Brexit is arguably one of the most contentious issues of our time. Regardless of how you voted in the referendum, and the reasons for doing so, our decision to leave the European Union has created many questions – mostly relating to the future of our country and economy.
Brexit is arguably one of the most contentious issues of our time. Regardless of how you voted in the referendum, and the reasons for doing so, our decision to leave the European Union has created many questions – mostly relating to the future of our country and economy.
Although we could speculate how Brexit will affect food prices, trade options, or immigration – or even whether we will leave the EU at all – we’re not qualified to discuss those matters. What we are experts on, however, is debt.
In the event of economic uncertainty, it’s not completely unrealistic to imagine a situation where creditors could start calling in debts.
Will Brexit affect debts?
Realistically though, Brexit may not have an immediate impact. Leaving the European Union may or may not have any long-term effects either – although this is uncertain.
Let’s take debt recovery as an example. The laws surrounding this issue aren’t tied into the EU and, generally, the matter is handled by our government.
Considering that most UK debts are held by domestic companies, this could mean there may not be any impact on how companies lend, request, or manage these sums.
Can it affect credit cards?
Many of the consumer rights enjoyed by UK customers are also found in EU law. For example, the protections associated with standard contract terms found in credit card applications and loans.
As these rights are now part of UK law, it seems unlikely these will change. However, if the UK decides to distance itself more from the European Union, we may see adopted EU legislation repealed or amended.
In so doing, this may make our laws feel more ‘British’ but – in reality – it could affect the terms and conditions of multiple financial products.
What if I live in the EU?
In the UK, we have a wide variety of flexible debt solutions and – due to the Insolvency Regulation – these measures are recognised across other EU member states, excluding Denmark.
Assuming Brexit concludes with no deal, there’s a possibility that the Insolvency Regulation will no longer apply. Therefore, if you qualified for an IVA in the UK, but live in Europe, this arrangement might no longer be recognised by default.
This is still an aspect which is unclear but it’s possible that cross-border regulation won’t automatically apply after Brexit. Chances are, both the EU and the UK will come to an agreement on this matter – but probably not immediately. As a result, Britons abroad could be left in the dark surrounding the status of their debt.
