Debt in Germany now living in Uk

[Gdb]

Hello everyone

My partner is German now living here in Uk with me. He is working full time but has started to struggle with a large debt he had in Germany. i only found out that he was struggling due to the classic unopened letters. I have tried to speak to a few debt agencies who have said 'unfortunately we can only assist with Uk debts'

I dont know who to turn to or what to do... I have made him write to the creditors today to ask for 30 days to seek advice but after this period i am not sure what to do. My questions are .... Can he go bankrupt but still have a full time job or would he have to resign ? Or alternatively if he cannot keep his job can we go for an IVA if his debt is in Germany? He has only lived in Uk since last sept and is not a uk citizen however his life is now here.

[renegadeimp]

Can you give more info on the debts

[Gdb]

The debts are personal loans and credit card debts

[unclebulgaria67]

If these are unsecured (not against property) debts, then I doubt it will go beyond them being chased to the UK. Whilst they could go to court to enforce the debts, this does not often happen when the debtor has moved to a different country. They could go straight to a UK court, but unless they know the debtor can afford to settle the debt, they may be incurring costs they won't get back.

 

Some questions which would need answers for further advice.

 

1) How old are these debts ? When did he last make any payments towards the debts.

 

2) Has there been any court action in Germany or the UK ?

 

3) Does your partner own any assets e.g property in UK or Germany ?

 

Nb. Bankruptcy is a last event option, when there is no choice. It is not something you would do, without thinking of the consequences. If the debt is still enforceable legally and threats are being made to take it to court, it may just be a case of offering affordable payments. Sometimes creditors will accept a small amount per month.

[Gdb]

I think 3 of the 5 debts are with the same bank and 2 debts are with other companies but small amounts like 300

[Gdb]

Ok thank you so much - do you think its wise to negotiate with creditors? The last payment he made was in july so 2 months behind but no realistic chance of catching up if they continue to pile on interest etc . I told him to write and include freezing charges and interest until we sought advice do you think i am doing this correctly? The germans have terminated his loan contract two days ago or are about to, i hope his email will reach them today so he can keep communication open- the debts are approx 4 years old.

[unclebulgaria67]

I think 3 of the 5 debts are with the same bank and 2 debts are with other companies but small amounts like 300

 

I think you may be worrying more than you need to. There are hundreds of thousands of debts across Europe. There will be people with debts of £10,000 + who are not subject to any form of action, apart from being hassled by debt collectors. You have to remember that banks generally write off debts on their accounts against tax liabilities and they then sell these onto debt collection agencies for a fraction of the debt value. The debt is still owed, but sometimes they are never repaid.

[unclebulgaria67]

Ok thank you so much - do you think its wise to negotiate with creditors? The last payment he made was in july so 2 months behind but no realistic chance of catching up if they continue to pile on interest etc . I told him to write and include freezing charges and interest until we sought advice do you think i am doing this correctly? The germans have terminated his loan contract two days ago or are about to, i hope his email will reach them today so he can keep communication open- the debts are approx 4 years old.

 

If your partner was to provide a financial statement of income/expenditure and assets, would this show that he could afford to settle the debts ? What could he realistically afford per month for each debt, whilst paying all necessary living costs in the UK, so there is no hardship ?

 

The normal advice in this situation is to sit down together to work out rough details of income and expenditure. Then to provide these details to creditors and to make an offer of affordable repayments per month. Ask them for their banking details and reference number, so a transfer can be set up.

 

**** important **** In Germany under statute of limitations, if there has been a period of 3 years (end of year in which debt arose) without repayment or written admission of owing a debt and no court judgement, then the debt will NOT be enforceable in any court. If this could be the case, find out the last date of payment and look into this further.

[Gdb]

Ok thank you just to give u an idea of the debt it is 30 k i dont know if this will make a difference to the fantastic advice u have given me so far but it is a large amount as u can see?

[unclebulgaria67]

Ok thank you just to give u an idea of the debt it is 30 k i dont know if this will make a difference to the fantastic advice u have given me so far but it is a large amount as u can see?

 

Without answers to some of the questions raised, difficult to comment further ?

 

E.g does he own assets, can he afford to make repayments, any court actions so far, history of paying the debts, any period of 3 years when no payments made.

 

Think you need to start getting more information, as I don't think you have this.

 

If he owns assets and they can enforce the debt, they will try to do so. The next step could be letters from UK Solicitors warning of court actions.

[Gdb]

My partner told me yesterday that he cannot set up a direct debit from uk to Germany is this correct because it doesnt sound right, i think he may have been told this by someone but if you know id like to have the correct info

[Gdb]

He has no assets no property in Germany or uk just living in my rented accom with me in uk

[Gdb]

I will find out the history tonight and write again tomorrow with answers hopefully you will be around. Thankyou so very much for all your advice you have no idea how much i appreciate it

[unclebulgaria67]

My partner told me yesterday that he cannot set up a direct debit from uk to Germany is this correct because it doesnt sound right, i think he may have been told this by someone but if you know id like to have the correct info

 

Think that is correct. A bank would want to set up a form of transfer similar to a standing order. But I think they charges for this, as it would require a currency change from pounds to euros.

