CCJ's for unpaid rent and evicting Tenants, it takes between 6 to 12 weeks to get them and they are not very successful. 

The householder does not have to let either type of bailiff into their home, in fact it is a BIG mistake to let them or anyone into your home because it can only be detrimental.  For example for a TVL goon it just gives them intelligence even if you don't watch live TV they will try to manipulate the occupier and most prosecutions are against women and disabled people who are often bullied into some sort of admission of liability.   For the HCEO if you let them in it gives them the right to gain entry in the future, they do not care about your debt, they care about the services they can charge for, like £800 to make a list of assets (which are usually worthless).  If one lets them in they will threaten to take away stuff they are not allowed to take and their speciality is threatening to take the playstation of your kids. 

Your daughter does NOT have to let them in nor does she have to engage them, if she gets caught on the hop coming home from work she should not go in with them there.  In such a situation I would "who are you and what do you want", if they do not answer that question tell them "I don't know who you are and you have failed to identify yourself, I am now asking you to  get off the property and I am removing your presumed right of access. NOW LEAVE or the Police will be called."  If a property is a flat once one person tells them to leave a communal area they must leave immediately.

Really their only hope is to find a car registered to you that they can seize and auction, but they fail to tell the debtor that they only take cars valued over £1800 because the cost of the tow, initial storage, then tow to auction will exceed that. So they call the creditor and say "we have this car here, it is only worth £2k so are you prepared to pay the £1800 initial fee, oh and by the way our commission on collection of £2k will still apply". Only a vindictive creditor would pay that.  They would do a check for finance on the car and who it is registered to, but they can't take control of goods that do not belong to you.

Both types of Bailiff are only allowed to make peaceable entry, which means you left a door open.  In 2014 the rules were changed to say they could not go through an open window, but they will and do break those rules.  They will climb over locked gates and can go into a garage if it is not attached to the house.  

The golden rule for debtors regarding bailiffs is DO NOT ENGAGE, I had them come for a business debt but it was never registered at my home.  I am sure they would have loved me to argue with them but I did not engage.  They knew I was in, I knew they knew I was in, they knew that I knew that they knew I was in, but still I did not engage and so they went away.

The golden rule for creditors regarding bailiffs is only instruct them if you are absolutely sure that the debtor has the funds being sought.  What is more likely, if they can show activity on a credit record, is that they seek an attachment of earnings order, these are very rare because it is hard for them to know if activity means you have money.  If they see you apply and get 3 more credit cards and a big overdraft they will assume those lenders can see some money to justify their risk.

https://nationaldebtline.org/get-information/guides/attachment-of-earnings-orders-ew/

2. SELLING CONSUMER DEBT TO EU COUNTRIES

Many of the Debt Consolidation Companies that buy the debt have ultimate owners abroad, for example in Sweden, but the contract is Governed by UK Law which means it is Subject to UK FCA rules. In theory if they find  your address a Debt Collection Company might remind you that you owe the money but they will not do active enforcement.  Also things are different since we left the EU, I actually lived in the EU for a period of time when we were part of it.  I used the address of a friend as I was all over the place, I was briefly pursued for a private UK debt to a parking company. It looked pretty scary, quoted all the bilateral agreements blah blah blah so I asked the locals and they told me to ignore it. Nothing further happened. 

3. Debt Expiry myths and realities

You have not even defaulted yet and you are worried about CCJ's, I had so much debt with almost every company who you see people on here complaining about only one company pursued a debt to a CCJ.  That company was weird because they did not really do much chasing, they got the "backdoor" CCJ at a very old address that preceded my last known address and I think it was a couple of years in before I found out about it. I had some seriously strongly worded letters from what I would call Debt Solicitor firms.  the CCJ expired, there has been no further attempts at enforcement since.

Further more I had a £12k debt with Halifax and two debts with MBNA that between them were over £25k, none of these got a CCJ.

To understand the debt expiry you need to understand the stages of the debt itself, which briefly are

Pre-Default  - This may be internal collections or a Debt Collection firm

Post-Default - This is where you are informed the Debt has be sold, interest frozen and the Debt Consolidator will be in contact. 

These debts may only be chased for 6 years and any CCJ must be obtained within the 6 year period of the default, a CCJ may be pursued for 6 years taking the total potential to 12 years.

So when a company is going after a CCJ it is usually in year 5 because if they went after the CCJ in year 2 they would cut the maximum claim time to 8 years.  They do it quite early in Year 5 because if they make a mistake they may need to file again so they leave themselves plenty of time.

When the debt is pre or post default the enforcement period is RESET to 6 years if you make a payment or acknowledge the debt (usually in writing).  If you try to seek a payment arrangement you are acknowledging the debt, this is why the general advice is often DO NOT ENGAGE.  

Once a debt is sold the date of default letter can be the date from which the 6 years starts, it depends on the terms of the original agreement.

