What City and State Should I File for Bankruptcy In?

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Bankruptcy Basics Bankruptcy Exemptions Chapter 13 Bankruptcy Chapter 7 Bankruptcy Consumer Laws by State Questions

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Posted by: National Bankruptcy Forum

which state you file bankruptcy inLast updated March 30, 2018.

If you’re considering filing for bankruptcy, you might be confused on where you should file. Maybe you recently relocated to be closer to family or friends, were forced to move for a job or simply have ties to two locations. If you have connections to multiple places — or property in multiple cities — how do you decide which is the proper city and state for your bankruptcy case?

Filing Bankruptcy When You Have Property in More than One State

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 state’s laws will apply to your bankruptcy case. You can search for your state’s laws by checking out our Bankruptcy Consumer Laws by State section in this blog.

See also: How Exemption Laws Work Inside and Outside of Bankruptcy

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.

Consult an Experienced Bankruptcy Attorney

We’ve mentioned this a few times in this short post, but it’s worth mentioning again: you don’t want to file bankruptcy without an attorney. Most pro se cases don’t lead to a successful discharge of debt. While a bankruptcy attorney does cost money, it’s worth the peace of mind to have your debt dealt with swiftly by an expert who will be able to ensure that you follow the law and can get your debt discharged in a Chapter 7 or Chapter 13 case. He or she also will let you know which chapter is more appropriate to file under for your particularly financial situation, in addition to what bankruptcy exemptions (state or federal, if applicable) will help you keep your treasured property.

Contact National Bankruptcy Forum today to be put in touch with a local bankruptcy attorney in your area.