# Bankruptcy in UK and L1B Visa USA



## Rossman (Jul 30, 2014)

Hi all,

i'm new on the forum so please go easy on me.. 

Due to circumstances in the UK i am planning to declare myself bankrupt in a month or so. I have a house (not much in equity thanks to recent global crash) and a loan with about 10k outstanding. I have been maintaining these payments for a year whilst setting up in the USA.. this has been extremely hard and and now come to a head.

Does anyone know if i go bankrupt in the UK will it affect us here? I have been told no but it seems to depend on circumstances. 

We are on L1B blanket visa for 3yrs initially. 
My company plans to renew this and then switch the H1 visa before applying for Green card further down the line.

is there any better or best way to go about this? I really cant see a way to avoid going bankrupt in the UK now. I just want to be sure that the creditors cannot come after us in the USA or affect our visa renewals at any point or any future green card application. Who could i contact for good advice on the matter? Any help much appreciated. love the forum!


----------



## BBCWatcher (Dec 28, 2012)

Based on a quick read, it appears that you cannot legally shield U.S. (or any other foreign) assets during the course of U.K. personal bankruptcy proceedings. It is a criminal offence, subject to fines and/or imprisonment, to make false statements on financial disclosure affidavits, to conceal property or documentary evidence, or to get rid of property before you go bankrupt. There does not appear to be any protection for non-U.K. assets in those proceedings.

However, the (only?) good news is that a U.K. bankruptcy would not appear to _directly_ affect your U.S. immigration status. It's not a crime of moral turpitude in the U.S. Indeed it's not a crime at all, subject to the above important caveat that it never become a crime. It would obviously impact your financial situation, and that _might_ be a problem if it jeopardizes your ability to keep meeting visa qualification rules. Probably not, but it's possible.

I'm very surprised you'd even consider a bankruptcy filing with less than 10K (pounds) in debt as an L-1B visa holder. That'd be a _very_ unusual combination. Have you looked into the U.K. debt relief option, available with total debt under 15K? It costs at least 700 pounds just to file for bankruptcy, and that seems like a very odd thing to do on less than 10K pounds of debt -- and the filing may not even be accepted.


----------



## twostep (Apr 3, 2008)

Of course your UK creditors can as you say "come after you" in the US. Often debt is being sold from agency to agency which makes it easier to collect internationally.


----------



## Rossman (Jul 30, 2014)

Ok I maybe missed some information on this. I lived in Scotland which I believe may have different laws.

I'm not trying to run away from debt. I have no assets in the USA. I currently rent a house and lease a car. I tried to pay the debt on the unsecured loan for a year in USA and also keep up UK mortgage payments but now i really can't afford to keep up debt payment in UK and cover my new life here. Something really has to give.

Frankly debt collection can come after me all they like but I literally have no assets. Before leaving the uk I paid off 45k of loan debt in 2 months. I just couldn't clear the last bit or sell my house. As far as I'm concerned I plan to tell the mortgage company they can have the house and then default on the 10k personal loan in the UK. 

Has anyone any advice on how best to do this? I've tried as best as I can and there just doesn't seem to be any other way. Unless you guys have some advice? I'm so angry that this tiny bit of debt and my uk mortgage could bring this about considering what I cleared off. I don't want fhis affect my new life here.


----------



## twostep (Apr 3, 2008)

Rossman said:


> Ok I maybe missed some information on this. I lived in Scotland which I believe may have different laws.
> 
> I'm not trying to run away from debt. I have no assets in the USA. I currently rent a house and lease a car. I tried to pay the debt on the unsecured loan for a year in USA and also keep up UK mortgage payments but now i really can't afford to keep up debt payment in UK and cover my new life here. Something really has to give.
> 
> ...


You receive wages, do you?


----------



## Rossman (Jul 30, 2014)

twostep said:


> You receive wages, do you?


Well I'm not paid in buttons or good will. Are you going to offer advice and help or be a sarcastic c|_|nt all your life? I have a young family and for 15 years of my life I've been fighting against the tide. I've very little patience for anyone right now so I apologise if I seem stressed, angry and a little short but so far.. this forums "experts" have offered me very little help. Btw feel free to ban me. I thought I'd give more information and try to fight our way through this.. Instead I get a one liner response. Your lack of any advice is very much not appreciated. This looked like a forum I could genuinely get help from but I guess not. Sorry for wasting my own time. It seems you wasted 10 seconds.


----------



## BBCWatcher (Dec 28, 2012)

Rossman, I'm really confused here. It costs 700 pounds just to _file_ for bankruptcy in the U.K. On a 10,000 pound personal debt? You're on an L-1, and L-1s are ordinarily a group of "respectable" professionals. This is just not adding up for me yet.

Selling the house in the U.K. I totally understand. You're not living there, and it may be quite prudent to sell that home to stop servicing that mortgage, especially if you can fit within the U.S. $250,000 net capital gain tax exemption (assuming you qualify). It wasn't clear if the house is underwater (meaning, the total mortgage is greater than the likely proceeds on the sale of the home) and, if so, by how much.

Or, if you really want to keep the home -- doesn't sound like it -- if you can convert that 10,000 pound personal loan into additional mortgage or refinanced mortgage that _probably_ has U.S. tax advantages. (Mortgage interest is generally tax deductible in the U.S., though read the rules carefully since this is a U.K. property.)

Are you renting the home? Is that income servicing the mortgage, or could it?

....But it's 10,000 pounds. That's such a small amount to service. I won't say it's couple cups of coffee, but personal bankruptcy seems like a radical solution to that comparatively small problem. From your description thus far it seems like using quadruple bypass heart surgery to cure a sore toe -- "one of these things is not like the other." Remember, you're not holding an immigrant visa. You will go back at some point, at present course and speed. Is this modest debt worth the immediate expense of personal bankruptcy -- which might not even be accepted! -- combined with destroying your credit status for many years? (As I understand it, your U.K. bankruptcy burden is that you have to prove it's utterly impossible to sustain your debt load. That doesn't seem like a slam dunk here, and you're out 700 pounds to test that.) Do prospective employers in the U.K. consider personal credit worthiness when making hiring, retention, and promotion decisions? (They do in the U.S.) Most people _from your description_ would be skeptical, but if there are factors not in evidence, let us know.

If you don't mind, what's your gross monthly income in the United States?


----------



## twostep (Apr 3, 2008)

Rossman said:


> Well I'm not paid in buttons or good will. Are you going to offer advice and help or be a sarcastic c|_|nt all your life? I have a young family and for 15 years of my life I've been fighting against the tide. I've very little patience for anyone right now so I apologise if I seem stressed, angry and a little short but so far.. this forums "experts" have offered me very little help. Btw feel free to ban me. I thought I'd give more information and try to fight our way through this.. Instead I get a one liner response. Your lack of any advice is very much not appreciated. This looked like a forum I could genuinely get help from but I guess not. Sorry for wasting my own time. It seems you wasted 10 seconds.


It happens to be a fact. Garnishment does not take much. You will find that a lot of employers consider fiscal responsibility a must.

Personally I do not see the relationship between having a young family and not managing your UK debt and swimming against the tide for 15 years. Arrangements can be made with creditors, real estate can be sold under market, wives can work.


----------

