Irish Bankruptcy in the UK

It is possible to go bankrupt in NI, and the general UK bankruptcy rules apply.

However, the process of going bankrupt is much more rigorous than the mainland UK. All NI bankruptcy applications are heard by one judge, Master Fiona Kelly, and she is very sceptical of anyone with a former ROI address attempting to apply for a "quick" bankruptcy.

In order to go bankrupt in NI you need to convince the court that you have made a "genuine" move to NI i.e. that your change of Centre of Main Interests ("COMI") is genuine.

I heard the story of one couple who attempted to go bankrupt, and she asked the husband to leave the court and asked the wife what restaurants they went to in NI, and then asked the husband back and asked him what restaurants they went to and apparently they gave different answers and she refused their application.

Applications on the mainland UK are not subject to the same level of scrutiny.

Whilst bankruptcy is still a valid option for some people, you should really consider a PIA/DSA or informal scheme of arrangement with your creditors. Some of the banks are now doing realistic debt forgiveness deals.

Jim Stafford
 
Jim Stafford said:
I heard the story of one couple who attempted to go bankrupt, and she asked the husband to leave the court and asked the wife what restaurants they went to in NI, and then asked the husband back and asked him what restaurants they went to and apparently they gave different answers and she refused their application.
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Wow that's shocking ! Someone posted on here before to say that she wouldn't let them leave during the bankruptcy to move back to ROI.
 
I read in another post that Steve T was advising people against declaring bankruptcy in NI - due to Master Kelly's unique interpretation of the bankruptcy legislation.
 
Advice from Steve Thatcher & others needed please..

Hi Steve, firstly fair play for all the advice you give on this forum. I'm sure its much appreciated by all. I still have a draft of an email I almost sent you 3yrs ago when I thought I'd have to go the UK route, but I didn't send it and battled through with the bank, but it looks like I'm running out of road now!

I've just sent an Standard Financial Statement to my bank plus other related documents, but I'm concerned when they look at my whole situation they may appoint a rent receiver to take over my buy to let properties as I'm paying them as much as I can, but I know they will want more. Or they may force me to sell everything off, but of course then I'll have a massive negative equity debt which I wont be able to pay off. So I'll have to look at the bankruptcy option.

My question is, once they appoint a rent receiver to me, is this a legal process, and if it is, does that mean that it is too late to set wheels in motion for bankruptcy in the UK?

If they decide that the properties are to be sold, in which case they would have to apply through the courts, again would this mean that as I have been entered into the Irish legal process, it is too late to avail of the UK option?

I'm waiting to hear back from them, and in the meantime I've a few scenarios running through my mind causing me some sleepless nights. Professional advice given to me so far has been to declare myself as being insolvent and apply for bankruptcy in Ireland, but I think the UK would be a better fit for me.

Advice would be appreciated! Thanks.
 
Hi Madeabadcall

The answer to both questions is 'no' - it wouldn't affect you declaring bankruptcy in the UK.
If they want to have the properties sold - the bank does not have to apply through the courts - you can simply 'voluntarily surrender the properties' or you could use an Irish solicitor / insolvency specialist to sell them on the your / bank's behalf, while you go about organising your Centre of Main Interest in the UK. The solicitor / auctioneer fees for selling the properties would be deducted from the selling price and added to the shortfall - which is then written off in UK bankruptcy.
The advantages of the UK system over the Irish system are obvious. The UK system also offers an IVA system whereby - if someone was prepared to offer a lump sum to you - you could offer it to the banks and have everything written off without any discharge period.
 
Advice from Steve Thatcher & others needed please..

Appreciate the advice Suarez. If the bank forces me to sell everything I think I should have time to go the UK route before it gets to the stage of having to make an agreement with them about what to do about the negative equity debt after all the fees are paid off. I just don't want them hitting the Irish Bankruptcy button before I hit the UK Bankruptcy one.

Although I think I have to tell them when I have moved to the UK, so I suppose there is the possibility that they could try to rush things to get me bankrupted in Ireland while I am establishing my COMI in the UK??
 
