Why would someone come to the United States to file bankruptcy? Wait, why would the bankruptcy code allow non-U.S. citizens to file bankruptcy?
Title 11 Section 109(a) of the U.S. Code simply states, “[O]nly a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.” Just who does this include?
- Resident U.S. citizens
- Nonresident U.S. citizens if they own a home, business, or property in the U.S. (you are not a municipality)
- Non-U.S. Citizens who are residents, own a home, business, or property.
As you can see, the bankruptcy code doesn’t care whether filers are citizens—just if they live here or own stuff here. The only real requirement for the bankruptcy court to have personal jurisdiction over you is if you have lived in that state for the better part of the last 180 days. All non-U.S. citizens need to do is prove they are who they say they are (courts don’t like fraudulent filings). That means you must have a government-issued photo ID card and either a Social Security card or Individual Tax Identification Number.
The bankruptcy code allows foreigners to file because it may be easier for them to do so, especially when they own property here and took on debt from a U.S. bank to finance the purchase, for instance, a mortgage to buy a home. It doesn’t make much sense for a homeowners on a work visa to have to return to his or her home country to file bankruptcy on debts incurred for property purchased in the United States. Moreover, foreign bankruptcy courts may not have jurisdiction over American banks, so it may be that the U.S. is the best place to file.
On rare occasions, non-U.S. debtors will owe money to both U.S. banks and foreign ones and choose to file in the U.S. Those situations are much more complicated, and when those circumstances come up, you definitely want to hire an experienced bankruptcy lawyer. However, the basic premise is clear: lack of citizenship is not a barrier to bankruptcy.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Haines & Krieger Las Vegas bankruptcy attorney for a free initial consultation by calling 702-880-5554.