Property in Another State or Another Country When You File Bankruptcy

Does bankruptcy reach property I own in another state or country?

Yes. Filing a case creates an estate comprised of your property "wherever located and by whomever held," including all legal or equitable interests you hold when the case begins (11 U.S.C. § 541(a)(1)). Nothing in that language stops at a state line or a national border. A quarter-interest in your grandmother's land in another state is an equitable interest. So is a bank account, a burial plot, or a house abroad. The estate also picks up rents and profits from that property, and certain things you inherit within 180 days after filing (11 U.S.C. § 541(a)(5), (a)(6)). What the estate reaches and what a trustee can practically sell are different questions, and distance affects the second one. But the analysis starts with the same rule everyone else gets: if you have an interest in it, it belongs on your schedules and gets sorted out from there.

What changes the answer for out-of-state and foreign property?

Three things do most of the work. First, your domicile history, because that generally drives which state's exemption law applies to what you own, and a recent move is the usual complication. Second, the nature of your interest, since a half-interest with three siblings, a life estate, and sole ownership are not the same asset even if they involve the same house. Third, whether there is real equity after the liens, because property that is fully mortgaged is a very different practical problem from property owned free and clear. Location itself matters mostly at the enforcement stage. A trustee may be authorized by the court to act in a foreign country on behalf of the estate, and may act in any way the applicable foreign law permits (11 U.S.C. § 1505). Foreign law and treaty obligations of the United States can also affect what happens (11 U.S.C. § 1503).

• Where you have lived, and for how long, before filing
• The exact form of your ownership interest, including co-owners
• Equity remaining after mortgages, tax liens and other encumbrances
• Whether a foreign proceeding involving the same debts already exists

What does federal law say about property located elsewhere?

The Bankruptcy Code is deliberately broad on this point. Section 541(a) describes the estate as all of the listed property "wherever located and by whomever held," and Congress's notes describe proceeds as intended in a broad sense that captures conversions of estate property into another form. Eligibility also turns on a connection to the United States: only a person who resides or has a domicile, a place of business, or property in the United States may be a debtor (11 U.S.C. § 109(a)). The Code contemplates international cases directly. Known creditors without United States addresses must be given the same notices as creditors here, with additional time as is reasonable under the circumstances (11 U.S.C. § 1514). Where this chapter conflicts with a treaty obligation of the United States, the treaty prevails (11 U.S.C. § 1503). A creditor already paid in a foreign insolvency proceeding is limited in what it can collect again here (11 U.S.C. § 1532).

Where do state or local rules change the outcome?

Exemptions are the big one. Exemptions are what let a filer keep a home, a car, clothing and household items, or receive some of the proceeds if property is sold, and they are not automatic: you must list property on Schedule C to claim it (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals). Which state's list you use is determined by domicile rules rather than by where the property sits, which is why someone who moved last year can end up claiming exemptions under the law of the state they left. Amounts and categories differ enormously between states, and we publish those on the state pages rather than restating them here. Some state statutes address out-of-county or out-of-state property directly; Georgia, for example, allows an applicant without enough realty in the county of residence to include tracts in other counties, with the survey done by the surveyor where the land lies (O.C.G.A. § 44-13-5).

• Which state's exemption set applies is a domicile question, decided before amounts matter
• State exemption amounts and categories are published on each state hub page
• A district's local rules can add procedure for valuing or selling property

What does this look like in practice?

Take three common situations. A person who moved from one state to another eighteen months ago still owns a vacation cabin in the old state; the cabin is estate property, and which exemption law reaches it depends on the domicile analysis, not on the cabin's zip code. A person with a small inherited share of family land in another state often finds the practical question is what a co-owned fractional interest is actually worth once liens and the difficulty of selling it are accounted for. A person who owns an apartment in another country still lists it, and the case may involve giving notice to creditors with foreign addresses (11 U.S.C. § 1514). If a foreign main proceeding has already been recognized, a case filed here may be commenced only if you have assets in the United States, and its effects are largely restricted to assets within United States territorial jurisdiction (11 U.S.C. § 1528). None of these outcomes can be predicted from the property's location alone.

What documents and information will I need?

You will be asked to file detailed information about creditors, assets, liabilities, income, expenses and general financial condition, and a case can be dismissed if you do not (Bankr. E.D. La. official guidance — Chapter 13 Form Packet). For property elsewhere, that generally means deeds or title documents, mortgage and lien statements, a basis for the value you assign, the names and interests of co-owners, and any tax or assessment records. Property you want to protect must be listed on Schedule C; if you do not list it, a trustee may sell it and pay the proceeds to creditors (Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals). Filing fees are the same regardless of where your property sits: the Chapter 7 filing fee is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)) plus a $78 administrative fee and a $15 trustee surcharge (Bankruptcy Court Miscellaneous Fee Schedule, Items 8 and 9). Foreign documents may need translation, which takes time to arrange.

