Filing Bankruptcy While Living Abroad

If you’ve accrued debts in the United States and have since relocated to another country, you might be wondering whether you could file for bankruptcy and receive a discharge. Although certain challenges might arise due to unusual circumstances, it could be possible to legally file for bankruptcy protection while living outside of the United States. Living and working outside of the United States does not, by itself, preclude filing bankruptcy.

First - Figure Out If Bankruptcy Can Be Avoided

Regardless of whether the bankruptcy can be filed, it is important to consider whether seeking a bankruptcy discharge is necessary and prudent under the circumstances. If the borrower does not earn income or maintain any assets in the U.S., the creditor’s ability to collect the debt is limited, and if the borrower will not be residing in the U.S., their exposure is reduced. Filing for bankruptcy requires careful consideration, as there could be serious consequences to filing without carefully evaluating all relevant factors.

Oftentimes, the primary intent when a person files for bankruptcy is to discharge credit card debts and other bills, so that their assets will be protected from seizure by creditors. In the event the creditor brings a debt collection lawsuit and obtains a court judgment in New York, they could seek to collect the judgment through garnishing wages, freezing bank accounts, and placing liens on real property. If the borrower does not have garnishable income and doesn’t have a bank account and real property, then they aren’t exposed to these collection remedies – which might obviate the need for bankruptcy. Learn how to avoid bankruptcy.

Reasons Why Someone Would File U.S. Bankruptcy From Abroad

1. They earn income in the United States
2. They own a house or other real property in the United States
3. They maintain assets, such as cash, jewelry, or inventory, in the United States
4. They intend on residing in the United States in the future
5. They are concerned about the ramifications of their debt impacted them in their current country of residence

Eligibility for U.S. Bankruptcy While Living Overseas

Under 11 U.S.C. §109, anyone can file for bankruptcy protection in the United States, so long as you meet one of the following requirements:

• You reside in USA; or
• You maintain a domicile in USA; or
• You maintain a place of business in USA; or
• You have property in USA

In other words, if you don’t live in the United States, and don’t maintain a domicile or business here, then you must have property in the U.S. in order to file. For these purposes, property is not necessarily defined as real estate. Property is an asset. In some districts, having a bank account might be considered property sufficient for bankruptcy filing purposes.

Can I file Bankruptcy in New York While Abroad?

Under 28 U.S.C. §1408, the bankruptcy must be filed in the district where, for the majority of the prior 180 day period, the debtor has:

1. Resided; or
2. Domiciled; or
3. Principal place of business; or
4. District where assets are possessed.

If you’ve been abroad in excess of 180 days, then we would look to where your principal assets were in the 180-days prior to that period. In a situation where a person has lived abroad beyond this time, most likely the proper district for filing would be wherever the borrower’s primary assets are.

Qualifying to file bankruptcy in New York does not necessarily mean you can avail yourself to the New York State exemptions, including the generous homestead exemptions that could be available for primary residences in NYC.

Special Considerations For Foreign Filing of New York Bankruptcy

An important factor to keep in mind is that if you file for bankruptcy in NY, you’ll most likely be required to visit New York in order to attend the Meeting of the Creditors, and if necessary, attend follow up meetings, hearings, and examinations. A bankruptcy petitioner is required to cooperate with the Trustee and answer any required questions before a discharge could be granted.

There are some situations in which a physical appearance at the required Trustee Meetings may be excused. Examples of situations that may merit an excuse from appearing include being deployed overseas in the military, or due to health and medical circumstances. The Court or Trustee would make this determination.

Dedicated Bankruptcy Lawyers in NYC

New York City is renowned as being a melting pot of cultural diversity. While walking down any major thoroughfare in Brooklyn, Queens, or Manhattan, you may encounter people from all parts of the globe. Therefore, it is no surprise that a person who has incurred debts while in New York might seek to discharge those debts while they are residing abroad.

Avoid unnecessary problems by letting our experienced attorneys guide you throughout the bankruptcy process. Our dedicated team can help you understand whether you qualify, what will be required, and help identify potential issues before they become a problem. Furthermore, we can help evaluate your file to determine whether you may qualify for alternatives to bankruptcy, such as debt settlement.

Our firm is easily accessible across NYC. Let the skilled advocates at the Law Office of Simon Goldenberg PLLC guide you safely to a financial fresh start. Contact us today.