I’ll start right off with the short-answer to this question: YES. You definitely need to include overseas property in your bankruptcy petition schedules.
My advice to debtors is the same that most consumer bankruptcy attorneys would give their clients: list everything. Always. If you’re not sure if it needs to be listed, list it anyway. Finding a way to list hard-to-classify, value, or locate property is really the primary task of the debtor’s attorney, however. But attorneys can only work with the information that is given with them, and, in my experience, debtors often neglect to inform their attorneys about property that doesn’t seem like it would be within the jurisdiction of the bankruptcy trustee governing the case. It is perfectly logical to assume that a United States bankruptcy trustee would not be able to reach extraterritorial property.
That is, however, an incorrect assumption. Depending on the location and value of the property, it is possible that the trustee will not want to take the trouble to deal with property located outside the United States. But this should not be assumed from the start. Occasionally, a trustee may simply happen to have professional or family connections in a foreign country, making it a simpler (and cheaper) matter for him or her to assess, reach, and, possibly, liquidate the property. You never know!
Given the fluctuation of the US dollar at the moment, it is important to be cognizant of the rising value of foreign currency in relation to our own. Property that might not have been worth the trustee’s while to liquidate may now be a more tempting prospect. That said, debtors considering bankruptcy should not be afraid to list overseas property, particularly if the property is located in a country whose currency has not risen past the US dollar in dramatic fashion, as many have. Such property is still, generally, quite easy to exempt.
The bottom-line: be sure to list all of your property for your bankruptcy attorney so that he or she may deal with it in the most efficient manner possible. The Bankruptcy Code requires that all property be disclosed, not merely US property, and any failure to disclose property, here or elsewhere, may result in the property’s liquidation, foreclosure, or invalidation of the bankruptcy itself.
If you are in southeast Michigan and are considering filing for bankruptcy but are concerned about the implications of your foreign property, please contact me at jhilla@aronofflinnell.com or (248) 977-4182 to schedule a free, initial consultation.