What should I ask a lawyer about this?

Bring the specifics and ask targeted questions, because this is one of the areas where a general answer is nearly useless. Courts and clerks cannot give legal advice and say so plainly (U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?). Useful questions include which state's exemption law applies given your moves and dates, how your particular ownership interest should be valued and described, whether a trustee is likely to pursue a distant or foreign asset, and what a sale of estate property would involve if it came to that. Sales of property outside the ordinary course happen by motion with notice, and some districts require advertising in the county where the property is located (W.D. Pa. LBR 6004-1). Ask, too, what happens to a co-owner, and whether anything about the asset affects your choice between chapters.

• Every state you have lived in, with dates, going back several years
• The deed, title or account statement for each out-of-state or foreign asset
• Who else owns it with you, and how the interest is held
• Any foreign insolvency, collection, or court proceeding you know about

Frequently asked questions

Do I have to list property in another country?

Yes. The estate is comprised of your property "wherever located and by whomever held" (11 U.S.C. § 541(a)), so foreign assets belong on your schedules. Court guidance is blunt about the consequences of leaving things out: knowingly and fraudulently concealing assets or making a false oath in connection with a bankruptcy case can result in fines, imprisonment, or both.

I moved states recently. Which exemptions apply?

That is decided by domicile rules rather than by where you now live or where the property is, and a move within the look-back period is exactly the fact pattern that makes it complicated. The answer depends on your specific dates and can point back to the state you left. This is a question worth putting to a lawyer with your move history in hand before you file.

Can the trustee actually sell property in another state?

A trustee may use, sell, or lease estate property other than in the ordinary course after notice and a hearing (11 U.S.C. § 363(b)(1)). Distance does not remove that authority, though it can affect the practicalities. Some districts require the sale to be advertised in a newspaper of general circulation in the county where the property is located (W.D. Pa. LBR 6004-1).

What happens to creditors who live outside the United States?

They generally get notice. When notice is given to creditors generally, it must also be given to known creditors that do not have addresses in the United States, individually unless the court considers another form more appropriate (11 U.S.C. § 1514). Those notices state the claim-filing deadline and place, and rules must allow foreign-address creditors additional time as is reasonable.

Does a vacation home in another state stop me from filing Chapter 7?

Owning it does not by itself decide anything. In Chapter 7 a trustee may sell property to pay debts, subject to your right to exempt the property or a portion of the sale proceeds, and exemptions must be claimed on Schedule C. Whether a second property matters commonly turns on equity after liens and on which exemption law applies to you.

Does filing cost more if my property is out of state?

The court fees do not change. The Chapter 7 filing fee is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)), with a $78 administrative fee and a $15 trustee surcharge; Chapter 13 is a $235 filing fee (28 U.S.C. § 1930(a)(1)(B)) plus a $78 administrative fee. Costs like appraisals or translations are separate from what the court charges.

Sources

• 11 U.S.C. § 541 — Property of the estate · official source
• 11 U.S.C. § 363 — Use, sale, or lease of property · official source
• 11 U.S.C. § 109 — Who may be a debtor · official source
• 11 U.S.C. § 1514 — Notification to foreign creditors concerning a case under this title
• 11 U.S.C. § 1503 — International obligations of the United States
• 11 U.S.C. § 1505 — Authorization to act in a foreign country
• 11 U.S.C. § 1528 — Commencement of a case under this title after recognition of a foreign main proceeding
• 11 U.S.C. § 1532 — Rule of payment in concurrent proceedings
• O.C.G.A. § 44-13-5 — Survey of lands in different county
• W.D. Pa. LBR 6004-1 — Sale of estate property outside the ordinary course of business
• Bankr. S.D. Iowa official guidance — Instructions - Bankruptcy Forms for Individuals
• Bankr. E.D. La. official guidance — Chapter 13 Form Packet
• U.S. Bankr. Ct. D. Ariz., Choosing Your Chapter: What can Bankruptcy do for you? What will it do to you?
• 28 U.S.C. § 1930(a)(1)(A), (f)(1)
• 28 U.S.C. § 1930(a)(1)(B)
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8
• Bankruptcy Court Miscellaneous Fee Schedule, Item 9

Related

• Exemptions: what they protect
• Chapter 7
• Chapter 13
• Build your personalised roadmap
• Find your local bankruptcy court