I had a voluntary repossession of my car but there is still £5k outstanding. GM Financial have offices in Canada too. Can they pass it to them & affect my credit in Canada? Also have £6k in HSBC credit card. The weak CAD means 1 payment to them both would wipe out 1/2 a month’s salary!
Victor Fong, Licensed Insolvency Trustee in Toronto, Canada replies:
You really have 3 questions, so I’m going to answer this in 3 parts…
Can it affect me over here?
The technical answer is “yes” but the practical answer is “no”. In theory, your UK creditors can pursue you in Canada by getting the cooperation of the Canadian courts to help your UK creditors enforce their debts against you in Canada. However, this would cost your UK creditors legal fees since they would have to hire a Canadian lawyer to make an application to a Canadian court to allow this to happen. The legal fees your UK creditors would have to incur would likely exceed the debts you owe them. Therefore, in their mind, it probably wouldn’t be worth their time pursuing you in Canada.
GM Financial in the UK and GM Financial in Canada are technically different two companies in two different jurisdictions. Therefore, GM Financial in Canada shouldn’t be able to pursue you without attending the the above described steps first. This would apply HSBC UK and HSBC Canada as well.
Should I go bankrupt in the UK?
This will depend on whether you plan to return and work in the UK. If you don’t plan to return to the UK, then there might not be any point in you doing anything at all (for the reasons I explained above). If you do plan to return to the UK and don’t want the burden of your creditors garnishing your wages or seizing your assets upon your return, you should meet with a UK bankruptcy trustee and discuss with him/her a possible bankruptcy filing.
Can a UK bankruptcy affect me in Canada?
This will depend on whether you have assets in Canada and the level of your monthly income in Canada. I’m not familiar with the UK bankruptcy laws, but most bankruptcy laws around the world require you to disclose to your bankruptcy trustee your worldwide assets and income. So any assets you might have in Canada may have to be liquidated by your UK bankruptcy trustee. Likewise, you may have to pay a percentage of your monthly income to your UK bankruptcy trustee if our monthly income is over a certain threshold. In the UK, this is called an Income Payment Agreement.
Also, if you are applying for a job in Canada, prospective employers will generally ask if you have filed bankruptcy within the last 5 years. So this may affect your ability to be hired for any future jobs here. Whether you answer “yes” or “no” will depend on how they ask the question: (1) “have you filed bankruptcy within the last 5 years?”; or “have you filed bankruptcy in Canada within the last 5 years?”. You would answer “yes” to the former and “no” to the latter.