After the 6 years are up it is known as Statute Barred, i.e. the Limitation Act is the Statutory Legislation that prevents enforcement.  There are also a plethora of FCA CONC rules around Statute Barred debts, such as pretending they can be enforced when they can't be or continuing to harass a consumer when they have informed the person chasing the debt that they believe the debt is Statute Barred.  See this link for details of Statute Bar and case law that refers to date of default being the relevant date.

https://forums.moneysavingexpert.com/discussion/6027755/statute-barred-debts-and-the-limitation-act#latest

WARNING: What you need to be careful of is the date being close to statute barred, but not happened yet.  

Such contact is often done to try to obtain data or to get you to acknowledge the debt and reset the time the Statute Bar applies from.  Some inscrutable Debt Collectors allege payments that were never made, they later say they made a mistake but now that you have acknowledge the debt can they come up with a repayment plan.

This is yet another reason for the DO NOT ENGAGE approach.

When the debt is sold it is remarkable how bad the Lenders are at providing the original contract or full details of the debt and without some of these the debt cannot be enforced. Obviously if a debt has recently defaulted you do not want to remind anyone chasing it that you want them to prove the debt exists, but if it has been many years then a PROVE IT letter from the link below may be appropriate.  If it has been longer than six years it might be statute barred, the same link has templates for these. 

https://forums.moneysavingexpert.com/discussion/6027800/debt-free-wannabe-sticky-provit-statute-barred-letters-defaults-help-and-guidance-all-here#latest

The Limitation Act says that debts of this nature may only be enforced for 6 years but once a CCJ is obtained, then things change, note it is important to consider the word obtained.  There are Debt Solicitors that mislead consumers with Letters of Claim (a pre-action letter as defined in Pre-Action Protocol & Practice Direction Civil Procedure Rules).  

What SOME of these firms do is add facsimiles of forms that a Court may send out once a claim has been filed.  When a debt advisor or sees these they assume the claim has been filed, but if that were the case the forms would have the MOJ form number on them and they would be sent by the Court not the Solicitor.  I have personally received what I would call a fake CCJ, this was was a copy of what a Judgement would look like had a Court heard a claim and made the order.  Both of these are shoddy practices and should be reported because it is only when there are widespread complaints that the regulators will introduce serious fines .

If a CCJ IS obtained you will be able to find out by using the Trust Online service by Registry Trust Ltd

https://www.trustonline.org.uk/

Whilst it is true that a CCJ debt remains owing it cannot be enforced without the creditor going back to Court, there is pretty tight case law around this so it is very rare, but it is another reason why you DO NOT ENGAGE and stay below radar, especially if you are out of the UK.  So while it is "possible" for a creditor to ask the Court this is extremely rare, I think mainly because if they did and someone appealed, then charities might get behind that appeal seek case law that leans toward the Consumer, if that failed then better legislation would be sought to protect the Consumer.  I gather that if you were to die with loads of money then in theory a creditor may make a claim against your estate. 

So stay off the radar, do not engage once you have told them you are not making further payments and do not worry about things that have not happened or may never happen.

Stop paying now, do not ask them but TELL them

"Due to a change in my financial circumstances I will no longer be making any payments towards the debt with the reference number above"

Some people seek a DMP to come to an arrangement on lower payments, personally I think this is a mistake, to me there are only two situations. You either want to get 60% off or you want to wait out the debt forever and not have anything to do with credit.

Both start with ceasing payments and NOT ENGAGING, then it is a matter of waiting for the 60% offer which may not come until the Debt Manager who works for the Debt Consolidator and appoint Debt Collectors, has instructed the 3rd or 4th Debt Collector, each is given 3 to 6 months to achieve something.   If they take too long then some debtors think they might as well wait out the six years.  The debt is sold for pennies in the pound, I have had 95% off offers just before a Debt Consolidator themselves sell on the debt to another Debt Consolidator even though they know it is Statute Barred.

Do not email them from Bulgaria, use a VPN that has a UK location, you will find some on free browser VPN extensions. Ideally to save you messing up use a different browser for dealing with them. Set your browsers to nuke cookies (set to since the beginning of time) and use an app like cCleaner to nuke all cookies. 

Before you do this, send them an email updating your email address and phone number to new ones, have your daughter get a SIM at Tesco and have her create an email address using a different online mail provider.  Do not respond to calls or emails to the old number or email.  This controls what data is given to the Debt Consolidator and their agents.  Later you can use GDPR to even stop those.

For now I advise you aim for 60% off and review your position as and when, remember to put more or less what you would have paid them into an emergency fund so you have the 40% of the debt to pay if you make a decision to pay. Do not worry if you can't afford it, keep up the DO NOT ENGAGE and a similar offer will come from the next Debt Collector firm appointed by the Debt Manager.

Malawi0706

Hi, could you please share what you did? 

I have very similar situation…