Canadian Citizen With Florida Property

A Canadian citizen ties to Florida inquired about filing bankruptcy in Florida . The caller owned a home in Canada with significant equity. He also owned a home in Florida with less equity, and he owned and operated a Florida business. He had guaranteed large amounts of business debt. The business is having financial difficult. The caller anticipates significant personal unsecured debt from the inevitable business failure

The caller could , if he wanted, file in Florida if he had a residence and property here. I suggested that the caller not file bankruptcy in Florida as he would face several problems. First, bankruptcy courts have jurisdiction over the debtor’s property outside the United States . Therefore, the trustee could seize and liquidate his valuable property in Canada (unless it was protected from creditors under Canadian law). The called stated he had not yet received a "green card" to permanently reside in the U.S. Under Florida law, he could not move into the Florida property as a homestead until he got the green card.

I suggested that if his business failed and he was sued personally that he consider abandoning the Florida property and move back to Canada. First, it will be more difficult for the trade creditors of a Florida business to find and sue this person in Canada. There may be ways to protect the Canadian home under Canadian law, but there is definitely no protection in Florida bankruptcy court. For people with assets, bankruptcy should be the last resort. Many people think bankruptcy court is friendly for debtors; in fact, in most cases where debtor’s have some assets the creditors as a whole do much better in bankruptcy court than they do trying to find and levy assets otherwise.

posted by Jonathan Alper, bankruptcy and asset protection attorney, Orlando, Florida