Times: Kent attracts new type of tourist: Europeans seeking easybankruptcy

Discussion in 'Bankruptcy' started by sufaud, Sep 23, 2009.

  1. sufaud

    sufaud Guest

    From The Times
    September 23, 2009

    Kent attracts new type of tourist: Europeans seeking easy bankruptcy
    Helen Nugent

    Tourists have come to Kent for its castles, where widowed queens lived
    out their days and kings organised the defence of the realm of
    England. They have come to see Canterbury Cathedral, founded by St
    Augustine at the end of the 6th century, site of the murder of Thomas
    à Becket.

    Then there is the stately retreat where Winston Churchill brooded, the
    house where Joseph Conrad wrote, the chalky white cliffs. There are
    the oast houses, the ancient pubs, the crumbling Cinque Ports and a
    ragged coastline of beach and marsh and “knolls where Norman churches
    stand”.

    To that formidable list of attractions may now be added another, which
    is pulling in a different type of tourist from countries across
    Europe. Kent is increasingly considered one of the finest places in
    Europe to declare oneself bankrupt.

    PHOTO:
    http://www.timesonline.co.uk/multimedia/archive/00617/Financial-tourist_617679a.jpg
    CAPTION:
    Hans Schmidt moved to Kent from Germany over £150,000 credit card
    debts

    Among the indebted of Germany, Austria, France and Ireland, the
    English insolvency laws look beautifully lenient. Insolvency experts
    say that the number of foreign debtors seeking bankruptcy in Britain
    has risen by 20 per cent, with Kent being a popular destination
    because of its easy access to continental Europe.

    Crippling insolvency laws in Germany mean that it takes between six
    and nine years to escape debts after being made bankrupt. A bankrupt
    in Ireland will normally remain an “undischarged bankrupt” for 12
    years, maybe longer. However, in this country a bankruptcy can end in
    as little as 12 months.

    So to Kent, to pay a restorative visit to an insolvency agency and
    make another trip to a court to file bankruptcy papers.

    Observers are calling the phenomenon “bankruptcy tourism”. The
    Insolvency Service confirmed that it had identified dozens of cases of
    people from Europe filing for bankruptcy after appearing to have been
    resident here for less than 12 months with all or most of the debts
    being owed to creditors outside Britain.

    One German debt expert based in Kent said that he was helping
    management consultants, doctors, accountants, dentists and lawyers to
    discharge their bankruptcy.

    Marcus Kray, a director of the Erith-based Insolvenz Agentur, which
    advises German and Austrians how best to take advantage of British
    bankruptcy laws, said: “They come from all over the European Union.
    They like the tax laws here as they are better than the ones in their
    country.”

    Mike Gerrard, a partner specialising in personal insolvency at Grant
    Thornton, the chartered accountants, 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.”

    In 2002, new European insolvency legislation came into force that made
    cross-border bankruptcies between member states easier to complete.
    The regulation covers personal as well as corporate insolvencies and,
    in theory, allows individuals saddled with debt to “shop around” for
    the most lenient bankruptcy jurisdiction within the Union.

    Many foreign debtors live in Tunbridge Wells, a spa town with its fair
    share of historic castles. Others go to Greenhithe, whose nearby
    attractions include the not particularly historic Bluewater Shopping
    Centre. Some have paid insolvency agencies up to £7,000 for their
    resettlement.

    Mr Kray, whose company promises to “get rid of the rest of your debts
    in England after just 12 months”, said that he had helped a management
    consultant with debts of £16 million to complete the bankruptcy
    process. Many of his clients opted to stay in Britain after their
    names had been cleared, he added.

    “They come to us with problems. They may not have enough money to pay
    their income tax, sometimes they are self-employed and their clients
    haven’t paid their bills. They come from all over the EU. Given the
    economic climate, we have 20 per cent more than normal. We now have
    about 150 clients a year.”

    Under the current system, there is no minimum time limit for a foreign
    national to be resident and “economically active” in England and Wales
    before petitioning for bankruptcy. However, the Government closely
    scrutinises applications from people who have been resident for less
    than 12 months. Being economically active includes being employed or
    having a source of income, owning a bank account, having a national
    insurance number or paying rent.

    More than 60,000 people in England and Wales were made bankrupt in the
    past financial year. The Insolvency Service says that foreign
    nationals account for only a small percentage of this figure.

    A 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.”

    Wish you were here?

    Switzerland: low taxes Almost a third of global wealth kept in
    offshore accounts is thought to be in Swiss banks. Tax regimes can be
    very amenable to rich incomers.

    Liechtenstein: capped fines The British Government and Liechtenstein
    have agreed a ground-breaking deal under which Britons who came clean
    on their previously undeclared accounts would face fines capped at 10
    per cent of the total tax that they had evaded over the past decade.
    Spain: housing hotspot Under Spanish planning law, town halls issue
    building licences, but a clampdown in Andalusia could lead to some
    British expatriates losing their homes, having bought illegally-built
    property in good faith.

    England: libel tourism Powerful litigants from all over the world go
    to London to lodge libel suits, with defendants deemed guilty until
    found innocent.

    Liberia, Panama and the Bahamas: flags of convenience More than half
    the world’s merchant ships are thought to be registered under a flag
    of convenience or open registry, a process under which a vessel is
    registered in a foreign country to reduce operating costs or avoid
    government regulations.


    http://www.timesonline.co.uk/tol/news/uk/article6845136.ece
     
    sufaud, Sep 23, 2009
    #1
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