Chapter 15 Bankruptcy
Chapter 15 Bankruptcy – Filing in another country
Chapter 15 is the least filed and the least well-known of all types of bankruptcy.
The purpose of Chapter 15, and the Model Law on which it is based, is to provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country. This general purpose is realized through five objectives specified in the statute: (1) to promote cooperation between the United States courts and parties of interest and the courts and other competent authorities of foreign countries involved in cross-border insolvency cases; (2) to establish greater legal certainty for trade and investment; (3) to provide for the fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested entities, including the debtor; (4) to afford protection and maximization of the value of the debtor’s assets; and (5) to facilitate the rescue of financially troubled businesses, thereby protecting investment and preserving employment. 11 U.S.C. § 1501.
Generally, a chapter 15 case is ancillary to a primary proceeding brought in another country, typically the debtor’s home country. As an alternative, the debtor or a creditor may commence a full chapter 7 or chapter 11 case in the United States if the assets in the United States are sufficiently complex to merit a full-blown domestic bankruptcy case. 11 U.S.C. § 1520(c). In addition, under chapter 15 a U.S. court may authorize a trustee or other entity (including an examiner) to act in a foreign country on behalf of a U.S. bankruptcy estate. 11 U.S.C. § 1505.
An ancillary case is commenced under chapter 15 by a “foreign representative” filing a petition for recognition of a “foreign proceeding.” (1) 11 U.S.C. § 1504. Chapter 15 gives the foreign representative the right of direct access to U.S. courts for this purpose. 11 U.S.C. § 1509. The petition must be accompanied by documents showing the existence of the foreign proceeding and the appointment and authority of the foreign representative. 11 U.S.C. § 1515. After notice and a hearing, the court is authorized to issue an order recognizing the foreign proceeding as either a “foreign main proceeding” (a proceeding pending in a country where the debtor’s center of main interests are located) or a “foreign non-main proceeding” (a proceeding pending in a country where the debtor has an establishment, (2) but not its center of main interests). 11 U.S.C. § 1517. Immediately upon the recognition of a foreign main proceeding, the automatic stay and selected other provisions of the Bankruptcy Code take effect within the United States. 11 U.S.C. § 1520. The foreign representative is also authorized to operate the debtor’s business in the ordinary course. Id. The U.S. court is authorized to issue preliminary relief as soon as the petition for recognition is filed. 11 U.S.C. § 1519.
Through the recognition process, chapter 15 operates as the principal door of a foreign representative to the federal and state courts of the United States. 11 U.S.C. § 1509. Once recognized, a foreign representative may seek additional relief from the bankruptcy court or from other state and federal courts and is authorized to bring a full (as opposed to ancillary) bankruptcy case. 11 U.S.C. §§ 1509, 1511. In addition, the representative is authorized to participate as a party of interest in a pending U.S. insolvency case and to intervene in any other U.S. case where the debtor is a party. 11 U.S.C. §§ 1512, 1524.
Chapter 15 also gives foreign creditors the right to participate in U.S. bankruptcy cases and it prohibits discrimination against foreign creditors (except certain foreign government and tax claims, which may be governed by treaty). 11 U.S.C. § 1513. It also requires notice to foreign creditors concerning a U.S. bankruptcy case, including notice of the right to file claims. 11 U.S.C. § 1514.
Southern Utah Chapter 15 Bankruptcy Attorney
Nate Reeve is a seasoned bankruptcy attorney here at Ruesch & Reeve PLLC, he has years of experience and has filed thousands of bankruptcy cases in Utah. From effectively providing insight regarding your rights, helping you understand the basics, and protecting your rights through the entire process giving our clients the very best advice and peace of mind during this difficult time.
Is Bankruptcy Right for Me?
Deciding whether to file for bankruptcy and what type of bankruptcy, will depend on your financial circumstances and goals. There are three types of bankruptcy we explore with each client during our initial consultation. Chapter 7 offers a way to discharge and eliminate debt but may require the surrender of some assets. Chapter 13 (for individuals) and Chapter 11 (for businesses) involve the reorganization and repayment of debt under the protection of the bankruptcy court.
