How Moving to Another State May Affect Your Bankruptcy Case
People considering filing a bankruptcy case who have recently moved to another state or are planning an out of state move may need to address special considerations during the bankruptcy planning process. Out-of-state moves can affect bankruptcy filings in at least two major ways: the venue in which debtors may file their bankruptcy cases and the law governing how much property those debtors can keep out of the reach of their creditors.
On the question of venue, there are two factors that determine where a debtor may file a bankruptcy case. Jurisdiction for a bankruptcy case may validly hinge upon the location of any of debtors’ domicile, residence, principal place of business or principal assets in the United States. That’s the reason why so many large companies that seem to have little or no connection with Delaware or New York are able to file chapter 11 bankruptcy cases in bankruptcy courts in those states. However, the second part of the venue question is one of timing. If the relevant location was not constant for the six-month period preceding the filing of the case, jurisdiction is only appropriate in the districts where those things existed for the majority of that six-month period (or, if there were more than two jurisdictions, the one where those things were for the longest portion of that 180-day period). For many debtors in cases under chapter 7 and chapter 13, the practical impact is often that they must have lived somewhere for longer than three months before they are able to file a bankruptcy case their new home state.
Exemption rights are the legal rights available to debtors under the Bankruptcy Code to shield property from their creditors. The nature of those substantive rights depends on the debtors’ residence. Congress left it to the individual states to determine whether a state’s residents could chose between the federal or state exemption schemes or were limited to either the state or federal exemptions. Debtors are entitled to the exemption law of the state in which they have been domiciled for the two-year period preceding the filing of their bankruptcy cases. However, if a debtor has not lived in one state for the entirety of that two-year period, the debtor’s exemptions will be determined according to the law of the state in which his or her domicile was located for the majority of the six-month period preceding the two-year period before the case was filed (whew!).
In most instances, Pennsylvania residents who file consumer bankruptcy cases can chose between the state and federal exemptions. The election of an exemption scheme is an important and consequential decision. An experienced bankruptcy lawyer can help with that selection in order to maximize your exemptions rights.
For a free initial consultation with a Pittsburgh bankruptcy attorney, contact Robleto Law, PLLC.
Robleto Law, PLLC Three Gateway Center 401 Liberty Avenue, Suite 1306 Pittsburgh, PA 15222
We are a debt relief agency. We help people file for relief under the United States Bankruptcy Code.