The ocean between you and your creditors does not close the courthouse door. It also does not close the collections door. That is why tens of thousands of Americans overseas are still getting sued, garnished, and hounded over debt they left behind in the States.

Filing bankruptcy while living abroad works, but it comes with traps that a stateside filer never has to think about. Here is what you actually need to know.

Who is eligible to file bankruptcy from outside the United States?

The Bankruptcy Code does not care about your zip code. It cares about a single sentence.

Section 109(a) of Title 11 says that “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.” Read that list again. Residence, domicile, business, or property. Any one of the four will do.

There is no citizenship requirement. There is no residency requirement. A U.S. citizen who has lived in Portugal for a decade qualifies.

So does a green card holder who went home to India. So does a foreign national who never lived here but has a bank account in Manhattan.

For most expats, the hook is “property in the United States.” And the courts have been remarkably generous about how little property counts.

How much U.S. property do you need?

Almost none.

The leading case is In re McTague, 198 B.R. 428 (Bankr. W.D.N.Y. 1996). The debtor was a U.S. citizen who had lived in Ontario for eleven years. Her only asset on this side of the border was a checking account in Buffalo with $194 in it.

She owed about $17,000 in U.S. credit card debt. The court held that Section 109(a) sets no minimum and refused to dismiss the case.

A Delaware bankruptcy judge later put it this way in In re Global Ocean Carriers Ltd., 251 B.R. 31 (Bankr. D. Del. 2000): the court has no discretion to decide whether Congress meant to let someone file “solely on the basis of having a dollar, a dime or a peppercorn located in the United States.” A dime is enough. A retainer sitting in your bankruptcy lawyer’s trust account is enough.

The best case for an individual expat is In re Farmer, 288 B.R. 31 (Bankr. N.D.N.Y. 2002). The debtor was an American who had lived in the Bahamas since 1993. She owned roughly $300,000 of real estate in Nassau and owed about $74,000 on U.S. credit cards.

Her only U.S. assets were two small bank accounts in upstate New York holding about $600. The court found her eligible, found venue proper, and denied the U.S. Trustee’s motion to dismiss.

That said, eligible is not the same as safe. Keep reading.

Can the court throw out your case anyway?

Yes, and this is the part expats get wrong.

Section 109(a) is a low bar. But a bankruptcy judge has other tools: dismissal for cause under Section 707(a), abstention under Section 305(a), and in Chapter 13, dismissal under Section 1307(c). Courts use those tools when a debtor manufactures a U.S. connection at the last minute.

In re Yukos Oil Co., 321 B.R. 396 (Bankr. S.D. Tex. 2005), is the cautionary tale. The Russian oil giant wired $480,000 into a Texas account opened hours before filing. The court agreed the company was technically eligible, then dismissed the case because the money “was transferred to the United States for the purpose of creating jurisdiction less than one week before the petition date.”

A Delaware court did the same thing to the Bahamian Baha Mar resort entities in In re Northshore Mainland Services, Inc., 537 B.R. 192 (Bankr. D. Del. 2015), abstaining on comity grounds even though the debtors were eligible.

Even in McTague, the judge went out of his way to note that the debtor had liquidated a $6,000 retirement account and run up debt shortly before filing, and invited the trustee to move for dismissal on those facts.

The lesson is simple. Do not open a U.S. bank account the week before you file. Do not wire money to a cousin in Bethesda so you can list it on your schedules.

Use the accounts, retirement plans, and creditor relationships you already have, and be ready to show they have been there for months or years.

Where do you file when you don’t live anywhere in the United States?

Venue is a separate question from eligibility, and expats trip over it constantly.

Under 28 U.S.C. Section 1408, you file in the district where your domicile, residence, principal place of business in the United States, or principal assets in the United States have been located for the greater part of the 180 days before filing. Note the phrase “in the United States.” Your house in Costa Rica does not count. Your $2,000 savings account at Navy Federal does.

That gives an expat two paths.

Path one is domicile. Domicile is where you live with the intent to remain, and you keep your old domicile until you establish a new one. If you took a three-year posting in Frankfurt and plan to come back to Arlington, you can argue your Virginia domicile never left. If you sold everything and retired to Chiang Mai for good, that argument is gone.

Path two is principal assets. In Farmer, the court held that the debtor’s two small New York bank accounts were her “principal assets in the United States,” so venue was proper in New York even though she spent two or three weeks a year there. Her Bahamian real estate was irrelevant to the venue statute. That is the path most expats end up using.

For the DC region, that means the District of Columbia if your largest U.S. asset sits in the District, the District of Maryland (Greenbelt or Baltimore) if it sits in Montgomery or Prince George’s County, and the Eastern District of Virginia in Alexandria if it sits in Fairfax or Arlington. The asset should have been there for at least 91 of the 180 days before you file. Plan accordingly.

Why would anyone living abroad bother filing in the United States?

Because the debt does not take a break because you moved.

American creditors have long memories and cheap lawyers. A credit card company can sue you in DC Superior Court or Fairfax Circuit Court while you are in Dubai, get a default judgment, and sit on it.

