Consultation for international Bankruptcy
We are able to assist with the following cases:
- Lay-off procedures
- Filing bankruptcy for English speakers
- Filing bankruptcy for international businesses
- Filing Civil Rehabilitation procedures to maintain ownership of your home with a bank loan
- Changing visa status after lay-off
- Participation in international bankruptcy procedures
Need Help With A Legal Problem?
We, Nagoya International Law Office, welcome cases for bankruptcy or Civil Rehabilitation, and cases relating to bankruptcy procedures. We are able to help in numerous cases, including the following:
- I am a US citizen living in Japan. I am managing an English school, but the number of students have decreased and I can no longer afford staff salaries. How do I proceed with employee lay-off?
- My company is exporting used cars and car parts overseas, but the orders are decreasing and we cannot clear bank loans. Can you explain bankruptcy procedures in English?
- I have had a permanent visa status for a long time and have built my home, but my income has lowered and I cannot afford my house loan. Are there procedures available in order for me to keep my home? I am working for a company with the Trainee visa status, but the company filed bankruptcy. What happens to my visa status?
Online Legal Consultation is Available
In addition to in-person legal consultations at our office, we do provide legal consultations via video chat on the following services: Zoom, LINE, and Skype. Contact us if you need to use a different video service. All video based legal consultations require payment in advance.
Procedure of Tasks
Arrangement for debt troubles Information
In Japan we have several types of arrangements for debt repayment. These arrangements can be used not only by business entities but also individuals, including foreign nationals.
1, Debt-Workout:
Debt-workout is reducing the amount of debt or extending the terms of payments by negotiation with creditors.
This is useful for individuals with a stable income (or meet the income threshold) who have debts for consumer
finances, and/or credit card loans. Business entities can also use it, in the case most of the business’ loans
are from banks or governmental organizations. This procedure takes several months and sometimes negotiation will
be held in Summary Courts.
2, Civil Rehabilitation
Civil rehabilitation is reducing the amount of debt and extending the terms of payments by court procedure. It
is often used for business entities which are experiencing temporary issues with finances, but the issues are
expected to be resolved in the near future. It is also used for individuals who would like to keep their home
with a bank loan. This procedure takes approximately 6-12 months to obtain via court approval.
3, Bankruptcy
Bankruptcy is to clean-up debts and assets, and obtain debt-relief by court procedure. For individuals, it is
used in the case for repaying debts and loans by forfeiting all assets, restarting assets from zero. For
business entities, it is used in the case business has deteriorated and there is no-expectation for
rehabilitation. This procedure takes around 6 months for a simple case. It usually takes 12 months or more for
business entity cases and complicated cases, in which trustees in bankruptcy are appointed by the court.
The court procedure costs and the attorney’s fee vary depending on the amount of debts, the number of creditors,
and the types and amount of assets owned by the applicant. In the case the trustee in bankruptcy is appointed by
the court, the applicant has to pay a certain amount of deposit. In the case a business entity files bankruptcy,
the business owner is often a joint obligator for business loans. In this case, the business owner also files
bankruptcy together with the business entity.
The following are examples of cost and fees to apply for bankruptcy, but are just examples. If you have an
actual case, please consult us. The costs and fees for foreign nationals are not different from domestic cases,
but in the cases of subsidiaries abroad, creditors overseas, or visa issues, additional fees will be necessary.
Example 1: An Individual Files Bankruptcy
5 creditors of consumer finances and credit card companies, total debts are 4,000,000 yen and no real estate
Initial fee 330,000 yen and actual expense 55,000 yen.
Example 2: An Individual Files Civil Rehabilitation
10 creditors of consumer finances and credit card companies, total debts are 5,000,000 yen and own a house with
15,000,000 yen bank loan
Initial fee 440,000 yen, actual expense 55,000 yen, and deposit to the court 220,000 yen (if
rehabilitation supervisor is appointed by the court)
Example 3: An SME Company and the Owner File Bankruptcy
30 creditors of banks and customers, total debts are 50,000,000 yen, rent office, and the owner files bankruptcy
together with the company without owned house
Initial fee for the company 660,000 yen, actual expense 110,000 yen, and deposit to the court 660,000 yen.
Initial fee for the business owner 440,000 yen, actual expense 55,000 yen, and deposit to the court
220,000 yen.
Example 4: An Enterprise and the Owner File Bankruptcy
100 creditors of banks and customers, total debts are 500,000,000 yen, own factories, and the owner files
bankruptcy together with the company with an owned house with bank loan.
