Can I Be Made Bankrupt If I'm Living Abroad?

By Heather Frances J.D.

Though it’s possible to be forced into bankruptcy by your creditors, such instances are rare whether you live abroad or not. Instead, most individuals file for bankruptcy voluntarily because bankruptcy gives them an opportunity to eliminate certain debts and get back on their feet financially. If you choose to file for bankruptcy protection, federal laws allow you to file even while you live outside the U.S.

Involuntary Bankruptcy

Moving abroad does not alter your responsibilities to pay your debts, and your creditors can force you into bankruptcy even if you live overseas. If you have fewer than 12 creditors, it only takes one to force you into bankruptcy; if you have more than 12, three must agree before you can be forced into bankruptcy. Involuntary bankruptcy can be initiated only by a creditor to whom you owe an undisputed, fixed amount of money. In addition, you must owe at least $10,000 to your creditor, your debt cannot be secured by collateral, your creditor must make the involuntary bankruptcy petition in good faith, and your creditor must prove you made no attempts to bring your account up to date. While you can object to involuntary bankruptcy, your objection likely will not stop the bankruptcy unless you can show that your creditor does not qualify to file the bankruptcy case against you. Since individual involuntary bankruptcy is typically a Chapter 7 case, a court-appointed trustee controls the sale of your eligible property during involuntary bankruptcy. Property you own in the United States could be sold to pay your creditors, but debts not fully paid by your bankruptcy case could be discharged, or erased, as long as you otherwise qualify for discharge.

Filing While Abroad

Neither Chapter 7 nor Chapter 13 bankruptcy requires you to live in the United States full-time to file. Bankruptcy laws allow nearly anyone to file for bankruptcy as long as they live in or own property in the states. If you live abroad, you generally must own property located in the U.S. in order to file, such as land, a bank account or a vehicle. If you do not own any property in the U.S., filing for bankruptcy may prove unnecessary since it would likely be difficult for creditors to come after your foreign assets to pay U.S. debts.

File a DBA for your business online. Get Started Now

Where to File

Bankruptcy must be filed in a U.S. Bankruptcy Court regardless of where you live, but not every bankruptcy court is the appropriate venue, or location, for your case. If you live in the U.S. or have recently moved away, you generally must file your bankruptcy case in the court that covers the area where you lived for the majority of the previous 180 days. For example, if you lived abroad for 100 of the last 180 days and lived in the U.S. for the other 80 days, you would typically file in the state where you lived while you were in the U.S. However, if you have lived abroad for more than 180 days, you must generally file in the court that covers the area where your assets are located.

Appearing in Court

A lawyer can handle many aspects of your bankruptcy case without the need for you to travel back to the U.S. However, you will have to attend a 341 meeting in person, also known as the Meeting of Creditors. The court can excuse you from appearing if you have a medical problem or military obligation, but the cost and inconvenience of travel is typically not considered a legitimate excuse for failing to appear at the 341 meeting. If you don’t want to take on the expense or trouble of traveling back to the U.S., you may want to weigh those considerations against the benefits of discharging your debts in bankruptcy before you decide to file.

File a DBA for your business online. Get Started Now
Can a Creditor Put a Lien on Property If Chapter 13 is Dismissed?
 

References

Related articles

What Happens in Bankruptcy If I Own My Home Outright?

If you're considering bankruptcy, you're naturally concerned about what you can keep and what may have to surrender. If you own your home outright, you may or may not lose it if you file bankruptcy. Several factors, including the laws of your state, determine the final outcome of your bankruptcy petition.

Do I Have to Give Up Things That I Own Outright When I File Bankruptcy?

Bankruptcy can be an intimidating process because of the uncertainty and complexity involved in turning over your debts to a bankruptcy court to help you get a fresh start. Depending on the type of bankruptcy you file, your assets may be sold – or liquidated – to pay your creditors, or your assets may be safe because you are paying on your debts. Even when your assets are subject to liquidation, some of your things may be exempt from sale based on state or federal law.

Things to Know Before Filing for Bankruptcy in Hawaii

Bankruptcy can be a good option for those who feel overwhelmed by debt, though bankruptcy isn’t for every situation. For example, you must be a resident of Hawaii for 90 days before filing. In addition, your options in the state are different than those in other states since Hawaii has its own wage and exemption standards. If you decide to file a bankruptcy case, an attorney or online legal services provider can help.

Related articles

Can You File Chapter 7 When Bills Are Current?

Bankruptcy can help you get a fresh start financially by erasing, or discharging, some of your debts or giving you time ...

Can They Foreclose on Your Home If You Have Filed Chapter 7?

If you're in over your head with debt, filing under a Chapter 7 bankruptcy is one option to obtain financial relief. ...

Ways to Prevent the Loss of Your Home in Chapter 7 Bankruptcy

U.S. bankruptcy law serves two purposes. The first is to give people an opportunity for a new start by wiping away some ...

Laws on Debt Forgiveness Through Chapter 13

When debt piles up, individual debtors may need the structure of a bankruptcy case to get back on their feet again. If ...

Browse by category
Ready to Begin? GET STARTED