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How To Go Bankrupt From Abroad

The term ‘How to go Bankrupt From Abroad’ or ‘Bankruptcy Tourism’ is described as the phenomenon ‘whereby residents of one country move to another country / jurisdiction in order to declare a bankruptcy there, before returning to their original country of residence’. This is done in order to facilitate bankruptcy in a jurisdiction where the insolvency laws are considered to be more favorable

Possibly the most extreme example of this was a few years ago, when literally scores of Germans settled in Tunbridge Wells with a view to avoiding a bankruptcy period of seven years in their native country. Closer to home, more and more Irish nationals are relocating to England / Wales to take advantage of the more lenient laws. Provided the Foreign Nationals can prove that their ‘Centre of Main Interests’ is in the UK – and it’s not that hard – the bankruptcy will be granted.

These days, the Insolvency Service takes a long hard look at all cases which comprise a large proportion of foreign debt. The bankruptcy is not granted on the day, but referred to the local Official Receiver, who interviews the individual before making a decision. Even so, provided the individual has done ‘all the right things’, it is mighty difficult to prove that the person is a tourist.

What are ‘the right things’? Obtaining a National Insurance Number, registering on the Electoral Roll, obtaining a Tax Reference Number and opening a local bank account, would all suggest an individual is here to stay. There are companies which know how to guide prospective bankrupts through the rapids and make a tidy living from it.


A review of websites offering assistance for foreign nationals wishing to declare bankruptcy in England, the main selling point is clear – the average period of bankruptcy is only 8 – 12 months in England. However, it is a common misconception that the bankruptcy ends once the bankruptcy period is over and the individual has been discharged, as the bankruptcy will go on for as long as it takes a trustee to realise a bankrupt’s assets for the benefit of creditors.

Yes, a discharge from bankruptcy allows an individual to act as a director and ends the risk of a trustee pursuing further assets such as property or income. However, English bankruptcy legislation provides that all property (save for the matrimonial home after three years and any pension) can be pursued by a trustee in bankruptcy ‘wherever situated’ and therefore applies worldwide.

It is fair to say that assets based in other jurisdictions can be more difficult and costly to realise and this can create difficulties as funds in bankruptcy estates tend to be limited. However, that is a commercial reality faced by any insolvency practitioner trying to realise assets in a foreign country, not as a result of English legislation.

While the English courts are prepared to be flexible in allowing EU nationals to make themselves bankrupt here, in accordance with the European principle of free movement, debtors should not think that they will get an easy ride from English bankruptcy. If there are assets to be realised – wherever those assets might be – an English trustee in bankruptcy has the power to realise them.


Bankruptcy UK-Debt Solution Bankruptcy Experts

Bankruptcy UK-Debt Solution Bankruptcy Experts