Debt Secrets

I call this debt solution the “skip solution” as “skip” is the term used by debt companies to classify people who have literally skipped the country without paying off their debts.

It’s not really a solution because you do not pay off your debt. Please be aware I am telling you about this “solution” so that you are informed. I am not advocating this “solution” and would exhort you at all times to be honest and to pay back your debts. If you take on a debt without intending to pay it back, this is considered fraud. Skipping can have serious consequences if you want to return to the UK and you need to get credit again or a mortgage. If you skip, an attempt will be made by your creditors to trace you. In the modern world this may not prove too difficult and you will be pursued, however, financial institutions have been known to abandon chasing if they haven’t been successful in finding the debtor.

I once met a young lady ex-pat in Thailand. Back in England, she had been in a relationship with a guy who “borrowed” money from her and made extensive use of her credit card. Lots of debt got racked up in her name but the bank insisted that it was her debt problem and that she had to pay for it. She skipped, planning to escape the problem by spending many years abroad. It would be difficult to find her as she was moving all the time. She was young and had intended to go abroad anyway so that there was no loss or inconvenience to her. She was not anticipating getting on the housing ladder for a long time, if ever. For her, this was a way of escaping from a debt that she never considered hers.

I know of another gentleman who wanting to solve his debts applied for an Individual Voluntary Arrangement (IVA). His creditors voted against his proposal, the IVA was never approved. In turn, he just sold his assets (his apartment and car) and moved to a very far off exotic land. His creditors got nothing back from him.

The disadvantages of Skipping:

• In many cases; it is dishonest and fraudulent, if you did it fraudulently you could be convicted.
• If you intended leaving the country anyway there are easy legal alternatives such as making a repayment agreement before you leave or doing a DMP or bankruptcy. Data regarding your UK bankruptcy does not typically follow you to the new country and does not usually affect your credit situation in your new country.
• Your creditors will try to track you down and, if successful, will send you hassling letters and call you.
• If a country has a reciprocal agreement with the country you are moving to, you are more vulnerable. For example, if you already have a CCJ and you move to a European Union country you could be pursued
• The debt can be sold to a debt collection company in the country you are moving to and they will then pursue you for the debt, (they can be very aggressive though their powers depend on local laws and can be very limited)
• As soon as you return to the UK and your credit file is activated again, agencies will attempt to collect the debt again.
• If you leave the debt to live abroad for more than three years you can no longer avail of the bankruptcy solution.

The advantages of Skipping are:

• If debt got racked up in your name and the creditors insist on holding you liable it is a way to escape it
• If you move abroad (to Australia/NZ for example) your UK debt cannot affect your credit rating there.
• Even if the debt is sold to an Australian/NZ debt collection company, by law they are compelled to accept any arrangement offer you make - even as low as $5 a month.In Australia/NZ you cannot be threatened with legal action on the basis of your UK debt.
• After six years your debt is “statute barred” and written off anyway (provided you have not acknowledged it in writing or paid anything towards it for that time period. This does not apply to certain other debts covered by deed such as mortgage arrears for which you can be pursued for up to 12 years afterwards. If a CCJ (court judgement) has been registered against you before the end of the six year period it does not expire. See this link at the insolvency helpline for more information regarding the law on your liability for debts: