A good question came up the other day from one of my prospective bankruptcy clients. They asked what would happen to their real estate holdings in another country if they choose to file a Chapter 7 bankruptcy with my firm. They also asked if it was something that had to be disclosed since it was not in the U.S. The first question is a bit tricky so I'll address the second part first. Yes. You must disclose the foreign property in your bankruptcy petition. The law makes no distinction between your property located in the U.S. vs. property outside the U.S. If its yours it needs to be listed down in the petition. This would be the same logic if you had a bank account outside the U.S. You must disclose those in your Chapter 7; same goes for all your other assets.
On the question of how would that asset be treated in a bankruptcy filing, I'll give you the typically lawyer answer...It depends. If you are otherwise qualified to file a Chapter 7 under the laws of your State, and in my clients case, Oregon; then as noted above you must disclose the existence of the property. Then we would need to determine a value for that asset. Is there a loan against it; how is the property titled, is their any government intrusion on the property that would preclude its sale? Also what affect would the currency of the home country have on the value currently and at the projected filing date as well as the possible date of the seizure by the trustee? Once you get all that then we would need to know if we can protect any equity that may be in there. Again it would depend. There is case law out there that states if you are not a resident of any State then you cannot claim an exemption in the property; if that was the case then you may have to forfeit the entire property to the trustee. If you can claim an exemption what State would it be. Just because Portland Oregon was your bankruptcy filing location doesn't always mean you would use Oregon exemptions.
As you can see this is a very complex question with a lot of moving parts. In order to successfully navigate such an issue its would be a really good idea to sit down with a knowledgeable bankruptcy attorney in your area to make sure you are property protected. If you are in the Portland Oregon area our team of bankruptcy attorney's would be happy to sit down with you for a no-cost consult and discuss if a Chapter 7, Chapter 13 or other filing would work in your situation. Feel free to contact us directly through this site.
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