Filing Bankruptcy After Moving to Another State or District

Learn when and where you can file for bankruptcy after moving to a new state, as well as the exemption laws you'll use to protect your property.

Updated by , Attorney · University of the Pacific McGeorge School of Law

Most people file for bankruptcy in the bankruptcy court closest to their home and use their current state's exemption laws to determine the property they can keep. But the rules are more complicated if you've moved from another state.

"Venue" rules will determine which federal court location you'll file in, and "exemption domicile" rules govern the state exemptions you'll be able to use. Specifically, whether you'll use the new or old state's exemption set.

Where to File After Moving to Another State

You must reside in the jurisdiction where you want to file for the greater part of the last 180 days. (28 USC §1408(1).) In other words, you must have lived in your current location for at least 91 days before you can file for bankruptcy there. After that, you can file for bankruptcy where you live.

While this general jurisdiction rule applies to all bankruptcy filers, it pertains only to the court location where you'll file your case. The laws you'll use to protect your property depend on the applicable exemption laws.

Protecting Property With Exemptions

You don't lose everything you own when you file for bankruptcy. Bankruptcy exemption laws tell you the type and amount of property you'll be able to protect. If you've lived in several states before filing, the exemption laws you'll use will depend on where you were "domiciled" before filing for bankruptcy.

Find out more about the two most common types of bankruptcy.

How Bankruptcy Exemptions Work After Moving to Another State

Each state has exemption laws that determine how much property you can protect in bankruptcy. Bankruptcy exemptions vary significantly from state to state, with some states having generous exemptions. The federal law has an exemption set, too, and ome states allow you to choose between the state and federal exemption system.

The bankruptcy exemption set you choose will protect the same property regardless of whether you file for Chapter 7 or Chapter 13. But what happens to "nonexempt" property that isn't covered by an exemption will depend on the bankruptcy chapter you file.

For instance, in Chapter 7, you'll lose nonexempt property. In Chapter 13, you'll keep all of your property but pay the value of anything that isn't covered by an exemption to creditors in your repayment plan.

What Is a Domicile for Bankruptcy Exemption Purposes?

Your domicile is the place you consider your permanent residence. In most cases, it's where you're registered to vote, pay taxes, and intend to make your permanent home. Although it's likely where you currently live, it isn't always the case. For instance, if you usually live in California but are in Texas for a temporary work assignment, your domicile will be California.

The 730-Day Rule

If you've been domiciled in your current state for the 730-day (two-year) period before filing for bankruptcy, you can use that state's exemption system (or the federal exemptions if that state allows you to choose between the two). The rule ensures that people don't temporarily move to another state to take advantage of that state's more generous exemptions. But if you haven't been domiciled in the same state for two years, you'll use the 180-day rule to determine your state exemptions.

The 180-Day Rule

People who didn't live or "domicile" in the same location for the two years before filing bankruptcy must use the exemptions of the state they were domiciled in for the better part of the 180 days before the two years before your bankruptcy filing date. In other words, you'll use the exemptions of the state you lived in during the two- to two-and-a-half-year period before filing.

For instance, suppose you filed for bankruptcy on January 1, 2020, and didn't have the same domicile for the preceding two-year period. You'd look to your domicile from July 1, 2017, through December 31, 2017, and use that state's exemptions.

If You Can't Use Any State's Bankruptcy Exemptions

Sometimes the rules result in not being eligible for any state's exemption system. Some states don't allow non-residents to use their exemptions after moving away. Or you might not have been domiciled in the U.S. during the applicable period.

Fortunately, the bankruptcy code has a solution. If a state's domiciliary requirement renders a debtor ineligible for any exemptions, the debtor can elect the federal exemptions. In other words, if you were a former resident of a state but couldn't use its or your current state's exemptions, or you can't establish domicile, you can use the federal bankruptcy exemptions.

Additional Requirement for Homestead Exemptions in Bankruptcy

Many states have homestead exemptions you can use to exempt and protect the equity in your home. Some states have very generous or unlimited homestead exemptions. However, if you haven't owned your home in that state for 40 months before filing the bankruptcy, federal law will limit your state's homestead exemption to $189,050 even if you otherwise qualify to use that state's exemptions. (This amount is current for cases filed between April 1, 2022, and March 31, 2025.) If, however, you sold a home and used the proceeds to buy a new home in the same state, you can combine the ownership time of both houses to satisfy the 40-month rule.

Get a Bankruptcy Lawyer

Before applying the above rules, consult with an attorney in your area. A bankruptcy lawyer can explain your options and help you reach the best possible outcome.

Updated April 8, 2022

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