Many individuals living in the United States, especially those who have migrated to the US, have foreign assets. When debts are too overwhelming, bankruptcy may be the only way to put your financial life in order. When you are filing for bankruptcy, it is common that you want to protect your valuable assets. Individuals with international assets have significant concerns when it comes to bankruptcy. You will want to understand the fate of these assets for each category of bankruptcy. If you have iteration assets to protect during bankruptcy, it is essential to do so with legal representation. At Los Angeles bankruptcy Attorney, we understand how important it is to protect your international assets. Our group of competent attorneys works with clients from Los Angeles, CA, to ensure that your best interests are observed during bankruptcy.
Disclosure of International Assets in Bankruptcy
Any property that you have outside of the United States, including cars or homes, is considered an international asset during bankruptcy. Filing for bankruptcy is a tough decision to make, and you may want to protect these assets from liquidation. However, if you have a bank account, investment property, vehicle, or any other asset, you must include it in your bankruptcy petition. Although it may seem unlikely for the bankruptcy trustee to get your international property, they can liquidate that asset to pay debts. Whether or not your foreign assets will be affected by filing for bankruptcy will depend on the category of bankruptcy you choose.
Although some foreign assets are considered exempt when it comes to bankruptcy, you are still required to indicate their presence. When you fail to mention the existence of international property in Chapter 7 or 13 bankruptcy petition is an offense. Concealing of assets can result in criminal charges, dismissal of your bankruptcy petition, or even complete loss of the property in question.
Bankruptcy filing should be an open process. Even though you can exempt some of your property from liquidation, you need to make it open what you own regardless of their location. As part of the paperwork, the bankruptcy court will examine all your financial affairs for the last ten years. Of the investigators discover a fraudulent attempt, you may not enjoy the benefits of a bankruptcy discharge. You will be required to include the following in your bankruptcy petition:
- Any property transfers you have made recently and during the period of bankruptcy
- Gifts or charity contributions made
- Current sources of your income
- Losses you have made with your investments or property
- Assets you are holding on behalf of another person
- Moved, transferred or sold financial accounts
- Foreign assets that you own at the time of bankruptcy.
You will be required to sign a statement to ascertain that the information you gave about your financial situation is correct and complete.
After filing for bankruptcy, the trustee may decide to pursue your international assets. However, their decision will be determined by the value of the assets. When considering the property to be liquidated, the bankruptcy trustee will want to find out its worth. If the returns from selling can pay a substantial amount of your debts back in the USA, the assets will be taken away in bankruptcy. Properties that will not make an excellent economic sense may not be pursued in bankruptcy. Also, the category of bankruptcy you file will determine whether you get to keep your international assets. In Chapter 7 bankruptcy, a property that is not your residential home can be auctioned to pay some debts. A Chapter 13 bankruptcy will help you make a three to five years plan to pay your debts. This you can keep your international assets.
Foreign Assets in Chapter 7 Bankruptcy
Sometimes, you may land into severe financial difficulty due to a job layoff, medical expenses, or even after a divorce. Fortunately, you can seek relief for all your debts by filing for a Chapter 7akruptcy. After a successful chapter 7 bankruptcy, your creditors cannot come after you to collect their debts. Debts you can eliminate:
- Tax bills which date more than three year
- Credit card debts
- IRS debts as well as
- Other unsecured debts
Liquidation bankruptcy helps you reorganize your financial life by keeping creditors off your back. However, if you are not current with payment of your mortgage, the bankruptcy trustee can liquidate your property to pay these debts. Even when the property is abroad, the bankruptcy court can sell the property to pay your debts.
In the bankruptcy petition, you will inform the court that the only income you have is enough to pay your expenses. Also, you can indicate that paying your existing debts will not be possible. The bankruptcy trustee has a right to enter the property and make an inspection. With this, it is essential to disclose the existence of international wealth. If the foreign assets are eligible for liquidation, they may be sold to pay your debts.