In the District, D.C. Code Section 12-303 stops the statute of limitations from running while a resident defendant is out of the District. Maryland has a similar rule at Courts and Judicial Proceedings Section 5-205. Your absence does not run out the clock. It freezes it.

Here are the reasons expats actually call me.

You plan to come home. The judgment, the credit report, and the collectors will all be waiting at the arrivals gate. A discharge clears the runway before you land.

You still have U.S. assets. A judgment creditor can garnish a U.S. bank account, levy on U.S. real estate, and attach an inheritance that comes through a U.S. probate court. Your foreign paycheck is out of reach. Your Chase account is not.

You owe the IRS. The IRS can certify a “seriously delinquent tax debt” to the State Department, which can then deny or revoke your passport under 26 U.S.C. Section 7345. For 2026 the threshold is $66,000. For an expat, a revoked passport is not an inconvenience. It is a crisis.

The IRS will not certify a taxpayer who is in bankruptcy, and it will reverse an existing certification once you file.

Someone co-signed for you. Your mother in Silver Spring is still on the hook for the car loan you stopped paying from Seoul. Chapter 13 protects co-signers on consumer debts through the co-debtor stay in Section 1301. Chapter 7 does not.

You want a clean record. A U.S. bankruptcy stays on your U.S. credit report for up to ten years. A string of charge-offs and collections stays for seven years each, and every new collection account starts its own clock. A discharge sets one date and lets the clock actually run.

What are the reasons not to file bankruptcy while living abroad?

Here is the part the expat forums leave out.

Your foreign creditors may not be bound. A U.S. discharge is an injunction issued by a U.S. court against creditors over whom that court has jurisdiction. A bank in London that never did business with you here, never filed a claim, and never received notice may simply ignore it.

England is the clearest example. Under the rule in Antony Gibbs and Sons v. La Societe Industrielle et Commerciale des Metaux (1890) 25 QBD 399, reaffirmed by the Court of Appeal in Bakhshiyeva v. Sberbank of Russia [2018] EWCA Civ 2802, a foreign bankruptcy does not discharge a debt governed by English law unless the creditor submitted to that proceeding. Your Barclays overdraft survives your Chapter 7, at least in England.

Canadian courts are more flexible and will often recognize a U.S. case on comity grounds, but recognition is discretionary. The European Union leaves it to each member state.

The flip side matters too. A foreign creditor that files a proof of claim in your U.S. case submits to the court and is bound. In In re Avianca Holdings S.A. (Bankr. S.D.N.Y. Jan. 27, 2023), Judge Glenn held foreign plaintiffs in contempt for pursuing lawsuits abroad after they had filed claims in the U.S. case.

Your foreign assets are on the table. Section 541(a) sweeps into the bankruptcy estate all your property “wherever located and by whomever held.” Your flat in Valencia, your Australian superannuation, and your account at Deutsche Bank are all property of the estate.

A Chapter 7 trustee cannot fly to Spain and change the locks. But the trustee can order you to sell the flat and turn over the proceeds, and you are personally subject to the court’s jurisdiction. Refuse, and you lose your discharge under Section 727(a)(6).

Hide the asset, and it gets worse. In In re Urbonas (Bankr. N.D. Ill. Sept. 30, 2015), the debtor left a Lithuanian bank account holding about $2,500 and a Lithuanian pension of about $207 a month off his schedules. The court denied his discharge entirely under Sections 727(a)(2) and (a)(4).

Two thousand five hundred dollars. In 2024, a Texas couple who concealed properties and bank accounts in Dubai and Pakistan waived their discharge after the U.S. Trustee sued them.

Your foreign pension is probably not exempt. The retirement exemptions in Sections 522(b)(3)(C) and 522(d)(12) protect only accounts that are tax-exempt under specific sections of the Internal Revenue Code. A Canadian RRSP, a UK pension, and an Australian super fund are not on that list.

In Green v. Leibowitz (N.D. Ill. 2023), affirmed by the Seventh Circuit in 2024, a debtor lost about $72,000 in Canadian retirement funds because the plan was not “created or organized in the United States.” A 401(k) from your old job at Booz Allen is fully protected. Your foreign equivalent is not.

The paperwork is heavier. You will disclose every foreign account, and the trustee will compare your schedules against your FBAR and Form 8938 filings. If you have been skipping those, expect questions.

What exemptions can an expat use?

This is where living abroad can actually help you, especially if your last U.S. address was in the District.

Exemptions are the property you keep. Section 522(b)(3)(A) says you use the exemption law of the state where you were domiciled for the 730 days before filing. If you were not domiciled in one state for that whole period, you look back to where you lived for the 180 days before that two-year window.

A foreign country is not a “state” under the Code. So if you have been in Singapore for three years, you get pushed back to wherever you lived before you left.

And if you have been gone long enough that no state fits, or your old state limits its exemptions to current residents, a special clause at the end of Section 522(b)(3) kicks in and lets you use the federal exemptions in Section 522(d). One court called that clause a provision that “no one other than people who had been domiciled in foreign countries would need.” In re Long, 470 B.R. 186, 190 (D. Kan. 2012).

