Effect of bankruptcy on foreign property

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Foreign property and the threat of bankruptcy

If a person is made bankrupt in the UK owns property which is located outside of the UK, that property will still be included in the UK bankruptcy.

• In whichever foreign country, a legal process must be undertaken by a Trustee in Bankruptcy to enable the UK bankruptcy to be recognised in that country before the Trustee is able to realise the value in the property.
• The same principles apply when it comes to finding ways for the bankrupt to keep the property and often a Trustee will be receptive to offers and ideas to enable him to release the value without having to take legal steps which can often be prolonged and sometimes expensive.

Another factor is where the property is an investment property and you are receiving an income from it then that income will be taken into account as part of your overall income and be factored into the Trustee’s decision on whether you can afford to make a contribution to your debts from earnings.

Your options

If you want to keep foreign property you will need to make a reasonable offer to buy it back. A Trustee in Bankruptcy will often consider a sensible offer to avoid the alternative of possibly expensive and time consuming legal steps to realise it. 

You may want to just sell the property and you can do that provided that the value of the property to the Trustee is paid over to the bankruptcy.

At FWJ we are regularly instructed to advise and assist negotiating with Trustees to keep property in bankruptcy all over the world, including the United States, France, and Jamaica.

It’s important to consider…..

You must declare the property to the Official Receiver or Trustee in Bankruptcy.

• Don’t forget that if it is an investment property then it remains with the Trustee in Bankruptcy until such time as it is either bought back or sold. 
• If it is not your main residence then there are no time limit restrictions and the Trustee may realise the property whenever they choose.

Let us help you today

Whatever your bankruptcy issue, our team is here to help. If your enquiry is urgent, contact Stephen Downie who will be more than happy to speak to you as soon as possible.

We needed expert bankruptcy advice and we definitely found it in the bankruptcy team at FWJ. The team provided us with clear and understandable advice in a situation which was really stressful for us. They were able to resolve matters on very favourable terms for us and we can’t thank them enough.

A client for whom we achieved a successful outcome