The simplest answer is “yes, you can move after filing for bankruptcy,” and many people actually do move, especially if they are job hunting and their lack of income was one of the reasons they chose to file.
Bankruptcy laws are federal laws, and while there are some minor variations from state to state, the majority of laws are consistent no matter where you live because they are federal.
Most of the state-to-state variations are related to exemptions and will only be an issue when you initially file for bankruptcy. There are some instances in which a person filing for Chapter 7 bankruptcy and dealing with the asset liquidation process might experience some complications if moving out of state, but an experienced attorney can help you manage the situation.
Another issue when it comes to moving and bankruptcy deals with whether or not you are eligible to move right before filing. Some states offer more liberal exemptions law and people are tempted to move in order to take advantage of one state’s laws over another.
The federal government created residency requirements in response to these variations to discourage people from moving to a different state just before filing.
What do you need to know about the residency requirements before filing for bankruptcy?
In order to file for bankruptcy in a given state, you need to have lived in that state for at least two years. If you move and file in less than two years, your bankruptcy exemptions will be determined by where you lived the 180 days prior to the 24 month filing date. This means that although you’re filing in the state in which you now live, the exemptions from where you used to live could still govern your bankruptcy.
Some states don’t allow you to use their exemptions unless you are living in that state. If this is the case when you file, you’ll need to use the federal exemption guidelines when you file.
For more information about federal bankruptcy guidelines, visit Nolo.com.
Another option is to begin the bankruptcy filing process before moving. You’ll be able to use the exemptions in the state in which you began the process and then continue your bankruptcy from your new location. However, you’ll be required to attend the 341 Meeting of Creditors in the state in which you initially filed, so plan to return to your original location at some point during the filing process, unless the court allows you to attend the meeting via phone or online video conference.
Exemptions are one of the most challenging aspects of filing for bankruptcy, and moving right before or after filing can complicate things even more. It’s essential you work with an attorney who understands how exemptions work and how to make the most of what’s available to you under both federal and state laws.
For more information or to discuss your filing situation with an experienced team of bankruptcy experts, contact the Law Office of Robert M. Geller at 813.254.5696.
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