# Do Irish banks recognise English bankruptcies?



## burnt-toast (5 Aug 2011)

To cut a long story short I have around €12k of debt with Irish banks. I used to earn a good wage and then I was made redundant during the downturn and had to turn to short-term contracts which didn't pay that well so I fell behind on loan and card repayments. I've now been unemployed for 5 months and am completely unable to make repayments on my debts.

I have been living in London for almost 2 years now and have applied for a form of bankruptcy called a 'Debt relief order' (it's aimed at people with <£15 of debt and no assets). I'm at the stage now where all I have to do is pay the insolvency service fee and the insolvency will go through within 24 hours.

However, i'm a bit worried that my creditors in Ireland (AIB, MBNA and Ulster Bank) can just say "We don't recognise English insolvency law". Technically they should, as there's supposed to be a reciprocal agreement throughout EU member states, and i've read newspaper articles about Irish home owners who have moved to England specifically to declare themselves bankrupt here, but i'm still a bit worried.

Can anyone advise? I've been trying to get hold of MABS but they're very busy and I haven't been able to speak to anyone yet.


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## burnt-toast (6 Aug 2011)

Anyone?


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## Time (6 Aug 2011)

They have no choice. They have to recognise it. They won't like it but there is nowt they can do.


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## Jim2007 (6 Aug 2011)

Time said:


> They have no choice. They have to recognise it. They won't like it but there is nowt they can do.



I beg to differ, while it is true in principle that ruling in other EU countries on this topic must be accepted in Ireland, that is not the full story.  If the Irish banks can show that the entire exercise was just shopping exercise to escape Irish law, then they have an excellent chance of having the ruling overturned in the UK.  

You just can't pop over there, do the thing and come back 12 months later.  Here is a very good summary of the situation from [broken link removed].  In particular, note on page 3 where it discusses the investigations carried out by the Official Receiver.

Jim.


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## burnt-toast (6 Aug 2011)

Jim2007 said:


> I beg to differ, while it is true in principle that ruling in other EU countries on this topic must be accepted in Ireland, that is not the full story.  If the Irish banks can show that the entire exercise was just shopping exercise to escape Irish law, then they have an excellent chance of having the ruling overturned in the UK.



As you can see from my initial post, that's certainly not the case for me. I moved to London from Ireland almost 2 years ago because there was, at the time, more work here in my particular line of work. Unfortunately work has been very thin on the ground for much of this year, which is why i'm taking this step.

I've been working here, I have been renting a flat for almost 2 years here, London is my COMI.

I do agree that Irish banks can fight the bankruptcy/DRO ruling if they feel the debtor has not legitimately filed for insolvency, but banks in the UK could do that to me too.


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## frostie (6 Aug 2011)

burnt-toast said:


> As you can see from my initial post, that's certainly not the case for me. I moved to London from Ireland almost 2 years ago because there was, at the time, more work here in my particular line of work. Unfortunately work has been very thin on the ground for much of this year, which is why i'm taking this step.
> 
> I've been working here, I have been renting a flat for almost 2 years here, London is my COMI.
> 
> I do agree that Irish banks can fight the bankruptcy/DRO ruling if they feel the debtor has not legitimately filed for insolvency, but banks in the UK could do that to me too.



It all depends on your actual circumstances. The terms of a DRO are very precise. It depends on you having no assets - you can't hide an asset in Ireland for example, and your disposable income must be less than £50 a week. Evidence is often required, but in general, if you meet the terms, and the Official Receiver approves it, your Irish creditors have no options. I just want to point out though, that all individual circumstances differ, and there is no general comment on this that can be taken as a general answer. If you need any help, get in touch via PM.

w w w . f r o s t . i e


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## burnt-toast (6 Aug 2011)

frostie said:


> It all depends on your actual circumstances. The terms of a DRO are very precise. It depends on you having no assets - you can't hide an asset in Ireland for example, and your disposable income must be less than £50 a week. Evidence is often required, but in general, if you meet the terms, and the Official Receiver approves it, your Irish creditors have no options.




Actually its £50 disposable income a MONTH, not per week.

I've had many discussions with independent advisors at two debt charities and they've told me they see no reason my DRO would be refused by the Insolvency Service. I have no assets in Ireland or the UK (or anywhere else, for that matter).


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## frostie (7 Aug 2011)

burnt-toast said:


> Actually its £50 disposable income a MONTH, not per week.
> 
> I've had many discussions with independent advisors at two debt charities and they've told me they see no reason my DRO would be refused by the Insolvency Service. I have no assets in Ireland or the UK (or anywhere else, for that matter).




Then I think you already know what to do - the fact that you are there  for two years, and have been working there should be more than enough evidence to prove your COMI and that you aren't simply going there to dodge the debt. Go ahead with the DRO, there are far greater amounts of Irish debt than £12k being written off through UK bankruptcies, and in many cases with less time spent in the UK as far as your COMI is concerned.


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## Steve Thatcher (8 Aug 2011)

Jim2007 said:


> I beg to differ, while it is true in principle that ruling in other EU countries on this topic must be accepted in Ireland, that is not the full story. If the Irish banks can show that the entire exercise was just shopping exercise to escape Irish law, then they have an excellent chance of having the ruling overturned in the UK.
> 
> You just can't pop over there, do the thing and come back 12 months later. Here is a very good summary of the situation from [broken link removed]. In particular, note on page 3 where it discusses the investigations carried out by the Official Receiver.
> 
> Jim.


 

Jim is right, there is a crack down on what is termed "forum shopping". Although Stephen Baister the Chief Bankruptcy Judge has also said that it doesn't matter that you come to the UK simply to declare yourself bankrupt or that all your liabilities are in Ireland, it is the fact that at the time that time you present your petition for bankruptcy in England it is your centre of main interest, at that precise time.
It takes a while to establish this as the OR can look back to see if you are truely settled here. So he can look to see if you have somewhere to stay and that you have been staying there, you speak that language, you have a bank account, you have a national insurance number. He also said that it is highly unlikely that the court would raise a question if he saw a petition from a Mr Joyce or Mr O'Sullivan.

My advice is take your time, do it properly and you have nothing then to fear.

Steve


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