Debt laws vary from country to country, and within the U.S., those laws even vary from state to state. The legal minutia around the debts you owe can quickly become complicated even within Minnesota regulations, but when out-of-state debts and foreign debts are introduced, those difficulties can increase ten-fold.
These complications may never become a problem for the debtor if they continue to make regular payments month to month, but if the debtor misses payments or chooses to file for bankruptcy, it can be extremely difficult to wade through those legal waters without professional help. If you’re considering filing for bankruptcy in Pipestone, MN, and you have foreign debt in addition to your U.S. debts, Behm Law Group, Ltd. can protect you from creditor action and guide you through the process.
If you hold foreign debt, it can be discharged in your bankruptcy case. However, that debt is only officially discharged if your foreign creditors domesticate and enforce that debt.
Enforcing Foreign Debt
When you move from another country, your creditors in the original country cannot pursue collection actions unless they domesticate that debt, or you return to that country. This rule applies to bankruptcy as well, which means that if you want to discharge a foreign debt, your creditors must domesticate that debt or drop the debt completely. It may be easier to convince your creditor to domesticate a debt if they’ll gain some reimbursement from asset liquidation or a repayment plan.
Domesticated in Bankruptcy
If your foreign debt is domesticated, it will be handled in bankruptcy depending on the type of chapter you file. If you file for Chapter 7 bankruptcy, your non-exempt assets with value in excess of your allowable bankruptcy exemptions are liquidated and your debts are discharged. Complications with foreign debts arise if the country you owe debt in has differing bankruptcy laws. In most cases, these issues are related to the portioning amount of the values from liquidated assets, but this is an issue the courts will resolve for you.
When you file for Chapter 13 bankruptcy, similar issues arise with your foreign creditors in the repayment plan structure. Chapter 13 works to restructure your debts into a manageable repayment plan where you repay priority and secured debts in full and all other debts in predetermined portions from 0%-100%. If your foreign debts are unsecured, the courts may have issues deciding how much you’ll repay those creditors when their country’s legal system dictates higher or lower repayments.
Your foreign debts can be resolved in your case, but it’s important to understand how they’re enforced and what complications may arise in bankruptcy. To learn more about filing for bankruptcy in Pipestone, MN, or to get started on your case, contact Behm Law Group, Ltd. at (507) 387-7200 today.