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CalAttorney2
CalAttorney2, Attorney
Category: Bankruptcy Law
Satisfied Customers: 10238
Experience:  Civil litigation attorney for individuals and businesses.
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I had a mediation and agreed to pay my debtor but ran into

Customer Question

I had a mediation and agreed to pay my debtor but ran into financial difficulties.
Can I file a bankruptcy since I could not pay and I do not reside in the USA
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  CalAttorney2 replied 1 year ago.

Bankruptcy can eliminate settlement obligations.

However, if you are not living in the U.S. filing bankruptcy can be complicated (are you still a U.S. Citizen?)

Customer: replied 1 year ago.
I was never a U.S citizen. I only purchased a condo for let and gave it to a quack to manage for me and she dragged me into debt and dragged me to court claiming that I owe him money that she had spent on the apartment.
I managed to go to mediation and agreed to pay half of what she was asking for but unfortunately I was running into more debt with the apart and I sold it to cut my losses but still have some outstanding amount to pay. That is why I am looking at bankruptcy option.
I am a British citizen.
What are my options please
Thank you.
Expert:  CalAttorney2 replied 1 year ago.

Unfortunately, this issue is a little bit complicated by the international issue, but it is not impossible.

You being a British citizen, living outside the U.S. is going to make it very difficult for your U.S. Creditors to collect from you. They will have to actually get a judgment against you in the U.S. for breach of contract (sue you on the settlement agreement, or get an entry of judgment if you stipulated to a judgment as part of your settlement (pretty common)). Then, they will have to take that U.S. Judgment to the U.K. and get it enforced as a "foreign judgment" (this is complicated enough going from one U.S. State to another, it is very difficult going from one country to another, most creditors do not bother unless the amount is very high, and odds of collection on the debt are very great).

So, you can simply ignore the issue in the U.S. unless you have other assets here in the U.S., in which case you are going to need to worry about settling the debt here.

If the creditor actually goes to the trouble of naturalizing a U.S. judgment in the U.K. you can then explore options of bankruptcy in the U.K. (which is an area of law I am not qualified to instruct you on).

While it is possible for non-U.S. citizens to take advantage of U.S. bankruptcy courts, they must be residing in the U.S. to do so.

Customer: replied 1 year ago.
Thank you for responding.
Because I have defaulted in the mediation, The attorney has dragged me back to the court.
The total amount was $10,000.00 but was negotiated to $5,000.00 and I think I have paid up to $3,000.00 and left with 2,000.00.
Can I renegotiate with my creditor for a another settlement outside the court.
I would have not bothered to trouble myself to pay but my wife is concerned about it, although we do not have any other investment in the US.
We just want to remain nice but the other party are not willing to let go.
Is there anything you could do to help?
Thanks
Malcolm.
Expert:  CalAttorney2 replied 1 year ago.

It is always possible to renegotiate (neither side really benefits from going through litigation to force the issue).

I cannot represent you or advise you unfortunately (this forum is for "general legal information" only, and I cannot solicit or accept clients through the forum (it is one of the clauses I must agree to when acting as an expert on this site)).

You can find local attorneys using the State and local Bar Association directories, or private directories such as www.AVVO.com; www.FindLaw.com; or www.Martindale.com (I personally find www.AVVO.com to be the most user friendly).

For the amount of money you are talking about, I really don't see a creditor trying to pursue this debt overseas, it simply isn't going to be cost effective. (It is possible, just not cost effective from a cost/benefit analysis, my assumption would be that they are posturing to try to get you to pay voluntarily).

Customer: replied 1 year ago.
Dear Mr William
Thank you for enlightenments, however may I ask you to explain some of the legal terms you have used.
"Get an entry of judgement."
"Get it enforced as a foreign judgement."
"Naturalising US judgement in the UK."
Explanation of those terms will further reinforce my understanding of all you have said.
Thanks
Malcolm
Expert:  CalAttorney2 replied 1 year ago.
  • "entry of judgment" - simply means get a judgment against you. Either by trial, by default, or by entry after stipulation (through your settlement agreement) - whatever way they end up doing this.
  • "enforced as a foreign judgment" - you cannot simply take a judgment from one US State and enforce it in another US State, or another Country. You must first take your original judgment and go to court in the jurisdiction where you wish to enforce it, and make a motion to have the first judgment enforced (what we would call it between two states) a "sister state judgment."
  • "naturalizing the US judgment in the UK" - this is the same as above - your creditor simply would need to take the US judgment to a UK court and have a UK court give a court order allowing them to enforce the judgment in the UK. (It sounds a lot easier than it is, and for debts of the size we are discussing it is not really economically viable - I cannot promise you it won't happen, but in general, most creditors won't go to the trouble).
Customer: replied 1 year ago.
Thank you Mr Williams for bearing with me.
If a judgement is taken against me in the US, how does it affect me if I go or my family goes to the US on holiday or if I want to transact any other form of business. Would the judgement be registered with credit reference agencies in the US? and would I be informed of such by my creditors. Would I or members of my family be looked at as criminals?
Thanks
Malcolm.
Expert:  CalAttorney2 replied 1 year ago.
  • Travel to the US would be unaffected (you wouldn't be here long enough for any creditors to actually levy on your personal property). I guess it would be theoretically possible for a creditor to levy on a priceless diamond that you happen to bring with you to show your family on vacation - but for all intents and purposes, this isn't an issue.
  • Doing business in the US could be more of an issue. If you are taking ownership in a US business, that ownership interest would be subject to collection, or if you owned other property in the US, the creditor could levy on that. (But again, the amount you are talking about is really minimal - a creditor would have to be very diligent to catch this kind of money, for $10k, it isn't going to happen as a practical matter).
  • A bad debt is not a criminal matter (we do not use the criminal process to deal with debt in the US).
  • Your family is entirely unaffected by your bad debt.

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