Bankruptcy and foreign issues
This fact sheet covers England & Wales. You will need different advice if you live in Scotland.
This fact sheet tells you when you can apply for bankruptcy in England or Wales if you live outside the UK (abroad). Bankruptcy is an official order that ends your liability for most debts after a certain period of time, usually one year. If you are struggling to pay your debts, bankruptcy can help you to make a fresh start. However, choosing to apply for bankruptcy is a serious decision and it is important that you understand what bankruptcy means before choosing to apply.
Use this fact sheet to:
- check whether you may be able to go bankrupt in England or Wales if you live abroad;
- understand what is likely to happen after you go bankrupt;
- understand the effect that a bankruptcy order in England or Wales may have on you abroad; and
- see if your creditors may still be able to take action against you abroad after you have gone bankrupt in England or Wales.
Bankruptcy in England or Wales if you live abroad
If you live outside of the UK, you may be able to go bankrupt in England or Wales in some circumstances.
You cannot apply to become bankrupt in England or Wales if you live in Scotland or Northern Ireland.
When you apply to make yourself bankrupt, your application is decided by the adjudicator. The adjudicator may make the bankruptcy order if your 'centre of main interests' is in England or Wales. Your centre of main interests is usually considered to be the country where you mainly live or earn your living, and in which people would expect to find you.
If your centre of main interests is not in England or Wales, you may still be able to go bankrupt in England or Wales if any of the following applies to you.
- Your centre of main interests is in an EU member state (except Denmark) and you have carried on business in England or Wales in the three months before applying for bankruptcy.
- You have either carried on a business, been ordinarily resident or had a place of residence in England or Wales in the three years before you apply for bankruptcy. You may be considered to have been resident or had a residency in England or Wales if you can show that you were settled or had your usual home there. Temporarily living in somebody else's home with their permission may not cont as a residence.
- You are domiciled in England or Wales. 'Domiciled' is a complicated legal term. It generally relates to the country that the law considers to be your permanent home. It is possible to be domiciled in England or Wales even if you have lived abroad for many years.
You may need legal advice on whether the adjudicator will be able to make you bankrupt in England or Wales. Contact us for advice about how to find suitable legal help.
A bankruptcy order granted in England and Wales will not automatically be recognised abroad and creditors may still take action against you in the country you are living in. For more information, see the later sections How your bankruptcy is viewed abroad, Assets abroad and Foreign creditors.
How to apply
You must apply online at www.gov.uk/bankruptcy. It costs £680 to submit your application. Your application will be sent to the adjudicator at the Insolvency Service. They will check that you cannot pay your debts as they fall due and that England or Wales is the correct place for you to go bankrupt. This means that if you do not meet the criteria described in the earlier section Bankruptcy in England or Wales if you live abroad, your application will be refused. The adjudicator will usually make their decision within a maximum of 28 days of receiving your application. You do not have to go to a court hearing.
If the adjudicator refuses to make a bankruptcy order, they will send you a notice to tell you this. This is called a ‘notice of refusal’. This notice must tell you why the adjudicator did not make you bankrupt. You can ask the adjudicator to review their decision, but you must do this within 14 days of the notice of refusal being delivered. You must give reasons for asking the adjudicator to review their decision, but they can only consider the information you provided with your original application. You cannot provide them with any new information. If the adjudicator still does not make you bankrupt, they must send you a notice to confirm this.
You can appeal to the court against the adjudicator's final decision. You must do this within 28 days of getting the notice which confirms the adjudicator’s decision following your request for a review. If you want to appeal to the court against the adjudicator’s final decision, you will need extra help. Contact us for advice about finding the type of help that you need.
If your bankruptcy application is unsuccessful, you will be refunded £550 of the fee that you paid when you submitted your application.
After a bankruptcy order has been made, you will need to provide the official receiver with further information. The official receiver manages the administration of your bankruptcy. You may be asked to complete further forms or provide certain documents. The official receiver may ask you to attend their office for an interview. In some situations, they may agree to interview you over the phone.
The further information that the official receiver may require cannot be provided before a bankruptcy order is made, and you cannot pre-book an appointment for the interview. However, if you explain your circumstances to the official receiver, for example that you are only in the country for a limited period, they may try to arrange an appointment for you as soon as possible. Alternatively, they may agree that the interview can take place over the phone. You must provide any information that the official receiver asks you for. If you cannot do so, think carefully about whether bankruptcy is the right solution for you. Contact us for advice.
The trustee in your bankruptcy will take control of your assets and contact your creditors. The trustee will either be the official receiver or a separate insolvency practitioner.
How your bankruptcy is viewed abroad
If you go bankrupt in England or Wales and live or move abroad, you may need to apply to a local court to have your bankruptcy recognised in that country.
Whether your bankruptcy can be recognised in another country depends upon whether that country has any agreement about this with the UK. If there is no agreement in place and that country does not recognise your bankruptcy, your creditors could try to take action against you in that country.
The bankruptcy order made in England or Wales could also lead to other implications for you if you live or move abroad. You should seek legal advice in the country that you live in or intend to move to about the effects of a bankruptcy order made in England or Wales. Contact us for advice about how to find suitable legal help.
Previous bankruptcy rules
If you have previously been made bankrupt under an order made before 11pm on 31 December 2020, the bankruptcy should be recognised by other EU member states (except Denmark). This means that creditors will not be able to take action against you in these countries to recover debts that were included in the bankruptcy. However, the bankruptcy could still result in there being restrictions placed on you in a foreign country that you live in or move to. Seek advice in that country about any possible restrictions and what they are likely to be.
All your assets transfer to your trustee in bankruptcy after the bankruptcy order is made. In most cases, this applies wherever the assets are in the world.
The trustee may find it difficult to sell assets that you have abroad. This is because the other country may not recognise their authority. This may mean that the trustee has to take legal action if they want to deal with those assets.
You may need legal advice about the effect of bankruptcy on your assets abroad. Contact us for advice about how to find suitable legal help.
Assets in the EU and previous bankruptcy rules
If you were made bankrupt under an order made before 11pm on 31 December 2020, your trustee should be able to deal with any assets you have in the EU (except Denmark).
If you go bankrupt in England or Wales, the following points apply.
- All of your qualifying creditors in the world will be included. This means that they cannot take action against you in England or Wales to recover the money you owe. A 'qualifying creditor' is a creditor that is owed a debt which gets included in bankruptcy. Some debts are not included in bankruptcy, for example debts taken out by fraud.
- Creditors may still try to take action against you in countries outside of England or Wales.
- If you have any assets abroad, creditors may be able to take action that puts those assets at risk.
This is a complicated area. You may need specialist legal advice. We may be able to help you find suitable legal advice. Contact us for advice.
Creditor action and previous bankruptcy rules
If you were made bankrupt by an order made before 11pm on 31 December 2020, creditors will not be able to take action against you in the EU (except Denmark) for a debt that was included in the bankruptcy.
Bankruptcy is a serious solution. Consider it carefully before deciding whether to apply. There are both advantages and disadvantages to take into account when deciding. It is also important to get debt advice about all of the solutions available to you to deal with your debts. Contact us for advice on the different ways to deal with your debts.