Ruesch & Reeve PLLC can guide you through your bankruptcy options so that you know every advantage and disadvantage of bankruptcy when deciding if bankruptcy is right for you.
With new laws it's not worth it to file for bankruptcy
False. The new law effective October 2005 allows you to quality for a Chapter 7 bankruptcy if your household income is less than your state’s median, or if you pass a “Means Test” to see if you have qualifying, low disposable income.
I have to have a large amount of debt before qualifying for bankruptcy
False. The question to ask is, “Is my debt load overwhelming compared to the amount of disposable income I currently have?”
I will lose everything I own including my car and home
False. Every state has exemptions which allow you to keep bare necessities. Insert link to info below in red. A place to live and a way to drive to work could be considered bare necessities.
It will take at least seven to ten years for my credit to recover from bankruptcy
False. Even with a bankruptcy showing for up to ten years, you can begin to build credit immediately after filing. The national average shows credit can be recovered in as little as eighteen months.
Everyone will think I'm a bad person if I file for bankruptcy
False. Someone must specifically be searching for your bankruptcy to find it in the public record. Always remember that bankruptcy provides relief. It is not a punishment demanded by your creditors. Law makers enacted laws to allow people to financially have a fresh start.
After I file for bankruptcy creditors can still garnish my wages
False. In Chapter 7 bankruptcies any wages you earn after the filing are yours to keep. Chapter 13 bankruptcy includes a pre-approved plan to pay off debt over a specific amount of time. In this case part of your earnings will be applied to your debts.
The following is a list of property that is generally exempt from seizure or collection under Utah law
- Burial plot for you or anyone in your family; ;
- Health aids that are reasonably necessary ;
- Public Benefits such as General Assistance, Social Security, Disability, Unemployment, Worker’s Compensation, ;
- Benefits used for medical, surgical, or hospital care for you and your dependents ;
- Veterans Benefits ;
- Child Support ;
- Alimony and separate maintenance ;
- Money or assets in a Qualified Domestic Relations Order (QDRO) ;
- One clothes washer & dryer, refrigerator & freezer, stove & microwave, and sewing machine ;
- All Carpets in use at your house ;
- Food and other provisions sufficient for 12 months for you and your family ;
- Clothing that is reasonably necessary (not including jewelry or fur coats) ;
- Beds and bedding for you and your immediate family ;
- Artwork depicting or produced by you or immediate family (unless such artwork is held as part of a trade or business) ;
- Insurance proceeds, judgment, or settlement that are compensatory for bodily injury or wrongful death to you or to someone for whom you are or were a dependent ;
- Cash value of Life insurance policy ;
- Pensions, IRA, 401(K) plans and retirement plans ;
- Sofas, chairs, and related furnishings reasonably necessary for one household, up to a total value of $500 ;
- Dining and kitchen tables and chairs reasonably necessary for one household, up to $500 per debtor ;
- Animals, books, and musical instruments, up to a total value of $500 ;
- Heirlooms or other items of “particular sentimental value” up to a total value of $500 ;
- Implements, professional books, or tools of your trade, all having a total value not exceeding $3,500 ;
- Motor vehicle (1) not exceeding $2,500 in value, used primarily for daily transportation, and not used for recreational purposes ;
- Cars with equity up to $2,500 ;
- House or primary personal residence with equity up to $20,000 per debtor ;
- Real property that is not primary personal residence with equity up to $5,000 per debtor ;
The law office of Ruesch& Reeve is hands down the best law firm in town. They were very friendly, gave me all the details on how they would handle my situation which made me feel secure in how they were going to handle my situation.
Nate Reeve and his staff helped my husband and I through the bankruptcy process in the most caring and professional manner. He prepared us for every phase and was available when we had questions.
A great and trustworthy company. Definitely recommend. Ruesch and Reeve explained all the steps very clearly and communication is always quick and concise.