Bankruptcy Tourism

Posted in 'Dealing with Debt' by Barry Stamp

07 October 2009

CreditAction, the national money education charity, has warned that ‘hundreds of Germans and Austrians’ have been coming to Britain to take advantage of our more relaxed bankruptcy laws.

It says that the Government currently checks all bankruptcy applications from people who have been resident in the UK for less than 12 months. In order to be considered as eligible for bankruptcy, foreign nationals must be ‘economically active'. This is defined loosely and can include being temporarily employed, having a bank account, paying rent or simply having a National Insurance number.

Individuals can be declared bankrupt in a UK court and 12 months later can usually have their debts written off and be released from bankruptcy. This compares to a wait of seven or nine years in Germany. In addition, the UK bankruptcy will not appear on German or Austrian credit files, so the UK route is an attractive one for financially beleaguered tourists.

Insolvency experts say that the number of foreign debtors seeking bankruptcy in the UK has risen by 20 per cent, with Royal Tunbridge Wells in Kent being labelled the ‘debt capital of Europe’. Credit Action reports that a Kent based German debt expert is currently helping management consultants, doctors, accountants, dentists and lawyers to discharge their bankruptcy.

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