“Kathleen, unfortunately, I’m in the midst of a Chapter 7 bankruptcy and really need to restart my financial life.
“I have aspirations to obtain residency in Panama.
“Will this personal situation affect potential residency?”
–Shaun P., United States
No. You’ll need to produce an FBI report showing a clean police record, but no financial check is required as part of the residency visa application process in Panama (or anywhere that I know of).
Residency and Banking in Panama After a Bankruptcy
“Kathleen, I have been serious about moving to Panama for several years but suffered a setback. Complications following a simple surgery meant nine weeks in the hospital. I’m fine now, but due to medical bills I lost my home, my car, and all my savings. I had to file bankruptcy, which should be complete in next couple of months. Before this debacle my credit rating was 795 out of 800.
“I still plan to move to Panama sometime next spring. My monthly income will be just Social Security and a small pension, about US$2,500.
“What I’m wondering is whether the bankruptcy will make it difficult or impossible to make the move? That is, can I get a visa, bank account, and so forth? Should I postpone the move for a period of time?
“I don’t remember when I first subscribed to your newsletters, but it’s been a long time, so I have a pretty massive file on Panama. I know what I’m doing and am studying Spanish like crazy. I did spend two weeks in Panama in 2006 and fell in love.”
–Howard P., United States
The bankruptcy won’t have any effect on your ability to establish residency or open a bank account in Panama. You will need a bank reference from the United States to open an account in Panama, but that letter only needs to state that you’ve had an account at the bank for X years and the account is in good standing.
The cost of getting a pensionado visa in Panama is US$2,500 to US$3,000 between government fees and attorney cost. It’s not an insignificant expense. If you don’t have that much of a cash nest egg and are able to save something each month, then, yes, postponing your move a few months might be a good idea. Otherwise, I always recommend making a move when you know where you want to go. The most common complaint I hear among expats and foreign retirees is that they wish they’d made the move sooner.