We have written numerous articles on going bankrupt in the UK, whilst living abroad.  In these articles we have covered what occurs and how to go about the process for various countries, America, Canada, New Zealand, and Australia to name a few.  However, the other day we had a client ask a unique question based upon their unique set of circumstances. 

The client had left the UK and moved to Spain for a period of time, acquired debts also in Spain, then moved onto Australia, where they now reside and have for a period of time.  Here is where it gets a bit tricky and technical, they lived in Spain (part of the EU) for longer than the 3 month limit to file for bankruptcy back in the UK, and have been in Australia for less than the 3 year limit that would exclude them from filing for bankruptcy back in the UK.  Are you with me so far?  The question is, where should they file for bankruptcy and can they include the debts they took on in Spain, in addition to what will happen to their property in Spain and in OZ?  Complicated is it not?

The simple answer is this, yes.  That’s the answer to the question, is it not complicated, sorry I could not help but have a little joke there.
But the real answer is this:  they can file for bankruptcy back in the UK and include all their UK debts and the Spanish debt as well.  As Spain is in the EU, they can include those EU debts, debts outside of the EU would be another matter as there is not the cooperation in some instances between the UK and other non-EU countries.

Now what about the property concerns, and those concerns are valid as property is considered an asset and as such could be sold or liquidated to pay into the bankruptcy.  But with the recent decline in property values it is doubtful they would be able to sell it for any kind of profit.

Any asset in any part of the world falls into your bankruptcy estate.  However, the Trustee may encounter problems selling foreign assets if they are not recognised in a foreign jurisdiction as having the power to sell them.  The Trustee may require cooperation from the bankrupt and they may also need to apply for a court order in the foreign country to deal with the asset.  

So in summation:  they can file for bankruptcy in the UK, include all UK and EU debts, and the properties in Spain and Australia could possibly be sold or liquidated from them to pay into the bankruptcy.  Now that sounds a bit easier to understand.

One question the Official Receiver/Trustee may have for someone in this scenario is how they funded all that travel? It is a reasonable question and one that one should get advice from an Insolvency Practitioner in the UK to be prepared to answer the question appropriately.

As for how to go about filing for the bankruptcy in the UK, they can fly back to the UK and do it themselves, or have a representative do this for them.  These cases are heard in the High Court in London.  Myvesta UK offers such a service and more information can be found here and this will save anyone needing to go bankrupt in the UK from having to return.