“I do not want my neighbors to see my name in the paper – can I file out of district?”

I have had a number of folks ask if they could file in a different district than where they live because of embarrassment they expect to feel over their names appearing in the local newspaper. Many newspapers obtain each weeks court case filings, including bankruptcies, and publish them in the newspaper. There is no way to avoid this happening because a bankruptcy is a public legal proceeding and there is freedom of the press. So, the only possibility is to file in a completely different district than where you live. You name would still appear in the paper, but it would be in a city where far fewer people know you. However, this is not something that can be done routinely.

The place where a bankruptcy, whether Chapter 7 or Chapter 13, is filed is governed by the federal venue statute 28 U.S.C. Section 1408. Essentially, a bankruptcy should be filed either where the Debtor has resided for at least 180 days immediately preceding the filing or where the principal assets are located. If the Debtor has not resided in one district for a total of 180 days immediately before filing, then it is the district where they resided the longest. This means it will be a rare circumstance where one can file a bankruptcy somewhere other than where they live.

I recently came across one of these rare exceptions. The Debtor had moved out of the district where I primarily practice, the Eastern District of Kentucky, to the Western District. She had resided in the Western District nearly 180 days prior to filing and so the Debtor could have filed in Louisville. However, the Debtor wanted to proceed in Lexington. Because the Debtor’s home was in foreclosure here in Fayette County, they were able to file in Lexington even though they now resided in Louisville.

Unfortunately, most people will have to file in the District where they live. However, I urge my clients to give little or no thought to their name appearing in the paper. Few people ever read that section of the paper and those that do will either be understanding of falling on tough times or they will be the type of person prone to gossip. If the latter, they are likely to be gossiping about you anyway and so it might as well be gossip that is based on something true. I have never yet had a client report that filing bankruptcy stirred up such a public controversy as to make them regret the decision.