How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Alex J. Your Own Question
Alex J.
Alex J., Solicitor
Category: Bankruptcy Law
Satisfied Customers: 3666
Experience:  Bankruptcy, liquidations, administrations, pre pack sales, re use of company names and director duties and offences.
13113900
Type Your Bankruptcy Law Question Here...
Alex J. is online now

Is there any agreement between the UK and the USA regarding

Customer Question

Is there any agreement between the UK and the USA regarding bankruptcy?

I am British and invested in a couple of properties in the States. Unfortunately they did not cashflow. My US attorney says to file Chapter 13 Bankruptcy (reorganisation of debt). However, he says he needs to know all about my UK investments and debt as that gets reorganised too. I have voiced doubt that this is so. I do not believe that a US Judge has any jurisdiction for debt reorganisation outside of the USA.

Can someone please clarify this for me?
Thanks
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  Nicola-mod replied 4 years ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 4 years ago.
Happy to wait as this is VERY important to me. Also want to add that I do NOT have any UK debt problems. My mortgages have never been late or missed so I really don't want the UK mortgage companies involved with anything happening in the USA.
Expert:  Nicola-mod replied 4 years ago.
Hello,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Expert:  Alex J. replied 4 years ago.
Hi,

Thank you for your question and welcome to Just Answer.

There are arrangements for the enforcement of foreign bankruptcy proceedings in the UK however this does not invite forum, it really depends where most of your assets/ income lie.

Currently where is the bulk of your estate based?

Kind regards

AJ
Customer: replied 4 years ago.
Hi
The bulk of my estate and business is in the United Kingdom. However my UK properties DO cash flow and ALL my UK mortgages ARE current.

My fear is that the USA bankruptcy lawyer is saying that ALL worldwide debt has to ge declared AND will be reorganised. I said I believe that is NOT possible as a US Judge would have NO jurisdiction outside of the USA so why would my UK properties be scrutinised. By the way, whilst my UK properties DO pay their own way there is negative equity as the mortgages are MORE than the value of the properties.
What I need to know is is there a law that says the USA lawyer is correct?
Is there a case law which STOPPED the USA from adding the non USA debt at a Chapter 13 hearing?
Expert:  Alex J. replied 4 years ago.
Hi,

Thank you.

I cannot speak for US law but the Bankruptcy Order would not be effective in the UK.

The EU Regulations on Insolvency Proceedings state that the proceeding must be brought where your centre of main interest (COMI). Therefore if most of your business and affairs are in the UK then the English courts will have Jurisdiction over your insolvency proceedings.

Your creditors would have to come to England and petition for your bankruptcy here. If a majority of your creditors are based in the UK as well it is extremely unlikely a court would accept the Jurisdiction of a US court as it would profoundly prejudice your creditors in the UK.

The relevant legislation in the EU is Council Regulation (EC) No 1346/2000 on insolvency proceedings (Insolvency Regulation).

Kind regards

AJ

Related Bankruptcy Law Questions