FAQ | UK Bankruptcy

Does my credit rating in New Zealand become affected if I declare bankruptcy in England?

This is one of the most common questions that we are asked when people are considering filing bankruptcy from New Zealand. We can confirm that if handled correctly, filing bankruptcy in England will not affect your credit rating in New Zealand.

As a company we offer a twelve month support service to our clients once the bankruptcy has been approved. This covers the normal duration of a bankruptcy in England and allows us to remain in contact with our clients throughout the bankruptcy period. We carefully monitor how these cases are handled and we have not seen any impact on credit ratings in New Zealand. We tend to find that when you move to start a new life overseas your credit history begins at that point and your UK credit history is not taken into account in New Zealand.

Your UK credit history will reflect the bankruptcy for a period of six years. This starts from the date of the bankruptcy and will affect your ability to obtain credit in the UK (but thankfully not abroad!).

Do I have to fly back to the UK from New Zealand to file an English bankruptcy?

We can confirm that you do not need to return from New Zealand to file your bankruptcy in England. Our company will prepare everything for you and guide you through the whole process.

By using our assisted bankruptcy service you can continue you normal day-to-day life in New Zealand without disruption. We gather information for the bankruptcy from you via email in an easy, user friendly process.

The whole process is designed around the client and ensures that the bankruptcy will cause minimal disruption with regards to work and family life.

Is there a time limit that is applicable to declaring bankruptcy in England if I have moved abroad to New Zealand?

Yes-you have a period of three years from moving abroad to file your bankruptcy in the UK. You also must have moved from an address in England or Wales to benefit from our service. This is because your last address in the UK will dictate where your bankruptcy must be presented.

If you have moved from Northern Ireland or Scotland we may still be able to offer you advice and assistance however, as the Insolvency Laws are slightly different in Northern Ireland and Scotland the High Court of London would not be the Court that would deal with your bankruptcy.

If I go bankrupt in the UK from New Zealand, will I have to pay any of my disposable income to the Official Receiver in England?

When a person files for bankruptcy in England it is the Official Receivers duty to look into the persons conduct and affairs in relation to the bankruptcy itself. As part of this process the Official Receiver will also look at a persons assets and income.

A person that has filed bankruptcy will be given reasonable allowances for items such as rent, food, utilities, clothing, medication and healthcare and other standard forms of expenditure. These allowances are based on UK national statistics and as such, must be slightly altered when a person lives in another Country.

An insolvency examiner will be applied to a persons bankruptcy and the examiner will consider each case on an individual basis. Higher allowances are given if the person has (for instance) children to feed and cloth, and in cases where the person has a partner the insolvency examiner would expect the partner to contribute to the general monthly cost of living (if the partner or spouse is working).

Once a reasonable monthly expenditure has been calculated and agreed, any disposable income would be requested from the person in bankruptcy for a period of three years. This is commonly known as an Income Payment Agreement or IPA. The payment may be as little as £20 but if the person has £500 disposable income per month then this amount would be requested.

The IPA does not extend the duration of the bankruptcy in England; this will still last for one year however, the IPA will run for a further two years and can be subject to review if a persons income increases or decreases during this period.

For further, detailed information on Income Payment Agreements and Income Payment Orders please click on the following link Income Payment Agreements in the UK

I am considering filing bankruptcy in England while living in New Zealand, but I am worried about this affecting my job-will my employer in New Zealand be contacted during this process?

When a person files bankruptcy their employment details are shown on the paperwork. This will include your employment type, employer, employers address and also details of your wages and the amount of tax paid.

As a general rule the Insolvency Service does not want to make a persons position any worse than it is already. They will also benefit from your income if they think that you have disposable income as an income payment agreement would be proposed. For these and other reasons they do not contact the employer during a persons bankruptcy unless the situation would require them to do so.

For example; if a person does not co-operate with the Official Receiver in England and would not confirm their income (normally by way of copy pay slips) these would then be reasonable grounds for the examiner to request this information directly from the employer.

If I declare bankruptcy in England whilst living in New Zealand, is this publicised in any local newspaper; either here or in the UK?

Bankruptcy is now very rarely publicised in newspapers and if you declare bankruptcy in the UK whilst living in New Zealand this definitely would not feature in your local newspaper; either in New Zealand or in the last area of the UK that you lived in.

When a person has been declared bankrupt in England or Wales their details will be listed on an online register which is part of the Insolvency Service website. This will show your name, date of birth and address details. The details are shown for the duration of the bankruptcy and for a further 12 weeks after the date of discharge.

The register itself is not the same as a website which Google (or other search engines) look at and store the information to use when a person carries out a general internet search. A general search of your name online will not bring up a link to the register, so the information is not that evident. If however you carried out a search of the register you would find your details quite easily.

If I go bankrupt in England will my assets in New Zealand be affected and taken from me?

When a person declares bankruptcy the Official Receiver or Insolvency Examiner will consider any assets that a person has in their possession. An asset can be anything from a house to a website and the value of the asset will dictate whether it should be taken for the benefit of the creditors.