The Fourth Circuit, which covers Maryland and Virginia, decided how this works in Sheehan v. Ash, 889 F.3d 171 (4th Cir. 2018). You look at the old state’s exemption statute and ask whether it limits itself to residents or in-state property. If it does, the exemption is gone, and the federal fallback opens up.

For the DC region, that plays out three ways.

Virginia limits its exemptions to a “householder,” defined in Va. Code Section 34-1 as a resident of Virginia. Move to Berlin, and you are no longer a householder. The federal exemptions become available.

Maryland is messier. The $5,000 wildcard and the homestead exemption in Courts and Judicial Proceedings Section 11-504(f) are limited to a debtor “domiciled in this State,” but other Maryland exemptions have no domicile language. Expect a fight.

The District of Columbia never opted out of the federal exemptions. If DC is your lookback state, you get to choose between DC exemptions and federal exemptions, no fight required.

For cases filed through March 31, 2028, the federal exemptions protect $31,575 of home equity, $5,025 in a vehicle, and a wildcard of $1,675 plus up to $15,800 of unused homestead. That wildcard is what makes the federal scheme so useful for an expat with no U.S. house but a few U.S. accounts to protect.

Does foreign income count on the means test?

Every dollar, euro, and dirham.

Current monthly income under Section 101(10A) is your average income “from all sources” over the six months before filing. Your salary from a Dutch employer counts even though the IRS lets you exclude most of it on Form 2555. The means test is not a tax concept.

Convert the income to dollars at the exchange rate for each month and report it.

Two open questions follow. First, the means test compares your income to the median for “the state in which you live.” There is no median family income table for Thailand. Most practitioners use the median for the state where the case is filed, and I disclose that choice on the form.

Second, the IRS living expense standards that drive the second half of the means test have no foreign locality. If your rent in Tokyo runs twice what the Fairfax County standard allows, you may have to argue it as a special circumstance under Section 707(b)(2)(B). It can be done. Bring receipts.

Can you do Chapter 13 from overseas?

Yes, if your income is stable.

Chapter 13 requires “regular income,” which Section 101(30) defines as income stable enough to fund a plan. Nothing says it has to be earned in the United States. A steady foreign paycheck or a pension qualifies. Freelance income paid in three currencies from clients on two continents is a harder sell.

You also have to fit under the debt limits. For cases filed after April 1, 2025, that means less than $526,700 in unsecured debt and less than $1,580,125 in secured debt.

And you have to make a plan payment to a trustee in Greenbelt, Alexandria, or DC every month for three to five years from wherever you are. Set up the U.S. account and the automatic transfer before you file, not after.

Do you have to come back for court?

Almost never.

Every district in the country now runs the Section 341 meeting of creditors, the one hearing every debtor attends, by Zoom. You will send your photo ID and proof of Social Security number to the trustee ahead of the meeting. A U.S. passport works. Then you log in from your kitchen in Prague and answer questions under oath for ten minutes.

The U.S. Trustee reserves the right to require any debtor to appear in person. That is rare for a debtor who has been candid and organized. Time zones are the real problem. A 10:00 a.m. meeting in Alexandria is 1:00 a.m. in Manila.

You can complete the credit counseling course required by Section 109(h) online or by phone through any approved agency. There is no exception for living abroad, and none is needed.

When should you file?

Before the U.S. asset you need for venue disappears, and before a creditor reaches it.

The timing pieces stack up like this. Your U.S. account or retainer needs to sit in the filing district for the greater part of 180 days. Your income over the prior six months sets the means test.

Your tax returns need to be current: Section 521(e)(2) requires your most recent federal return, and Section 1308 requires the last four years in a Chapter 13. Expats get an automatic extension to June 15, but an unfiled return is an unfiled return, and the trustee can hold your meeting open until you produce it.

If a passport certification letter has already arrived from the IRS, the calculus changes. Call me before the State Department acts.

What does a bankruptcy from abroad actually look like?

Here is the pattern that works.

You keep the U.S. accounts you already have and stop moving money around. You gather three years of foreign bank statements, your FBAR filings, your lease or deed abroad, and your foreign pay records. You convert everything to dollars and disclose all of it, down to the pension you can’t touch until 2040.

You file in the district where your principal U.S. asset has been sitting. You attend the 341 by Zoom and get your discharge four months later.

Your U.S. creditors are done. Your foreign creditors are a separate conversation, and I’ll tell you before you file which ones the discharge is likely to reach.

Talk to someone who has filed these cases

I handle these cases from my office on Connecticut Avenue, and I know the local rules in the District of Columbia, the District of Maryland, and the Eastern District of Virginia. I’ll run the numbers with you, tell you which court fits, and tell you plainly if a U.S. filing is not worth it from where you sit.

The consultation is free, confidential, and by phone or video from anywhere. Call (202) 448-5136 or reach me through lee-legal.com.

Don’t wait for the judgment to find you.