If you are not able to continue paying for a mortgage, your creditors may decide to push through with a foreclosure. After filing for a Chapter 7 bankruptcy, you may not be able to retain equity in your property. Although the state will provide an exception for a certain percentage of home equity, the exemption will only be applicable to your primary residential home. If you have a valuable foreign property, you may lose it after the debt is discharged in a chapter 7 bankruptcy. This asset will be sold to pay off some of your debts.
International Assets in Chapter 13 Bankruptcy
Chapter 13 bankruptcy allows you to make a repayment plan for your debts. This will prevent the liquidation of your assets. However, this category of bankruptcy is not for everyone. You must meet the eligibility criteria, including:
- A steady income. To relieve your debts using a chapter 13 bankruptcy, you must prove that you can meet your monthly obligations as stipulated by the bankruptcy repayment plan. If your income is too low, you cannot qualify for a repayment plan.
- Debt limits. Your secured and unsecured debts should be within limits to qualify for chapter 13 bankruptcy,
- . If you have secured debts, the creditor can take away property such as cars and homes if you cannot settle the debts. On the other hand, unsecured debts will not give the creditor a right to come after you. If you are unable to pay a mortgage, your international assets can be taken away and sold to pay the debts.
- Nature of your finances. Chapter 13 bankruptcy is only available for individual investments. You cannot apply for this category to escape business debts. However, business debts that are your liability could be wiped off as part of your repayment plan. Whether you retain your assets in chapter 13 bankruptcy will be determined by two primary factors. If the property can pay for itself or it is making a loss for the last five years. If personal funds were used to purchase the assets, the bankruptcy trustee could sell it to pay the debt.
If the property is making some profit, the income can be added to your repayment plan. If the creditors repossess a property purchased on a mortgage, you will not have to continue the mortgage payments. Sometimes, your investments are an advantage in bankruptcy, and you will be allowed to keep them. However, if an asset is a liability, it will need to be sold out and pay some of your debts. If you want to protect your international assets during a bankruptcy, it is crucial to seek the legal representation of a bankruptcy attorney.
Depending on the mortgage you have, you may be able to have a loan cram-down. This occurs when your loan is reduced to an amount that equals the value of your home becoming part of unsecured debts. As long as an asset is not your primary residential home, it can suffer the heat of a bankruptcy. You will be required to negotiate with the creditors and come up with a repayment plan that works for both of you.
How you can protect your International Assets in Bankruptcy
When you experience financial stress, it can be tempting to file for bankruptcy and wipe out your debt. It is essential to consider how declaring bankruptcy will affect your valuable foreign assets. If you have some international assets to protect, you will need to:
- Avoid giving wrong information or concealing some facts.
When filing for any category of bankruptcy, the court expects you to provide full and correct information about all the assets you own at the time of liquidation. Failure to do this will be considered an offense. The Federal Bureau of Investigation will do their research on bankruptcy crimes; thus, it is essential to be upfront on all issues. If you have an international asset, you need to let the court know of its existence.
- Avoid moving your assets
When planning to file for bankruptcy, you may get tempted to sell or transfer your assets for safekeeping. If the bankruptcy court finds it suspicious, they may deny your bankruptcy petition. If you sold the assets before bankruptcy to cover for daily expenses, you need to be ready to explain the transactions you make during the period of bankruptcy.
- File bankruptcy when you are not expecting to receive assets
Once you receive a substantial amount of assets, you may not be bankrupt anymore, and the court could deny your bankruptcy petition. If you are expecting to receive some assets, you need to reconsider bankruptcy.
- Stay away from other debts
Accumulating new debts three months to the filing of a bankruptcy can be considered an intentional move. Your creditors may object to you getting a bankruptcy discharge
- Avoid rushing a bankruptcy
Filing for chapter 7 bankruptcy will wipe out most of your debts and keep creditors from contacting you for payments. However, you can lose your valuable assets in the process. This is through liquidation to pay for the debts you have accumulated. If your international assets are valuable and can be able to pay for some debts, your bankruptcy trustee can liquidate the assets. If you want to file for bankruptcy, you need to avoid rushing the process. It is essential to investigate what each type of bankruptcy will do for you and how your valuable assets and property will be affected. If you want to protect some international assets during a bankruptcy, it is essential to seek the legal representation of a bankruptcy attorney.
