When a debtor files for bankruptcy the court needs a way to organize all of the debtor’s belongings so that they can easily be divided up among the creditors. Courts will do this by categorizing all of the debtor’s assets in what is called a “bankruptcy estate.”
In Japan, bankruptcy petitions can be brought by a variety of parties. The most common situation is for the debtor to file for bankruptcy personally as a way to escape payment, but this does not always happen. When a debtor refuses to file bankruptcy, it is often left to the creditor to file for bankruptcy on behalf of the debtor and submit evidence of unpaid debt as proof that the debtor can no longer make payments on debts.
The notary system in Japan is similar to the system of notarizing documents in foreign countries. Notaries prepare notarial deeds, attest to a private deed and attest to legal documents. When two parties sign an agreement in front of a notary, the notary can provide official proof that the parties signed the document and understood what they were signing.
Having a foreign judgment against a Japanese person or company entitles the debt’s owner to legally enforce the debt in Japan. However, while this is the only solution in many cases, enforcing that debt can cost money and time and it may be advisable to pursue other options before filing a lawsuit. Rather than immediately pursue legal action, usually it is beneficial to have an attorney contact the debtor and open negotiations first.