Under EU regulations, all the member states (but not Denmark) allow you to enter into bankruptcy where you are normally domiciled and this is known as the ‘Centre of Main Interests’. This is of particular interest when it comes to the UK’s lenient insolvency laws, as those people who might have been subject to harsher regimes in countries like Germany or Lithuania, find themselves emigrating to the UK to go bankrupt here.
This has lead to a phenomenon known as ‘Bankruptcy Tourism’, something which the UK’s Insolvency Service is acutely aware of. The Insolvency Service now conducts stringent tests to establish exactly where the ‘Centre of Main Interests’ lies – is the person here to stay or are they just passing through?
Among other things, they will see whether the person has a National Insurance Number, is registered for tax, has a local bank account, has enrolled their children in local schools and is on the electoral roll. Nowadays, when somebody with predominantly foreign debt petitions for bankruptcy, it is not granted on the day, but is deferred for a week or two until the checks have been done.
People should note that those persons declaring bankruptcy with non-EU debt e.g. the United States will not receive the same protection i.e. the creditors are not obliged to act on the letter received from the Insolvency Service. Although the debt is not automatically written off, the foreign creditors no longer have the right to pursue the debtor while he / she is still living in the UK and that makes a big difference.
‘What does ‘Centre of Main Interests’ or COMI mean’ is just one of hundreds of questions we’ve answered over the years, but feel free to call us on 01425 600129 if you need to know more or specifically need bankruptcy help. We are here to help.