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Does It Matter in What State I File for Bankruptcy?


Bankruptcy is federal law, and you can use it to discharge any debts that you have in the 50 states of the Union. Many people have homes in multiple states and move around, often for work. They call us up to ask whether it really matters in what state they file for bankruptcy.

In some cases, yes, it does matter. You should meet with a Plantation bankruptcy attorney to discuss your particular situation. Choosing the correct forum to file can help you preserve many assets you might otherwise lose.

What Federal Law Says

Federal law identifies the correct place to file, which is called the proper “venue.” Basically, Section 1408 states the proper venue is your current residence or domicile or where your principal assets are located. If you have made your home in Miami, then this is the correct place to file.

However, the proper venue could be two different cities for some people, who might reside in City A but have most of their assets in City B. Other people are on the verge of moving and have a choice of filing now or waiting to file later in their new state. Of course, this doesn’t mean someone who has lived in South Florida their whole lives can suddenly file bankruptcy in Iowa. But for certain clients, the federal law allows them to choose between two different places.

Choosing Which Exemptions Are Best

Though bankruptcy is mostly federal law, state law comes into play in certain situations, one of which is property exemptions. Exempt property cannot be sold in a Chapter 7 to partially satisfy debts to creditors, which is a huge advantage. If property is not exempt, then the trustee can take it and sell it.

There are federal exemptions, but states are free to create their own, and most have.  If you are choosing between two different states to file in, then you should meet with an attorney to review the exemptions. You want to choose a bankruptcy that can preserve as many assets as possible. Some states are much more generous with exemptions than other states, and filing in the wrong state could significantly harm your financial future.

To qualify for exemptions, you might have to live in a location for a certain amount of time, which is another consideration to discuss with your attorney.

Of course, when it comes to debts, you can usually eliminate any debt, regardless of where it originated. So if you have a personal loan with a bank in Alaska but moved to Miami, you can still discharge the Alaskan debt, so long as the debt qualifies for discharge.

Contact Us for a Free, No-Obligation Consultation

Nowack & Olson has helped tens of thousands of people in Southern Florida file for bankruptcy protection. Our attorneys understand the bankruptcy code’s many wrinkles and can help you choose the most advantageous bankruptcy possible. For more information, or to get answers to your questions, please contact us today to schedule a free consultation by calling 888-813-4737.


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