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Advice on Moving Overseas When in Chapter 13 Bankruptcy - The Bills.com Blog
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Advice on Moving Overseas When in Chapter 13 Bankruptcy
Question: I've been in Chapter 13 for a year now. My partner has had to return to the country he is from due to family concerns, and I want to join him there. Will I have to continue making payments? I don't plan to come back to the US to work, but on the outside chance something would happen to cause me to have to return and work here, whatwould happen, then?
Answer: I would strongly recommend that you consult with your bankruptcy attorney to determine the best course of action in these circumstances. Since I do not know the details of your financial situation or your bankruptcy case, I cannot tell you whether or not you should continue making your payments to the bankruptcy court, or if you choose to stop, what the potential implications would be for you. However, I can tell you that if you choose to stop making payments on your Chapter 13 case, the court will likely dismiss your case, which could allow your creditors to resume collection activity against you. If you are living and working overseas, then it is unlikely that your creditors would be able to garnish your wages, even if they obtain a judgment against you in your state courts. On the other hand, if you have any assets in the U.S., any judgment creditors may be able to lien, or potentially even seize, your property and bank accounts, so if you have substantial assets in the U.S. that you are planning to keep after moving overseas, you may want to think twice about stopping your bankruptcy payments, as the bankruptcy court is currently protecting you from any such collection activity. Alternately, your attorney may be able to work with you to develop
a strategy to protect your assets while you are living overseas.
Theoretically, a creditor which obtains a judgment may be able to file a petition in your new country of residence to “domesticate” its U.S. judgment in the other country, depending on the country and what treaties the U.S. government has signed with that country relating to judgments. However, I think it highly unlikely that your creditors would pursue such complicated and expensive legal proceedings simply to collect on your delinquent debts, unless of course you owe hundreds of thousands of dollars to your creditors. Even if you do owe that much, I doubt that your creditors will try to pursue you legally overseas for failure to pay your debts, though they may continue to call you to try to collect.
If you decide to move back to the United States in the future, these creditors may be able to garnish your wages, levy your bank accounts, place liens on your property, etc., if the creditors have obtained judgments against you. What actions creditors can take against you depends on your state laws regarding enforcement of judgments; for more information about your state’s collection laws, you should visit http://www.bills.com/collection-laws/. If the creditors
have not sued you in your state court to obtain a judgment, then they can really do little more than call you to demand payment, unless the debt involved consists of federally insured student loans, taxes, child support, or some other type of “priority debt,” for which creditors can usually garnish your wages without first obtaining a judgment against you. Because you are potentially exposing yourself to legal action if you stop paying on your Chapter 13 case, you should probably only do so if you are relatively sure that you are not going to move back to the United States in the near future.
I again advise you to consult with your attorney to determine the best course of action given the circumstances. If you would like to read more about bankruptcy, you should visit the Bills.com Bankruptcy page at http://www.bills.com/bankruptcy/. Bills.com also offers some advice for consumers struggling with debt, available at http://www.bills.com/debt-help/. I wish you the best of luck in your plans to move overseas, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
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