Assets such as vehicles will normally have a limit of around £1,500 before they are considered an asset, although the person must also be able to demonstrate that the vehicle is an essential item for their day-to-day life. If they cannot show that the vehicle is essential it may be considered an asset independent of the value of the vehicle. In cases where the vehicle is worth slightly more than the limit of £1500 the person in bankruptcy may be asked to make a payment to the Official Receiver to be able to keep the car.

If a person owns a property in New Zealand the situation can be quite complex. The main area to consider is what sort of equity is in the property and this will dictate which course of action the Insolvency service follows. In all cases where a person has a property in bankruptcy the Official Receiver has an interest in the property and this must be realised for the benefit of the creditors.

Will my bank account be closed in New Zealand if I file for bankruptcy in England?

In our experience your bank account in New Zealand will not be affected by a bankruptcy in the UK. During the bankruptcy examination you may be asked for details of the accounts that you hold and also the balances at the time of bankruptcy. It is also within the Official Receivers power to contact the overseas bank although the bank may not react in the same way as a UK bank that has a duty to co-operate with the Insolvency Service.

We have dealt with many cases where people have applied for bankruptcy from abroad and occasionally a bank may be contacted as part of the bankruptcy process. In these cases the person did not lose the facility of their account and the minimal contact did not impact upon the persons credit record in any way.

How many years does the bankruptcy in the UK last for if I declare bankruptcy from New Zealand and is it possible that I will receive an early discharge from bankruptcy if I fully co-operate?

If you file a bankruptcy in England while living in New Zealand, the bankruptcy will normally last for one year.

It now seems that the early discharge system is being gradually phased out. The reasoning behind this is due to various factors however, the main one is that the period of bankruptcy had already been reduced from three years to one year in April 2004.

It is also worth noting that a bankruptcy can be extended from the normal duration of one year if the Insolvency Service feels that the person has been reckless or culpable in the circumstances leading up to their bankruptcy.

I live in New Zealand and regularly need to travel to the UK for my work. I may have to declare myself bankrupt in England – would this affect me travelling between the two Countries?

The bankruptcy in England will not affect your ability to travel in and out of the UK or New Zealand. If you decide to move back to the UK you should inform the Official Receiver that you have changed address, but the bankruptcy does not apply any travel restrictions upon a person, so there would be no issues with leaving or entering into any Countries.

I have family in the UK and I live in New Zealand. If I was to use your company to help me file for bankruptcy in the UK would my family become aware of what I have had to do?

If you declare bankruptcy from New Zealand, the Insolvency Service will not really have any reason to write to friends or family to inform them that you have been declared bankrupt. There would be no reason to contact your family and your bankruptcy would not be publicised in the local UK papers.

However, it can be very hard to assure somebody that people will never find out about the bankruptcy. You would be listed on a public register in the UK which is free to search and accessible to anybody in the World. Also if you involved your family in any way within the bankruptcy and they had to verify something that was in connection to the bankruptcy itself, the Insolvency service may have to contact them to verify what you are saying.

In general it is very doubtful that they would get to know about the bankruptcy but some things can be out of your control.

I have a property in London, England that is in negative equity. If I file bankruptcy in England from New Zealand am I able to include the property in the bankruptcy? Would the negative equity also be cleared as part of the bankruptcy?

We have helped many clients in New Zealand that have UK property in negative equity. In some cases the property may have been up for sale for some time without a buyer, and in other cases it may be tenanted. Either way if the property is in negative equity due to the housing slump it may be best to include this within a bankruptcy application.

If you include your property in your bankruptcy, any negative equity or shortfall from the sale will become part of the bankruptcy itself. There are many options in this situation and as a company we specialise in this type of bankruptcy.

It may be better to hand the property back to the lender, and this way the mortgage company take possession and eventually sell the property for the best price possible. Any shortfall from the sale will then be part of your debts in bankruptcy.

Unfortunately we see this situation in many cases-this is not due to the way that people have handled their property but down to the poor housing market in the UK.

I have just moved from England to live in New Zealand. I have four buy to let properties that are causing me issues as the tenants are sometimes not paying and there seems to be continual repair bills. One has equity, two are equal value to the mortgage and the fourth property is worth about £20,000 less than what I owe on the mortgage. What would happen if I use your overseas bankruptcy service and go bankrupt in England whilst residing in New Zealand?

This is a fairly complex question as when a person declares bankruptcy in England and has tenanted property the Official Receiver will step in and take the role of the landlord. Rental payments are then collected by the Official Receiver, but the mortgages are no longer paid. The rental income is taken for the benefit of your creditors and held by the Official Receiver.

The properties will eventually be returned to the lenders although they will have to both evict the tenants and also repossess the properties. Any shortfall in relation to negative equity will become part of the bankruptcy and any surplus from the property with equity will be passed to the Official Receiver. If you are looking for a way to clear yourself of all of the liabilities with regards to the properties then bankruptcy could be your best option.