September 26, 2009

Britain attracting ‘bankruptcy tourists’

Britain is attracting Europeans with financial problems because of its lenient bankruptcy laws, observers say.

Financially struggling foreigners hoping to erase their debts are moving temporarily to Britain to file for bankruptcy under laws that allow them to wipe their slates clean after only 18 months, Sky News reported Saturday.

The British broadcaster noted that in Germany, it can take between 7 and 9 years to emerge from bankruptcy, while in Ireland debtors can remain undischarged for at least 12 years.

The German company Insolvenz Agentur, which is based in Kent, England, is facilitating such bankruptcy tourism, reportedly making arrangements for debtors' medical needs, their housing and even helping them obtain British driving licenses.

I came to England because I have debts, credit cards debts, Klaus Schmidt, a divorced man who owes more than $240,000, told Sky News. It's not my fault I have these problems, it's not my fault I'm in this situation.

Most people coming to do this seek to work whilst they're here, added Mark Sands, chief of bankruptcy services at the accounting firm Tenon. They come here looking for work, so they contribute to the economy in some respect.