- Withholding Information on International Assets during a bankruptcy
- Failure to disclose the existence of your international assets in bankruptcy can attract criminal charges. Various acts can be considered as attempts to hide assets, including:
- Transferring assets to another person during or a little while before filing for bankruptcy. Also, failing to disclose the transfer of assets can be considered an attempt of fraud in bankruptcy.
- Creating fake mortgages and liens to the property making it look less valuable
- Lying about asset ownership. This could be done by failing to indicate that you have international properties or you are an owner of a particular asset
Bankruptcy proceedings should be transparent, and the trustee can find hidden assets. The hidden assets will be seen through examining your financial records, payroll documents, and online asset searches review of your debts as well as from public records. If any hidden assets are discovered, the bankruptcy trustee will file a lawsuit against you. In some instances, you can genuinely forget to list some of your assets in the petition. Some of the assets you may forget to register are:
- Co-owned assets which could be local or international
- An inheritance or potential assets you are expecting to receive and is not sorted out by the court
- Beneficial interests in trust funds
- Lawsuit compensation that has been completed in court
If you fail to inform the court that you have international assets during a bankruptcy petition, you will face the following consequences:
- You will not enjoy debt relief through bankruptcy. If the bankruptcy trustee discovers that you have attempted to hide assets, you will not be entitled to receive a bankruptcy discharge. All the debts that you owed will remain constant, and your creditors can come to claim for payment. However, in chapter 7 bankruptcy, the bankruptcy case will not be dismissed. Some of your property may be handed over to the trustee for liquidation ad payment of your debts.
- Revocation of your bankruptcy discharge. Sometimes the trustee will find a hidden asset when you have already been granted a release. In this case, they can request the court to take back the discharge. In chapter 7 bankruptcy, the revocation can be done within one year after the discharge is granted. If your bankruptcy is revoked, you will still be liable for the debts you owed before the discharge.
- You will not access a discharge for those debts in a subsequent bankruptcy. The assets you listed in the bankruptcy that was revoked cannot be discharged in a subsequent bankruptcy.
- You will face criminal charges. After listing all the assets that you own, you will sign a document to certify that the information you provided is true and accurate. If the bankruptcy trustee finds out that you attempted to hide your international assets, it is considered to be bankruptcy fraud. If you are found guilty of bankruptcy fraud, you will spend up to twenty years in prison, a fine of up to $250,000, or both.
A mistake in listing your assets can cause you to be falsely accused of attempting to hide property. If you are facing criminal charges for alleged bankruptcy fraud, it is vital to seek help from a competent bankruptcy attorney.
How does International Assets Affect Bankruptcy?
If you have non-exempt international assets, your bankruptcy trustee may be required to move so they can sell the assets. Also, they will have to assess the property to ascertain whether it is valuable enough to pay for non-exempt debts you owe. If the asset is a piece of property or a vehicle, the process of selling the item may slow down the bankruptcy proceedings. This will cause you to spend more time in a bankruptcy court. To understand the chances you have of retaining your international assets and how they will affect bankruptcy, schedule a consultation with a bankruptcy attorney.
Protect International Assets with the Help of a Los Angeles Bankruptcy Attorney near Me
Filing for bankruptcy is a personal decision you make when you can no longer pay your debts. If you want to protect some of your valuable assets during bankruptcy, it is essential to make the right decision the most suitable category of bankruptcy. The court will examine all your assets, both local and international, before granting you the bankruptcy. To effectively protect your foreign assets, it is essential to go about bankruptcy with the help of a knowledgeable bankruptcy attorney. Our attorneys will help you understand your options so you can make the right decision regarding your foreign investments. Contact the Los Angeles bankruptcy Attorney on 424-285-5525 from any location in Los Angeles, and allow us to guide you.