Unsurprisingly, many New Yorkers live outside the United States, but they may still have significant connections to the state. If they run into financial difficulties, they might wonder if they can file bankruptcy from whatever country they happen to be living in. Fortunately, the laws regulating the federal courts make it possible for debtors to do just that. Here are a few things worth knowing.
By filing bankruptcy, a debtor is giving the bankruptcy court personal jurisdiction over his or her case, and since bankruptcy cases are filed in bankruptcy courts, subject matter jurisdiction—a court’s capacity to hear specific types of claims—is evidently present. The only question is whether the “venue” for the bankruptcy is proper. 28 U.S.C. § 1408 sets the rules for proper venue in bankruptcy cases. It is in the district:
(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period than the domicile, residence, or principal place of business, in the United States, or principal assets in the United States, of such person were located in any other district.
What this means is that if the debtor lived in, owned property in, or conducted business in New York over the previous six months, then filing bankruptcy in the appropriate federal district in the state will not lead to any venue problems. Even a bank account would be sufficient. Thus, New Yorkers who live in foreign countries will usually be able to file bankruptcy there. Venue becomes problematic if the debtor has lived outside the country for more than six months and doesn’t have any real connections to New York. So if a debtor takes on debts, closes his or her accounts, moves overseas for more than six months, and then tries to file bankruptcy, there might be venue problems. Possibly the creditors might try to change the venue for their convenience, but the case won’t be dismissed.
The remaining problems with filing bankruptcy from outside the U.S. are practical. For instance there’s the financial management course, but a debtor can satisfy that requirement remotely. The bigger problem is the Section 341 meeting of the creditors for which the debtor must be present. If the debtor is unable to be in the country for that, then there are a few options. The debtor can try to arrange to attend remotely, like by a Skype connection. If that doesn’t work, then the debtor can execute a power of attorney document to authorize another person to attend the meeting in his or her place. Beyond that it shouldn’t require too much more effort aside from staying in contact with your lawyer.
Currently, because of the pandemic, all hearings are on the phone in any case. Once this emergency is behind us the debtor who can’t attend the 341 meeting in person will once again need to make arrangements, either to attend the meeting remotely, or to authorize another person to attend the meeting in his or her place.
If you’re thinking of filing bankruptcy from overseas, it’s crucial to ensure that you are represented by an experienced New York bankruptcy lawyer to ensure the process goes smoothly.
For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.