 

I believe that people who do this, use some form of transfer company, who can transfer funds from one country to another. They can do it cheaper than a bank. But you would need to find out about this, as I have no personal experience of this.

[unclebulgaria67]

Ok thank you just to give u an idea of the debt it is 30 k i dont know if this will make a difference to the fantastic advice u have given me so far but it is a large amount as u can see?

 

Having had a sudden thought about this, if your partner has a lot of debt and no assets, he should speak to someone who deals with bankruptcy. I don't know all of the rules. I suspect he would have to go through some form of questionnaire to see if he was eligble to declare bankruptcy in the UK which could include German debts. But he would need to understand the cost of doing this and how it would affect him.

 

He could contact the debt charirty Stepchange to make enquiries.

 

http://www.stepchange.org/

 

If he can go through bankruptcy, atleast it would mean dealing with the debt over a few years and not having to make repayments for a very long time to come, plus all the hassle that came with it.

[Gdb]

Morning thank you for all your comments - i had a discussion last night - the more i dig the more it seems the German bank who gave him 3 loans (in the space of 6 months) have clearly broken some kind of "irresponsible lending" policy - my partner was bringing home 1600 euros a month at the time and they gave him 3 x loans within 6 months ( one loan 13k) surely this has to be investigated?

I have done some research, he has only defaulted on 4 payements since taking out the loans but as a result has suffered from acute mental health issues due to the stress. I think i am going to ask the German banking ombudsman to investigate this case. The lender knew he was in financial difficulty at the time, and knew he was vulnerable, they did not check his affordability of the lending at any point and even cold called him on many occasions to offer more loans... Surely we have a case here to at least be investigated? What are your thoughts?

[unclebulgaria67]

Morning thank you for all your comments - i had a discussion last night - the more i dig the more it seems the German bank who gave him 3 loans (in the space of 6 months) have clearly broken some kind of "irresponsible lending" policy - my partner was bringing home 1600 euros a month at the time and they gave him 3 x loans within 6 months ( one loan 13k) surely this has to be investigated?

I have done some research, he has only defaulted on 4 payements since taking out the loans but as a result has suffered from acute mental health issues due to the stress. I think i am going to ask the German banking ombudsman to investigate this case. The lender knew he was in financial difficulty at the time, and knew he was vulnerable, they did not check his affordability of the lending at any point and even cold called him on many occasions to offer more loans... Surely we have a case here to at least be investigated? What are your thoughts?

 

Yes it would be worth making complaints in Germany. Don't presume that they have the same rules as the UK. They may be allowed to loan money in the circumstances you describe.

 

The question will be asked as to what he did with the money. He would have completed forms for the German bank stating what the purpose of the loan was.

[Gdb]

I just asked him - he said the bank filled out the forms and he just signed it then the contract was sent to him via head office ! This sounds more and more like grooming a vulnerable person to me added to this he said they called him numerous times asking him if he wanted more loans when he already had loans with them worth 31k this is outrageous behaviour !

[Gdb]

Oops sorry realised i just repeated myself with the phone call thing

[unclebulgaria67]

Oops sorry realised i just repeated myself with the phone call thing

 

Sound all abit iffy to me. But I don't know how German banks operate.

 

Perhaps they thought he had assets in Germany, which they could go after, if he did not repay the debt. Otherwise it does not make any sense to me that a bank would lend so much, when the level of income was not that high.

 

My guess would be either a massive mistake or there is more to this story which you have yet to learn about. To get to the bottom of it, perhaps start making complaints to the banks head office, with a view to going to the German banking ombudsman.

[Gdb]

Hi again just to update you - i have gone thru everything with him - there does not seem to be any hidden info from him - I'm guessing at this point i will go ahead with making a formal complaint to the German ombudsman, i don't think at this point we have anything to lose since he is in such a crisis regarding the re payments - i do have a question, tried to look everywhere for the answer but not satisfied- can you help? My partner is working as mentioned previously, if he declares bankruptcy eventually will he have to give up his job ? Ive looked through his employment contract and it doesn't state anywhere that should ur financial situation change etc you have to inform them however would they find out if he eventually decided to opt for bankruptcy?

[unclebulgaria67]

Depends on the type of job. If he worked in financial services, accountant, legal profession or as a Police Officer, I think it would be very difficult to continue. If he was the director of a company with any financial responsibilities it might also be a problem. It may not be a condition written in his employment contract, but there may be reference to employee responsibilities set out in other documents.

 

When someone goes bankrupt there is a public notice placed, so any potential creditors can come forward. This would appear in the London Gazette, relevant German publication and possibly in a newspaper local to you. You may have seen the local newspaper where there is a small column for people made bankrupt. It is only about 2cm long and gives brief information.

[Gdb]

Ok he doesn't work in any of the industries you mention - do u have to declare bankruptcy to an employer if its not written in any of the employment contracts ?

[unclebulgaria67]

Ok he doesn't work in any of the industries you mention - do u have to declare bankruptcy to an employer if its not written in any of the employment contracts ?

 

No he would not have to mention it, if there is no contractural or professional obligation to do so.

[Gdb]

Ok - can you only earn a certain amount after bankrupcy or can u continue earning the same amount regardless of bankrupcy ?

This is a complete mindfield sorry for all the questions