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Nope. No bank will bother bankrupting a debtor in Ireland unless they are 100% there are assets that can be realised to cover all the debts.
 
time said:
nope. No bank will bother bankrupting a debtor in ireland unless they are 100% there are assets that can be realised to cover all the debts.
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+1

As Time has written - the bank will not bother bankrupting you in Ireland. Why would they bother going to the expense? I remember having the same unfounded fears as you. Overthinking everything is par for the course. If the bank forces you to sell everything or if an Irish solicitor / Insolvency company can convince the banks that they will organise the sale of your properties -it will take at least the time you need to spend in the UK to have them sold. Another option is to voluntarily surrender the properties and move to the UK. We found the optimum approach for us was to have a solicitor / insolvency arrange everything while we moved to the UK.
 
Excellent, thanks to you both for the replies. I can relax a little so while I'm waiting to hear what the bank want to do with me.
 
madeabadcall said:
Excellent, thanks to you both for the replies. I can relax a little so while I'm waiting to hear what the bank want to do with me.
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Sorry for the delay, I have been pottering about on a canal boat.

the way i usually tackle this is for you to start taking the rents for as long as you can get away with to help fund the UK move. Ok after about three months they appoint a rent receiver. So what. It doesn't alter your plans in any way. In the UK you simply ask to voluntarily surrender the properties. It's good evidence of UK comi.

No Irish bank will spend the time or money bankrupting you.

What ever you do with the property don't feel pressurised into selling it before you come over. Many operators are saying it needs to be done. It does not, it is a way for some law firms to feed at the fees trough one last time!

Steve Thatcher
 
Thanks for the info Steve. I'm waiting to see what the bank come with, and then I'll make the decision on what I'm going to do next.

I can transfer to our London office and I have friends in London who will sort me out for a bed while I'm looking for permanent accommodation, it's just leaving my wife and what will be our newborn baby behind is the killer. They won't be coming with me unfortunately.

We also have a family home which is also in negative equity and also in my name only, the same as the Buy to Lets. I'd like to think we could keep it if I go the UK route, but I know this is unlikely. My wife made the good point of how could you stand in front of a judge in a London court and say your COMI is London and you will be there for the foreseeable, and still be trying to keep a family home in another country.

On another note, I know I sound paranoid, but could the OR somehow check to see if I'm flying home each weekend or fortnight, and use it against me to say I'm not really committed to being in the UK?
 
Re. transfer to London office - be mindful of the dangers of incurring an Income Protection Order that can last 3 years if your net income exceeds costs by as little as £20. An IPO effectively extends your discharge period by 2 years.
The OR could see your flights home if you book them using your bank accounts. Better to get your wife to book your flights home as the OR has no right to check your wife's account.
I'd talk to an Irish solicitor / insolvency company re. your home and in particular which jurisdiction is more likely to leave you remain in your home (especially if it's likely that an IPO will be granted against you in both jurisdictions - 3 years in the UK (plus 6 month COMI) versus 5 years in ireland.
 
Given that you want to keep your family home and that being separated from your family will clearly be difficult, you should be considering a Personal Insolvency Arrangement or PIA. You get to keep the house and stay home with your family.
 
I think if I transfer to the London office, I'll just take whatever pay cut necessary to ensure I don't get IPO'd. I think I read Suarez where you were slightly over the threshold and it looked like they were going down this route with you, but you managed to convince them otherwise. It'd be a bit of a nightmare scenario if the UK option was an extra 2yrs.

Flights booked by my wife makes sense. I'd have to come home regularly with a new baby at home.

Re family home, I think we'd be prepared to walk away from it if it meant prolonging the pain in a major way. The thing about going bankrupt in Ireland vs UK is that I would be on a much reduced salary in the UK for 1.5yrs or so, but in Ireland it'd be 3yrs. However in Ireland if I get hit with an IPO we'd be living on not much more than the dole for 5yrs minimum as the allowable expenses are low enough, and a large chunk of my salary would be taken away each year leaving us on very little to live on.

Better to take the quicker (albeit more painful) hit and try and start over again we think.

But the other reason I don't think I would want to go down a 5 year option in Ireland is that it'd kill me if everything was taken off me, we're scraping by with almost no extra income each month as we're still paying back the bank through an IPO, and meanwhile property prices are continuing to rise and I know that if given some space by the bank, I'd have already exited negative equity and could have sold everything off and got out unscathed.

That would be tough to deal with.
 
We weren't over the threshold - so managed to avoid the IPO.
My primary reasons for choosing the UK option is the same as yours - i.e. get it over with as soon as possible.
I would seriously advise you to contact a Dublin based solicitor / insolvency expert re. selling your properties on behalf of the bank - as the advantages are surprising.
We returned to Ireland 3 weeks after being declared bankrupt as we were legally entitled to it - so we were there just over for 6 months in total - i.e. you don't have to spend 18 months over there away from your wife and child.
I would seriously consider the full and final lump sum IVA settlement - especially if you decide to sell all of your properties. I've met people recently who will only pay a fraction of what they owe (i.e. 10,000 on half a million debt). Another poster on AAM paid 40000 in full and final settlement on 4 million i.e. 1 percent IVA. The advantages of the IVA are that there is no discharge period, no chance of an IPO and no limit on the money you can earn in London. The money needs to come from a 'family member' or friend who makes it a pre-condition of the lump sum that the residual is written off and it's legally water tight in the UK. (One can always pay it back in time)
 
suarez said:
We weren't over the threshold - so managed to avoid the IPO.
My primary reasons for choosing the UK option is the same as yours - i.e. get it over with as soon as possible.
I would seriously advise you to contact a Dublin based solicitor / insolvency expert re. selling your properties on behalf of the bank - as the advantages are surprising.
We returned to Ireland 3 weeks after being declared bankrupt as we were legally entitled to it - so we were there just over for 6 months in total - i.e. you don't have to spend 18 months over there away from your wife and child.
I would seriously consider the full and final lump sum IVA settlement - especially if you decide to sell all of your properties. I've met people recently who will only pay a fraction of what they owe (i.e. 10,000 on half a million debt). Another poster on AAM paid 40000 in full and final settlement on 4 million i.e. 1 percent IVA. The advantages of the IVA are that there is no discharge period, no chance of an IPO and no limit on the money you can earn in London. The money needs to come from a 'family member' or friend who makes it a pre-condition of the lump sum that the residual is written off and it's legally water tight in the UK. (One can always pay it back in time)
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Great advice from Saurez as usual.
UK sound s best
Don't worry about being away from family and the court's interpretation of that. Has never been a problem for me.
Do your comi time, let the OR deal with you then pop home.
Having a business transfer is great for comi purposes.

Steve Thatcher
 
Thanks Suarez and Steve. I thought I had to do 6 months in UK to establish COMI, then another 12 months over there during bankruptcy, and only after I was discharged could I return home. So I was looking at 18 months in total. What you both have said puts a completely different spin on things from my point of view if it could be just 6 or 7 months in total. I cant wait to tell my wife...this really is a major thing for us.

Suarez, I will seriously consider the IVA route. My folks or brother would help me out I'm sure, depending on the size of the amount needed.

The stress is literally lifting a little as I type this. I'm away to give my heavily pregnant and patient wife some good news!

Thanks again to you both.
 
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suarez said:
I would seriously consider the full and final lump sum IVA settlement - especially if you decide to sell all of your properties. I've met people recently who will only pay a fraction of what they owe (i.e. 10,000 on half a million debt). Another poster on AAM paid 40000 in full and final settlement on 4 million i.e. 1 percent IVA. The advantages of the IVA are that there is no discharge period, no chance of an IPO and no limit on the money you can earn in London.
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You can have all of these benefits under a PIA without having to set foot outside the country. It doesn't have to last 6 years. That is the maximum term. It can be as short as a few months if you are offering a lump sum via the sale of the BTLs.
 
And the banks have a veto on that. I wouldn't waste my time having to go begging the banks.
 
DebtCert said:
You can have all of these benefits under a PIA without having to set foot outside the country. It doesn't have to last 6 years. That is the maximum term. It can be as short as a few months if you are offering a lump sum via the sale of the BTLs.
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The advantage of being in the UK when applying for the IVA is that if the banks refuse the IVA after the properties have been sold - one can immediately petition for bankruptcy. Whereas, if the bank refuse the lump sum PIA after the properties have been sold - one has to start building up the 6 month UK COMI from scratch.
 
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