People who find themselves in financial problems often face a move as well. This may be for better work opportunities or to move closer to family. If a Bankruptcy filing is also a possibility, the question becomes where to file the case (the “venue”), and whether it is better to file before or after a move. If the move is close by or in the next town, it usually is not a problem because the case may be filed in the same district anyway and driving to court will not be a problem. If the move is out of state, it could be a little more complicated. Federal law requires that the case be filed in the district in which the debtor has resided for most of the last 180 days (or six months). That means if you move to a new state you will need to file in the old state or wait 91 or more days to file in the new state. If you file in the old state, you will need to travel back for any meetings or hearings. Alternatively, individuals can also file in the state and district in which their “principal assets” are located. This could mean real estate or business assets, regardless of whether the individual has ever resided in the state. If you are planning on moving, make sure you see a Bankruptcy lawyer in advance of the move to discuss the details.
The court in which the case is filed is only one issue that arises for people who are moving or have recently moved. The second question (and maybe the more important question) is which state’s exemptions can you use? We discuss that in this follow up post.