The United States Constitution gives the federal government power over bankruptcy law. But what happens if you incur debt in the US and then move outside the country?
Generally, judgments levied against you by federal or state courts only have jurisdiction within the US. So, if you live, work, and have your assets in a foreign country, there is no way for domestic debtors to enforce a judgment. Though any assets, such as real-estate or domestic bank accounts, can be taken pursuant a judgment. Thus, don’t think that leaving the US can protect your state-side assets. Notice that I started this paragraph off with the word “generally.” It is possible for a domestic judgment to follow you and your assets into another country, though this is dependent upon the laws of that country.
Your debt and any/all judgments against you will be waiting for you if you return to the US. You can file bankruptcy upon returning state-side. Another option is to file bankruptcy when you’re still outside the country. In this case, you will file in the bankruptcy district where the majority of your assets are located.
If you or someone you know has domestic debt and is living abroad, feel free to give us a call to schedule your free consultation. I’ve helped thousands of clients file bankruptcy in Fairfield, and would be happy to assist you.
Categorized in: Bankruptcy