Foreign residents hoping to declare bankruptcy in the United States after doing business in Miami will be watching a recent Florida bankruptcy case very closely.
The Irish Independent newspaper recently reported on the efforts of a Florida-based trustee to dismiss the bankruptcy proceedings of an Irish businessman who has racked up $8 million in debts.
The businessman had originally filed for Chapter 7 bankruptcy protection last year. Under this version of bankruptcy, a Florida court would liquidate the entrepreneur’s assets and use the proceeds from this to pay off creditors.
However, the businessman has not attended recent bankruptcy court appearances. The Independent reported that he has cited visa problems for these absences.
The Florida trustee handling the man’s bankruptcy attempts in January to have the man’s bankruptcy proceedings dismissed. If this happens, the man’s creditors can then pursue individual claims against him.
The businessman’s list of debts is astounding. He owes $2.5 million to Bank of Scotland, $1.6 million to Permanent TSB and nearly $1.8 million to Ulster Bank.
Bankruptcy is designed to serve as a safety net for individuals who have run into serious financial problems. But successfully declaring for this protection requires individuals to attend court hearings and work with bankruptcy trustees in good faith.
This story shows just how important that can be. And it provides a quick lesson to anyone facing bankruptcy in the United States, whether they live in the country or abroad: Bankruptcy proceedings can be dismissed if applicants fail to show for important court appearances.
Source: Independent, “Tinkler faces motion to dismiss Florida bankruptcy proceedings,” John Mulligan, Jan. 21, 2012