As I write this the Prime Minister and Parliament are feverishly trying to hash out a deal for us to leave the EU, which happens on the night of March 29th.
Without a deal to leave the EU, there is fear of chaos, confusion, cats and dogs living together, gravity ending and the UK goes spinning off into the cosmos.
But seriously, having a deal is better than not having a deal.
There are concerns over food prices going up, holidays requiring a Visa to enter the EU, and just about every other aspect of life that we were sharing with the EU.
Companies are and have already moved billions of Pounds outside of the UK in preparation for the leave.
Many are concerned if the UK can go it on its own without the EU.
Somehow, we will be fine.
It is the fear of the unknown, we really do not know what is being “dealt” with in this “deal”. There are the obvious headlines, immigration, trade rights, transportation, etc.
What about banking, and also what about insolvency laws?
The regulatory body that overseas all things credit, banking and financial, the FCA/Financial Conduct Authority have concerns; concerns enough to have a “no-deal Brexit financial war room”.
A spokesman for the FCA stated, “As part of our planning for all scenarios we have put in place contingency measures in the event of a hard Brexit.”
“We will have teams in place throughout the weekend of exit to monitor the situation and respond as needed, working closely with the Treasury and the Bank of England.”
The FCA will monitor IT changes during the leave period on the 29th, and also deal with “passporting rights”. This is where EU members have a right to do business here and deal with UK clients, these all need to be updated.
Brexit and UK Insolvency Laws
One area of the Brexit I have not seen or heard any discussion about is our current insolvency laws, and if the Brexit will affect them.
Currently if you reside in the UK and have EU debts, you can include these accounts in an IVA or Bankruptcy or a DRO/Debt Relief Order. The accounts can be discharged after 12 months in a Bankruptcy or DRO, and you no longer owe them.
You can include debts from anywhere in the world in a UK bankruptcy, but the protection afforded you with the bankruptcy is only in the UK, not the country where the debt originated. So if you were to return to that country, the creditor could attempt to collect the account.
There are also collection laws and practices in place with some EU countries, so if someone leaves the UK with debt, and moves to the EU, the creditor can still collect the debt in the EU.
So is all this going to change???
Speculation: It may be that once we leave the EU, and debts one has in the EU would fall into the same category as how a debt from outside the UK and EU had been treated in the past.
You can include an EU debt, or debt in any country, however the protection the courts provide in the UK will be for only in the UK; no longer also in the EU.
To speculate further, this could impact business and banking relationships. Companies based in the EU if they owe money to a UK bank would have to be chased for payment if they default in a different manner. The creditor may need to seek authorisation to collect the debt in that country.
It can get complicated.
There are some that feel there will be no immediate change, the provisions in place to collect debts across borders will remain. However, they will need to be addressed at some point.