When you file for bankruptcy, where you’ve lived for the past 180 days, and the location of your assets, determine where you'll file your bankruptcy petition. To determine the state law you’ll use to protect or "exempt' your property, you’ll look at where you’ve lived during the prior three years. This rule prevents you from shopping around for the state that’s most advantageous to you.
Where Can I File My Bankruptcy Case?
The first test helps you decide if you have the right to file for Chapter 7 or Chapter 13 in a particular state. Here are the bankruptcy code rules that limit where you can file (you must meet one of the tests). You’ll need to look at the following:
- where you lived or maintained a permanent residence (domicile) for the 180 days before you file
- where you had your principal assets or your principal place of business for the 180 days before you file, or
- where you were domiciled, maintained your principal place of business, or kept your principal assets for the greater portion of the 180 days before filing.
Example. During the 180 days before Troy filed bankruptcy, he lived in New York for 100 days, then in Pennsylvania for 80 days. For ten years, he has owned a vacation home at the Jersey Shore and a consulting business with an office in Connecticut. Applying the rules in the bankruptcy code, Troy could file in Connecticut, where his business is located, in New Jersey where he owns property, or in New York, where he lived for most of the previous 180 days. Of all those locations, the only place he can’t file is Pennsylvania, where he currently lives, unless he is willing to wait a few more weeks.
Remember that this test doesn’t determine the exemptions you’ll be entitled to use to protect your property—only the actual location of your filing.
What Are Bankruptcy Exemptions?
In every bankruptcy case, the "debtor" or person filing for bankruptcy, can protect property needed to get a fresh start using laws called exemptions. A typical exemption list will include basic household goods, clothing, "tools of the trade" or items you need in your profession, necessary medical equipment, a car, real estate, a retirement fund, and other types of property.
You’ll find federal bankruptcy exemptions in the bankruptcy code. Each state also has a list of exemptions. The state determines whether its residents can use the state or federal bankruptcy exemption list or make a choice between the two. If you use state exemptions, you can also use federal nonbankruptcy exemptions. Find out what you can protect with your state bankruptcy exemptions.
Although state and federal exemptions often cover similar property types, the values of particular exemptions can vary widely between schemes. For instance, in one state, you might be able to exempt $100,000 in equity in a home, while the neighboring state allows only an exemption of $5,000.
Which State’s Exemptions Can I Use to Protect My Property?
Which scheme you’ll be entitled to use will depend on where you lived during the 730 days before filing for bankruptcy.
- If you lived in one state during the 730 days before your bankruptcy case, you would apply the exemption system allowed by that state.
- If you lived in more than one state during that 730-day period, look back to where you lived during the 180 days before the 730 day period and apply the exemption scheme allowed by the state.
- If you lived in more than one state during the 180 days, use the state you lived in the longest during that period.
- If you lived out of the country during the 180 days or did not have the necessary intent to live in one state during the 180-day period, you’ll use the federal exemptions.
Example. After living in California for six years, Camden filed a bankruptcy case. Because she lived in California for the entire 730-day period before filing the case, Camden will use the California bankruptcy exemptions.
Example. Austin lived in Georgia for five years. He moved to Florida on May 1, 2024. On August 29, 2018 (120 days later) he filed for bankruptcy. Because he lived in two different places during the 730 days before he filed for bankruptcy, Austin has to look back another 180 days. From March 3, 2022, to August 30, 2022 (the 180-day period), Austin lived in Georgia. He will use the Georgia bankruptcy exemptions, even though he now lives in Florida (and will file his case in Florida).
Example. Dakota moves around a lot. During the 730-day period, she lived in California, Nevada, and Utah, but during the preceding 180 days, she lived in Texas for 91 days and Washington for 89 days. Dakota will use the Texas bankruptcy exemptions.
Example. Devon was stationed in multiple states during the 730-day period before filing for bankruptcy. He was stationed overseas during the prior 180 days. Devon will use the federal bankruptcy exemptions.
Questions for Your Attorney
- If I live in this state, but my business office is in another state, where should I file?
- I’ll be moving out of state in a few months. Should I file for bankruptcy now or wait until after I move?
- Can my spouse and I file together if we live in different states?