Filing for bankruptcy is possible after moving to a new state. However, the process is a bit complicated. To get rid of your financial debts, you need to file for bankruptcy in the proper court. Every court has a limited jurisdiction with respect to location. While the federal court can hear a bankruptcy case, if you move to a new place, the federal court jurisdiction does not exist. In this case, you might require the assistance of experienced bankruptcy lawyers.
If you have moved to a new state, there are some restrictions while filing for bankruptcy. First, you must have lived in the new state for at least 91 days out of the past 6 months to file for bankruptcy there. You can use your apartment lease document or utility bills to prove your residency in the state. If you have not lived for 90 days in the state, you should postpone bankruptcy filing till you have achieved the threshold level. Alternatively, you can file for bankruptcy in the state you had previously resided in. However, you will have to travel there for the creditor’s meeting.
Why the state in which you file for exemption is important?
Since bankruptcy is meant to provide you a fresh financial start, the federal and state laws provide exemptions to save your property. These exemptions vary from one state to another. While some states allow you to choose between federal and state exemptions, others do not. As a result, it is important to determine the bankruptcy exemptions you can avail in the state before you file for bankruptcy. In order to avail state’s bankruptcy exemptions, you must have lived in the state for a minimum of 730 days. This statute prevents misuse of the system for personal gains by bankruptcy filers. In case you have not lived in the current state for 730 days, the 180-day rule is checked. As per that rule, you can file for bankruptcy in the state where you have lived in the six months two years prior to the bankruptcy filing. As per the 180-day rule, you can use the state exemptions where you had lived for a major portion of the 6 months.
Can I use my previous state’s bankruptcy exemptions?
If you have moved out for the first time, you can use the previous home state’s exemptions. First, however, you need to determine whether the state allows non-residents to use state bankruptcy exemptions after moving out. Suppose this provision is not available in your previous state. In that case, you are left in a lurch as the current state’s exemptions will not be available to you. In this case, you can opt for federal exemptions to protect your property.
Since the jurisdiction, residency requirements, shifting to a new state, and bankruptcy exemptions are quite complex, you should consult and hire a bankruptcy lawyer while filing for bankruptcy. If you can wait to fulfill the state’s residency requirements, you can use the current state’s exemptions. People who wish to file for bankruptcy can stop making payments on the bills they wish to discharge through bankruptcy. To know more about the nuances of a bankruptcy filing and discharge in Los Angeles, call 888-297-6203.