Did you know that there are now 27 nations in the European Union (EU) every single one using their particular personal insolvency legislation? The mind boggles at the quantity, assortment and complexities of laws and regulations which this situation must contain. The EU of course wants to harmonise legislation including bankruptcy laws throughout member nations as one of its objectives. Right up until such harmonisation is attained, citizens of member nations of the EU may legally attempt to overcome their own personal personal bankruptcy and attempt to utilise a resolution inside a member nation which is most favourable for their condition.
In the area of personal insolvency, bankruptcy tourism has sprung up as people are becoming conscious that they may seek to tackle their own financial difficulties in a jurisdiction other than that in which their debt was incurred. Bankruptcy tourism could quite possibly be humorously defined as the free movement of financial solutions (or problems), going hand in hand with the free movement of labour.
Britain particularly stands apart as being a jurisdiction where there is what can be referred to as an entrepreneurial approach to those who experience monetary difficulty. Bankruptcy and Individual Voluntary Arrangements (IVAs) in particular offer financially troubled borrowers another possibility and an opportunity to rehabilitate themselves financially, when compared to the culture and laws in most other EU member countries which may look to punish anyone who has transgressed financially. Just about any financially troubled borrower in almost any EU member country may want to consider whether or not they may legally go after a solution for their indebtedness within the laws of a jurisdiction besides their own. And they have the right to do it legally under European legislation, subject to certain provisos. Today, the most obvious forum to select is the UK considering that that’s the jurisdiction regarded as being one of the most enlightened and, as far as the insolvent consumer is concerned, generally provides the least expensive, speediest and most satisfying financial options, chief among them being Bankruptcy and IVAs.
Prior to going forward however, the insolvent consumer must give consideration to whether his or her circumstances satisfy a variety of provisos. The most important qualifying criterion to satisfy is to be able to show that the debtor’s “centre of main interests” or COMI is in the United kingdom, bearing in mind that this could be challenged by among others, lenders. Based on EU Legislation “the centre of main interests should correspond to the place where the debtor conducts the administration of his interests on a regular basis and is therefore ascertainable by third parties”. This is of course open to interpretation or argument although a consensus is starting to emerge as to what this is intended to be. Ultimately, the courts determine whether a debtor’s COMI has been properly proven.
The nation where an EU citizen predominantly carries out their job, trade or self-employment will be regarded as their COMI. In case the citizen has no trade or profession, then their country of residence is usually deemed to be their COMI. If the borrower trades in one member state but dwells in another, the COMI is normally accepted as the member state where they trade. If a citizen lives in one member state (where they pay their bills, hold a bank account, purchase goods and so on) and commutes to a different member state where they work on a non self- employed basis, then their COMI will generally be the country in which they dwell.
The Uk particularly stands apart as a jurisdiction where there is what could be called an entrepreneurial attitude to those people who confront financial problems. Bankruptcy and Individual Voluntary Arrangements (IVAs) essentially offer insolvent borrowers an additional chance and an opportunity to rehabilitate themselves financially, as opposed to culture and laws in most other EU member countries which might look to punish those who have transgressed financially. Any insolvent debtor in every EU member state may want to consider whether they could lawfully pursue a solution for their indebtedness according to the legislation of a legal system besides their own. And they have the right to do it lawfully under European legislation, subject to certain provisos. Today, the most likely forum to choose is the Britain considering that that’s the legal system considered to be the most enlightened and, so far as the insolvent borrower is concerned, typically affords the most affordable, speediest and most satisfying financial options, key among them being Bankruptcy and IVAs.