Asked in Bankruptcy for Illinois

Q: I want to declare bankruptcy do I need to be in the country to file it?

I'm currently not in USA but my business is still running. I'm facing hard time to continue and want to shutdown and declare bankruptcy. I'm not a USA citizen and I'm an investor. I was told that I need to be physically present in the States to file bankruptcy. I also need to know what are the steps please.

Thanks you

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1 Lawyer Answer
Mazyar M. Hedayat
Mazyar M. Hedayat
  • Bankruptcy Lawyer
  • Romeoville, IL
  • Licensed in Illinois

A: Your question has several parts to it, so I will attempt to answer them in the order presented.

(1) To file Bankruptcy in the United States the Court must have jurisdiction over you (personal jurisdiction) and over your debts (subject matter jurisdiction). Another way to look at it is that you, your assets, or both, must be present - and be a legal resident of the State - to file there. While Bankruptcy is a Federal matter, jurisdiction lies with the Bankruptcy Court with authority for your State and County.

(2) The steps involved in filing Bankruptcy depend on the type of relief sought (liquidation vs. reorganization) as well as the value of your assets - which may require you to file one type of case over another. In the broadest sense, the steps are as follows:

Chapter 7 Liquidation: Court-supervised marshalling of assets by a trustee who sells them and pays off creditors. Most Chapter 7 cases are "no-asset" so creditors holding unsecured claims do not receive distributions. If a debtor is an individual they receive a discharge releasing them from personal liability for most (but not all) debts.

Chapter 13 Reorganization: Designed for individuals with a regular source of income. Chapter 13 can be preferable to chapter 7 because it allows debtors to hold onto their house, car, etc. in exchange for the debtor's plan to repay creditors at a set % over time (3 to 5 years). Chapter 13 is also used by consumer debtors who do not qualify for Chapter 7 relief under the means test.

The cost of bankruptcy varies by region, with Chapter 13 costing several times more than Chapter 7 and being much more involved. If you wish to find out specifics I recommend navigating to the website for the Bankruptcy Court for Wisconsin.

I hope that this information was helpful, and recommend that you also consult an Attorney via the Rocket Lawyer On Call program. Learn more at

Best of luck.

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