What City and State Should I File for Bankruptcy In?


Posted On: March 12, 2014


Bankruptcy Basics Chapter 13 Bankruptcy Chapter 7 Bankruptcy Questions


Posted by: John O'Connor

Proper city for a bankruptcy filing
Where should I file my bankruptcy?

What City and State Should I Look For a Bankruptcy Attorney In?

Maybe you have recently relocated to be closer to family or friends, were forced to move for a job or, simply have ties to two locations. To make matters a little more uncomfortable, you’re in financial distress and are considering hiring a bankruptcy lawyer. If you have connections to multiple places, how do you decide which is the proper city and state for your bankruptcy case?

When You Have Ties to Multiple Places…

This is a common question that arises not only in the context of a move, but also when investment property is plaguing a family financially or your business operates in one state but you live in another. For example, many people believe that, if you’re filing bankruptcy to get rid of a house, you must file the case in the city where the home is located. This is not necessarily true. The proper venue for your bankruptcy case will usually be the city that you are currently living in. The bankruptcy code is a body of federal law, which means that no matter where you file for bankruptcy, you will be entering the federal district court system. Under Federal venue law, a bankruptcy case can be filed in the district court for the city:

(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement. . .; or

(2) in which there is pending a case under title 11 concerning such person’s affiliate, general partner, or partnership.

To translate this provision into plain English, the proper venue for your bankruptcy case is your current home city, or the place where the majority of your assets are located. If you’ve recently moved, your new residence is the appropriate place to file for bankruptcy if you’ve been there for at least 180 days. As a practical matter though, if you’ve recently relocated from a great distance, it may make sense to delay filing for bankruptcy until you’ve been able to establish yourself for a few months and get a feel for your new surroundings. Of course, there are situations where a bankruptcy needs to be filed in relatively quick fashion, so it is always best to consult an attorney to discuss the particularities of your individual case.

What Laws Will Apply to My Bankruptcy Case?

The laws that apply to your bankruptcy case will be determined by your length of residency at your current address. Exemption laws are complex and should be discussed in detail with a competent bankruptcy attorney, however, as a general rule, your current state’s laws will apply if you’ve lived there for the last 730 days. If you lived (vacations don’t count) in another location in the last 730 days, that states laws will apply to your bankruptcy case.

Can I discharge out-of-state real estate obligations?

Yes, you can surrender out of state property by filing bankruptcy in the city where you currently live. The bankruptcy  discharge applies to your creditors regardless of their location within the 50 states. For example, you may have borrowed money from a bank in the state of Florida. Filing for bankruptcy in California will discharge the debts you incurred while in Florida.

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