Initial fee for the company 2,200,000 yen, actual expense 220,000 yen, and deposit to the court 1,100,000
yen. Initial fee for the business owner 660,000 yen, actual expense 110,000 yen, and deposit to the court
440,000 yen.
Our Service
We, Nagoya International Law Office, represent any kind of debt arrangement procedure. We have extensive experience in regard to international debt-workout, civil rehabilitation, and bankruptcy, and those for foreign nationals.
Frequent Q&A
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Q. |
What is the “Deposit to the court?” |
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A. |
“Deposit to the court” is the deposit which the court requires from the bankruptcy applicant. The deposit is mainly used for the trustee in bankruptcy. The trustee in bankruptcy sells the applicant’s assets to convert into cash to distribute to the creditors. The trustee in bankruptcy investigates if the applicant can be relieved from his/her debts. Please note that the deposit will not return to the applicant. |
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Q. |
Can I be relieved from my debts if I file bankruptcy? |
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A. |
Upon deciding to file bankruptcy, you are restricted to pay arrears. After you receive the court approval of the debt relief, you are relieved from your debts. However, you must continue to pay certain debts such as tax, national pension, and national health insurance. |
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Q. |
If I cannot afford the cost and fee for bankruptcy application, does any organization help me? |
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A. |
If you are an individual and your income combined with your spouse is approximately 300,000 yen per month, you will be able to use a loan from Legal Aid (hou-terasu). Loans are repaid at 10,000 yen per month to the legal aid. If you own a company, there is no legal aid help. However, we can help you to prepare the costs and the fees from your business. |
Lay-off of Employees
Resolutions
You may lay-off your employees when the following requirements are met. We, Nagoya International Law Office can evaluate your lay-off plan and help with lay-off procedures.
Information
In the case of laying-off employees, you must meet the following four requirements.
1, Necessity for Lay-off
You must prove your business has a financial crisis. This requirement is not strict, and case law allows a
rather broad discretion of company directors.
2, Effort to Avoid Lay-off
You must make efforts to avoid lay-off before you lay-off your employees. Examples of efforts are: reducing
directors’ remuneration, stop recruitment, advertise voluntary retirement, change job tasks, tele-work, and
suspension from work. Lay-off should be the last resort.
3, Reasonable Selection
You must meet reasonable standards to select who you lay-off, and the actual selection has to be reasonable. For
example, standards can be based on work performance, contribution to the company, age, family members, etc. The
results of the selection should also be reasonable. If you select only union members, it cannot be reasonable.
4, Appropriate Procedure
You must explain the company situation, necessity of lay-off, outline or scheme of lay-off to your employees or
union, and have discussions with employees. This requirement is crucial. Many lay-off cases have been found
illegal because those lay-offs have not implemented these processes.
In addition to the above requirements, you must provide notice one month prior to lay-off or pay one-month
salary for immediate lay-off.
Our Service
We, Nagoya International Law Office, hear and understand your company’s situation. We will help you make a plan for lay-off and assist your actions. We also represent in discussions with your employees and unions.
Frequent Q&A
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Q. |
Can Coronavirus be a reasonable reason for lay-off? |
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A. |
It depends on your business. If your business is a restaurant and the sales have decreased 20% of the previous year’s income, coronavirus can be a reasonable reason for lay-off. If your business is an English school and the lesson format has switched to video chat, coronavirus may not be a reasonable reason by itself. |
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Q. |
What happens if I lay-off my staff without meeting the four requirements? |
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A. |
The employee will have claim to an employee’s position and unpaid salaries. The employee may file a labor adjudication procedure to the court, in which the business must pay a large amount of compensation. |
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Q. |
Do I have to pay unpaid salaries for my personal business if I filed bankruptcy? |
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A. |
You must pay several unrelieved claims, even though you filed bankruptcy. This includes unpaid salary for your employee, tax, national pension and national health insurance. |
Bankruptcy for Foreign Nationals in Japan
Resolutions
You can apply to debt-workout, civil rehabilitation, or bankruptcy the same as Japanese citizens. We, Nagoya International Law Office, can handle your case in English.
Information
Bankruptcy procedures and civil rehabilitation procedures vary in each legal system, so you should correctly
understand the procedure, advantages and disadvantages before applying to the procedure.
In case you are a foreign national, you should take into consideration your visa status after filing
bankruptcy
or civil rehabilitation. If your visa status is a permanent resident or spouse of Japanese, generally bankruptcy
does not affect your visa status. If your visa status is a
working visa, such as business manager visa or
Engineer/Specialist in humanities/International services, there are
requirements that you can afford your
lifestyle without assistance, but it does not mean you cannot renew your visa status. If your visa status is
long term, it depends on what type of visa you have, so it is best to consult with us.
