Imagine you are a business owner operating in several companies. What happens if you, as a debtor or one of the debtor’s claimants, involve claims or assets that exist in more than one country? In the United States, the Bankruptcy Code governs the ultimate form of debt relief. A new provision—Chapter 15—specifically answers the question above and this article will help you understand the general aspects of a Chapter 15 bankruptcy.
Quick Disclaimer: Before you continue reading, you should know that this article is not intended to be legal advice and that this is a serious, complicated matter. Stephen Labiak and the Labiak Law Group specialize in this area and you are encouraged to reach out directly for your questions and concerns.
Chapter 15 Basics
Chapter 15 is designed to “provide effective mechanisms for dealing with insolvency cases involving debtors, assets, claimants, and other parties of interest involving more than one country.” This form of bankruptcy is usually an ancillary proceeding brought in another country, most often the debtor’s home country. This means that, unlike other forms of bankruptcy such as Chapter 7 or Chapter 11 (which both provide the primary relief), Chapter 15 is supplemental to procedures used in the debtor’s home country. A debtor domiciled in France, for example, might seek relief under the French equivalent of bankruptcy law, but to the extent that this debtor has creditors, assets or other interests in the United States, Chapter 15 would come into play.
Why Was Chapter 15 Created?
There are several reasons why Chapter 15 exists. One of the most important reasons is that it provides a greater sense of legal certainty for trade and investment. Knowing Chapter 15 is an option allows counselors like Stephen Labiak to provide advice to their international and multinational clients about the risks and potential outcomes that could arise if insolvency occurs and involves debtors, assets, claimants or other parties of interest that involve more than one country. Additionally, like other forms of bankruptcy, Chapter 15 provides fair and efficient relief and promotes cooperation between the United States and foreign jurisdictions.
How Can I Get Help?
Bankruptcies are complicated and complex matters—but they occur fairly regularly (in fact, according to the American Bankruptcy Institute, nearly 60,000 cases were filed in November 2018). While practitioners understand the relatively routine nature of these cases, we also know that these are never easy for the debtor and they can have stressful, adverse effects on your home and business life.
The best chance of success is to utilize experts who specialize in this area of law. California residents should consider using the Labiak Law Group to discuss their case in more detail—Labiak Law Group is a leader in this area of law and will provide help for you and your family so that you get the best possible outcome.