Kent Becoming A Debt Haven For Insolvency Tourists

Fri, 02 Oct 2009

Hundreds of Germans and Austrians are coming to Britain each year to take advantage of the nation’s lenient bankruptcy legislation which clears their debts in just twelve months.

Under UK laws, a person can be declared bankrupt after they have lived in Britain for six months and their debts can be written off just one year later, compared to a seven or nine year wait in Germany and Austria .

Many debt-hit Europeans have settled in upmarket Royal Tunbridge Wells in Kent after paying up to £7,000 to a Kent-based insolvency agency for help with relocating and finding a job .

German financial expert Marcus Kray set up Insolventz Agentur in nearby Erith after 'spotting a gap in the market'.

He said his company’s website, which offers advice on how best to take advantage of British bankruptcy laws, receives thousands of hits a month and revealed that the number of foreign debtors seeking bankruptcy in the UK has risen by 20 per cent since the start of the recession.

Mr Kray explained that most of his 150 annual clients, who he claims are successful German or Austrian professionals, choose to reside in Tunbridge Wells because of its links to Continental Europe and also because "the rents are cheaper than in London".

One of his clients, an Austrian management consultant, managed to have debts of £16 million completely cleared by a British court.

He added that the majority of them opt against retuning to their home countries after their names had been cleared, with 85 per cent relocating to the UK for good.

Mike Gerrard, a partner specialising in personal insolvency at chartered accountants Grant Thornton, said: "As far as the law is concerned, this (debt tourism) is a legitimate thing to do. However, you could have a long and difficult argument about the ethics of it."
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