Our Service
We, Nagoya International Law Office, represent your bankruptcy procedure. We will try to maintain your visa status.
Frequent Q&A
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Q. |
If I file bankruptcy, what happens to my assets overseas? |
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A. |
Legally, your assets overseas fall under the control of the trustee in bankruptcy, however the trustee cannot sell/move your assets overseas. The trustee often asks you to sell-out the assets and transfer the proceeds from the sale to the trustee’s account. |
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Q. |
What happens if I leave Japan without paying my debt? |
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A. |
To leave Japan without paying debt violates your loan contracts, but it is not easy to enforce the loan contracts abroad. Most debts become extinct after 5 years from the final payment according to the statute of limitation. |
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Q. |
Can I enter into Japan again if I abandoned my debts when I left Japan? |
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A. |
Your debts do not restrict your re-entrance into Japan, because a clean slate of debts is not a requirement to obtain a visa. However, your creditors restart claim to your arrears after you come back to Japan. |
Bankruptcy for International Business
Resolutions
You can file bankruptcy if you forfeit your business. You do not have to pay any debt if you file bankruptcy, and you will be relieved from your debts after completing bankruptcy procedures.
Information
When you file bankruptcy for your company, you have to report all creditors’ contact addresses to the court,
including creditors overseas. The court then sends the bankruptcy notice to all creditors including creditors
overseas. The court sometimes requests you to translate court documents to send those creditors.
However, other procedures are the same as domestic bankruptcy. When the bankruptcy procedure is completed, the
company will be relieved from debts. You will also be relieved from your debts if you file bankruptcy together
with your company.
Our Service
We, Nagoya International Law Office, represent you and your company to file bankruptcy. We can correspond to all creditors, and you do not have to communicate with any customers by yourself.
Frequent Q&A
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Q. |
Can foreign creditors participate in distributions in bankruptcy procedure? |
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A. |
Foreign creditors can participate in distributions in Bankruptcy procedure. If you request to transfer the distribution to a foreign bank account, exchange rates vary and the bank fees will be expensive. |
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Q. |
Does debt relief affect foreign creditors? |
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A. |
When you acquire the decision for debt relief by the court, you are relieved from your debts except certain debts such as tax, national pension, and national health insurance. The decision affects foreign creditors in Japan and they cannot claim their credits in Japan. However, the decision does not affect overseas, so if you get assets abroad after your bankruptcy, the foreign creditors will be able to seize your assets overseas. |
Visa status After Employer Filed Bankruptcy
Resolutions
The effect is depending on your visa status. We, Nagoya International Law Office, will advise you how to change or extend your visa status according to your situation.
Information
If your visa status is “Permanent,” “Long term,” “Spouse of Japanese,” or “Spouse of Permanent Resident,”
lay-off itself does not affect your visa status. When you apply for renewal of your visa status, you have to
prove you have certain income to afford your family.
However, if your unemployment period is short, it will not be a significant problem.
If your visa status is “Engineer/Specialist in Humanities/international Services,” “Skilled Labor”, or
“Specified Skilled Labor” (so-called “Working visa”), you have to seek new employment which matches your visa
status by the next visa renewal. You can apply for “Unemployment Allowance (Hello Work Payment)” for the
unemployed period, but please mind your visa will be canceled if you are not employed for 3 months continuously.
If your visa status is “Technical Intern Trainee”, you generally cannot change your training place. If your
trainer (employer) is bankrupt, you should return to your country according to the general rule. In the case
your “Organization for Technical Intern Training (OTIT)” supervising your training helps you, you can change
your training place (employer) with the permission by immigration. However, this approval procedure sometimes
takes a long time and you cannot have training (income) for the waiting period.
Our Service
We, Nagoya International Law Office, will help to change or extend your visa status. If you cannot find a new employer within the timeframe, we will negotiate the job hunting period with the immigration office.
Frequent Q&A
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Q. |
If I was dismissed from my employer and cannot find a new job until my visa renewal period, should I return to my country? |
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A. |
You still have a chance to get a designated activity visa for job hunting for a short time. Please contact us. |
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Q. |
My OTIT does not introduce me to new training places, even though the previous training place has bankrupted. Can I find a new training place by myself? |
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A. |
To change OTIT is very difficult, but it is not impossible. Please contact us. |
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Q. |
Can foreign nationals receive Unemployment Allowance (Hello Work Payment)? |
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A. |
You can apply and receive Unemployment Allowance if you satisfy the requirement; basically 12 months’ work in the last 2 years. |