EU – Baltic States, Financial Services, Latvia, Legislation

According to the program, the bankruptcy process in Latvia takes three years, plus the insolvency administrator takes 30% of the person's salary every month. On the other hand, the insolvency process in England is the fastest in the European Union – a person can get rid of his or her debts in just one year, and the compulsory court procedure costs GBP 700 or LVL 580. Due to not knowing the language and the legal procedures well enough, Latvians in England also pay advisers, which costs slightly over LVL 1000, who then file the appeal for and represent the person in court.

For instance, the Manchester-based Insobaltika mostly specializes in Baltic residents' insolvency cases, it has helped forty Latvians to declare their bankruptcy in England so far. It is impossible to establish how more there are such cases in total, but it is clear that the number thereof continue to rise, says the company.

"I know several cases when banks from Latvia increasingly often hire local debt collectors and lawyers in England to find the debtors, and turn to English courts over the person's unpaid loans in Latvia. These debt collection matters may then be handed over to British plaintiffs who are not very nice people. This is how Latvian banks can legally get the salaries that Latvians earn here in Great Britain. And then there is just one possibility left – bankruptcy," explains Insobaltika insolvency process advisor Andrejs Smolenko.

Andris Bruvelis was the first Latvian to become legally bankrupt using England's bankruptcy laws, and an English court wrote off all of his debts in the total amount of EUR 95,000 in one year.

However, due to differences between Latvian and British laws, a debtor who goes through a bankruptcy case in England may still be considered a debtor in Latvia, explain experts.