It seems nowadays with the world becoming smaller and smaller, people are moving all around the globe due to employment opportunities and for warmer climates.  

With this new found sense of space and travel, comes a few challenges along the way.

One challenge is maintaining ones personal finances from abroad, in particular the EU.

As a British Citizen, you can move about freely in the EU and if you desire, move to an EU country to reside.   But what about any debts you have that are based in the UK?

The first and easiest route is to just continue to make the payments to the debts until they are paid in full.  Simple enough.

However, with the exchange rates changing on a daily basis, and the strength of the GBP, for some this proves difficult.  If you retire off to a sunny warm place and take your pension with you, can you still service the debts you may have in the UK based on what your expenses will be?  Possibly if your pension is in GBP, but what if you move and are now paid in Euros?  

In the past the Pound has been strong, and so the exchange rate for the Euro was more Euro’s to Pounds, and it continues to be that way, however it is changing some.

So let’s say you cannot earn a sufficient wage to cover your expenses in that sunny EU place, and service your UK debts, then what?

One option is to look at a Debt Management Plan, making payments of what you can afford each month.  These payments would be in Pounds as I don’t think your UK creditors will accept Euros.  A Debt Management Plan is an informal arrangement to pay back the debts and can be set up by yourself or through many third parties.

Another option, if you feel you cannot afford much each month towards the debts is bankruptcy.  There are a few conditions for this.  If you are residing in any of the EU countries and have been for over 3 months, you must file bankruptcy in that country according to that country’s bankruptcy laws and procedures.  

So what that statement is saying is this, you have a three (3) month window of opportunity to file for bankruptcy in the UK, while you are living in the EU.  You will need a representative to do this for you as it is filed in the High Court in London.

The time-frame here is short, but it is something to be aware of.

What if you fall outside the three (3) month window, then you would need to file for bankruptcy in accord with the laws and regulations of the EU country you are residing in.  And I do know some of those laws are very strict compared to the UK bankruptcy laws.

Also, what if you own property abroad in the EU and do file for bankruptcy in the UK?  This is a statement from the government’s insolvency web site:

Any asset in any part of the world would be classed as an asset in a bankruptcy in England and Wales.  There is now widespread co-operation in many countries in the world between courts exercising jurisdiction in relation to insolvency, including all EU countries.  This means that the OR or trustee in bankruptcy would be able to sell property abroad that is owned by the bankrupt.

I would point out that if the person who is going bankrupt lives permanently in the EU country (apart from Denmark) in the property and has no financial connection with the UK apart from debts, the person would not be able to go bankrupt in the UK.

So as you can see it can get a bit complicated.  But there are options, such as a Debt Management Plan, and also keeping the time frame for bankruptcy in close mind when moving if you have excessive debt in the UK.


If you would like more information about going bankrupt in the UK while living in the EU visit the bankruptcy assistance page.