Foreigners moving to Britain to go bankrupt

Hundreds of people are coming to the UK from abroad every year to take advantage of lenient insolvency laws and declare themselves bankrupt.

German nationals in particular are flocking to Kent, where they can clear their debts in just 12 months, compared to their home country where it can take up to nine years.

Marcus Kray, of Erith-based Insolventz Agentur, which employs German-speaking lawyers, translators and tax advisers specialising in insolvency, said the number of foreign debtors seeking bankruptcy in the UK has risen by 20% since the start of the recession.

He said: "The situation in Germany is very difficult. Say you are 60 and you want to be debt-free by the time you are retired when you are 65, you just can't do it. It's impossible.

"It's not just Germany - in Ireland it takes 12 years. But in the UK it takes 12 months, although it is still not easy here."

He said Kent was a popular place for people to come to from Germany due to its closeness to the continent, with many choosing to live in Tunbridge Wells because of the relatively large population of Germans already living there.

He added that the majority of his clients opted not to return to their home countries, with 85% relocating to the UK for good.

"We don't take on clients who are going to claim benefits in the UK, we only like ones who work or who are retired so receive a German pension.

"They need to contribute to the English system and not be a burden," he said.

Mr Kray said most of his 150 clients every year are professionals, including doctors, pharmacists and lawyers.

A spokeswoman for the Insolvency Service said that compared to overall bankruptcy figures of 60,000 a year, the number of those coming to the UK from abroad to clear their debts "represents just a small drop in the ocean".

Although there is no minimum time a foreign national must be resident and economically active in the UK, cases where the person has been resident in the country for less than 12 months are scrutinised.

The spokeswoman said: "The service examines the affairs of recently relocated foreign nationals very closely, and, if there is evidence that the order ought not to have been made in the courts of England and Wales, will report the matter back to the court with a view to having the bankruptcy order cancelled."

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