Doing an IVA from abroad

A question that we are asked regularly is if someone who has debts in the UK and lives outside of the UK, can they do an IVA in the legal jurisdiction of the UK while still continuing to live abroad. The short answer to this question is ‘YES, but…!

There are really too many variables to give a definitive answer to the question and if you find yourself in these circumstances you should consult with a debt advice or Insolvency company in the UK. You could also seek some legal advice on the matter. The Insolvency Company or an Insolvency Practitioner can consider all of the particular circumstances of your situation. However, we can clarify some aspects of the question in this article.

European Union regulations permit the insolvency legislation of one member state to apply in another subject to certain provisos. The result is that a debtor who now lives in another member state may be able to put forward an IVA if the UK is considered their “centre of main interests”.

The definition of the concept of “centre of main interest”, as contained in these regulations and as understood and interpreted by the courts, is a crucial consideration.

Do an IVA abroadWhen consulting with any Insolvency Practitioners it is important to establish whether all of your debts are to creditors in the UK or whether there are debts to creditors outside the UK and/or to creditors outside of the European Union and the amount in value of all such debts. They will ask vasrious questions such as

  • Do you work or obtain your income in one or more states of the European Union?
  • Do you reside in a state of the European Union?
  • For tax purposes what is your ‘residency’ state?
  • Do you own assets in the UK or in any other state of the European Union or in any location outside of the European Union?
  • What is your occupation and does the occupation impose temporary or permanent residency conditions on you?

For example, a serving member of the Armed Forces (of the UK) who is serving abroad and who may be stationed abroad for long periods may enter into an IVA in the UK. The same may apply to anybody who is for example working in a member state of the European Union but whose assets are located in the UK. Similarly, any person who works in the merchant navy may enter into an IVA, even though they may be abroad for much of their working lives, provided their “centre of main interests” is in the UK.

Obviously there are many different scenarios which may impact on your capacity to comply with the terms of an IVA. These could include assets held or acquired abroad or debts incurred abroad prior to the term of the proposed IVA and debts likely to be incurred during the proposed term of the IVA. Nevertheless, creditors may accept such an IVA provided they are satisfied with your capacity to comply with the terms of the IVA and with any modifications they may propose at the meeting of creditors.

If you live abroad and have debts in the UK that you are worried about or cannot afford to repay, then get in touch with us at McCambridge Duffy. We will be able to advise you on your options to dealing with the debts.