If you recently moved from one state to another, there are certain rules that will impact where and how you file bankruptcy.
Let's take a look at a few of those rules and other considerations a debtor must make before filing bankruptcy after a move:
Where You Moved
Certain bankruptcy rules could impact your case if you moved from one state to another. If you only moved from one city or county to another, the only change may be which court you file your case.
When You Moved
If you moved recently and want to file bankruptcy, you will need to file in your previous state of residence or wait at least 91 days before filing bankruptcy. The bankruptcy code states that a debtor is eligible to file for bankruptcy in a state as long as they have lived there for the better part of six months. In other words, as long as you have lived in the state for at least 91 days you can file bankruptcy there. If you did not live there for 91 days or more, then you will need to file bankruptcy in the state which you spent the better part of six months.
Each state has its own set of bankruptcy exemptions . If a debtor wants to use a state's exemptions, they must have resided in the state for at least 2 years, or they will need to use the exemptions of the state where they most recently lived for 2 years or more. This law was changed in 2005 when bankruptcy reform was implemented to prevent debtors from filing bankruptcy in a state simply because they had more generous bankruptcy exemptions.
Should You Delay Filing Bankruptcy?
If you're just a few months shy of meeting the residency or bankruptcy exemption requirements, you may want to delay filing bankruptcy. However, if you are facing lawsuits, wage garnishments , repossession or foreclosures , then delaying bankruptcy may not be an option. It's best to discuss the timing of your bankruptcy fling with an experienced Dallas bankruptcy attorney so they can advise you based on the particulars of your case.
If you can negotiate with a creditor to delay adverse actions while you wait out a bankruptcy filing that may also work in your favor. For example, entering into a payment plan with a vehicle financer could prevent a repossession and work in your favor if you want to keep the car once you file bankruptcy. The same strategy applies to a home mortgage. Working out a payment plan to delay foreclosure could work in your favor once you file bankruptcy especially if you want to keep your home.
Reed Allmand is Board Certified in Consumer Bankruptcy by the Texas Board of Legal Specialization. He is the managing partner of the law firm Allmand Law and NACBA's State Chair for the Northern District of Texas. He has been practicing bankruptcy law for nearly 10 years and has handled more than 3,000 bankruptcy filings. Allmand has appeared on 'Money for Breakfast' on Fox Business News and is the author of " The Truth about Bankruptcy ." To speak with Mr. Allmand or to schedule an interview, don't hesitate to contact us