Kentucky Bankruptcy Law

Counsel with Care

I moved recently to a new state recently, can I still file bankruptcy?

Yes, you can. The question in filing a bankruptcy when you have recently moved to a new state is which state’s law determines the exemptions you use. There is a really odd rule for determining this found in 11 USC Section 522(b)(3)(A). Since we are looking at a recent move, then the 730 day period would not apply. If, though, you have lived in the state where you are currently at for 730 days, then you will use the laws of that state to determine exemptions. For everyone else, you must go back to the time before that 730 window (2 years) and look at those preceding 180 days (6 months). Okay, I know – I just lost you.

If you have recently moved, take the day you want to file your bankruptcy and go back in time 730 days. Then, go back in time another 180 days before that for a total of  910 days. The period of time between 910 days and 730 days is what you want to look at. Once you have this time frame mapped out on a calendar, you then have to determine what state you actually lived in for most of that time. That is going to be the state whose law you need to look at to determine exemptions.

Now you have to go to the statutes of that state and find their exemption laws. As you look at these statutes, you are going to want to figure out whether those laws have a residency requirement or a domiciliary requirement. A domiciliary requirement means you actually live in that state. A residency requirement means you have a place there where you could live even if you do not currently park your fanny there. There are other factors also, such as whether you can vote in that state or not that can affect residency status, but those technicalities go beyond the scope of this post.

If there is a domiciliary or residency requirement to use that state’s exemptions, then even if you do not qualify to use your current state of domicile’s exemptions, you will use the federal exemptions by default. This issue can have a dramatic impact on your bankruptcy case, so it is worth spending a little in order to be sure your assets are properly exempted.

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June 3, 2013 - Posted by | Bankruptcy, Chapter 13, Chapter 7, Exemptions, The estate | , , , , , , , , , , ,

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