Can I File for Bankruptcy After Moving to a New State?

Can You File for Bankruptcy After Moving to a New State?

Yes, you can file for bankruptcy after moving to a new state, but you need to understand specific rules about timing and eligibility. Bankruptcy is a federal process, so the basic bankruptcy laws are the same no matter where you live. However, each state has its own exemption laws. These laws determine what property you’re allowed to keep when you file.

To use your new state’s exemptions, you generally need to have lived there for at least 730 days (about two years) before your bankruptcy filing date. If you’ve recently moved and don’t meet this requirement, you’ll probably have to use the exemptions from the state where you lived before (or possibly the federal exemptions — more on this below). 

That said, to file your bankruptcy case in your new state, you only need to live there for at least 91 days (the majority of the past 180 days). If you haven’t met this shorter residency requirement, you’ll need to file in your previous state instead. This means it’s possible to file in your new state but still use your old state’s exemption laws, depending on how long you’ve lived there.

These requirements apply no matter which type of bankruptcy you decide to file.

What You Need to Know About Residency Rules for Chapter 7 Bankruptcy

As a general rule, you’ll need to live in your new state for at least 91 days (the majority of the past 180 days) before you can file for bankruptcy there. Courts don’t have a strict rule for when your residency officially starts. Instead, they’ll review the information you provide in your official bankruptcy paperwork to confirm your residency. You won’t need a specific document to prove this, but things like a lease agreement, utility bills, or other mail addressed to you at your new home can help if your state of residency is questioned.

If you haven’t lived in your new state for at least 91 days, you’ll need to wait until you meet the requirement before filing. The alternative is to file in the state where you previously lived. However, filing in your old state can be inconvenient, as you might have to travel there for your 341 meeting (also called the meeting of creditors) or other parts of the process. Waiting the extra time to file in your new home state is often the simpler option.

Why the 180-Day Rule Matters for Deciding Where To File Bankruptcy

One important part of filing for bankruptcy is making sure you file your case in the correct court. Bankruptcy cases are handled by federal courts, which means they have the authority to oversee bankruptcy cases across the U.S. However, each federal court can only handle cases for people who live in its assigned geographic area. This concept is known as jurisdiction, which refers to a court’s power to decide cases within a specific region or for certain legal matters.

Usually, filing in the right court is straightforward — you file in the federal bankruptcy court that covers the area where you live. But if you’ve recently moved, things can get more complicated. That’s because the court in your new state might not yet have jurisdiction over your case. To determine where you should file, bankruptcy rules look at where you’ve lived over the past 180 days (about six months). If you’ve moved recently, you may need to file in the federal court for your previous state instead of your current one. 

Understanding these rules is important to avoid delays in your case, and many people find it helpful to get advice from a free consultation with an experienced bankruptcy attorney to ensure they’re filing in the correct location.

How the 730-Day Rule Affects Which State’s Exemptions You Can Use

Bankruptcy exemptions are the rules that protect certain property when you file for bankruptcy. If something is “exempt,” it means you get to keep it, up to a certain value. For example, if your state’s vehicle exemption is $6,000 and your car is worth $5,000, it’s completely protected. But if your car is worth $10,000, your bankruptcy trustee may sell it, give you $6,000 from the proceeds, and use the rest to pay your creditors. Exemptions are essential because they determine how much of your property you’ll be able to keep after filing for bankruptcy.

Each state has its own exemption laws, and the types of property covered and protection amounts vary widely. Some states even let you choose between state and federal exemptions, but others don’t. To use your current state’s exemptions, you must have lived there for at least 730 days (two years). If you haven’t, you’ll have to use the exemptions from the state where you lived before, assuming that state permits you to do so. (More on this below.)

Which State’s Exemption Laws Apply to Me?

This depends on how long you’ve lived in your current state. If you’ve lived in your state for at least 730 days (two years), you can use that state’s exemption laws. The 730-day rule was designed to stop people from “exemption shopping,” where they move to a state with more favorable exemption laws just before filing bankruptcy. Without this rule, someone could move to a state with generous exemptions, wait 91 days (the minimum time to establish filing jurisdiction), file bankruptcy to keep more of their property, and then move back home debt-free.

If you haven’t lived in your current state for at least two years, the 180-day rule kicks in. This rule looks back to where you lived during the six months (180 days) before the two years prior to your bankruptcy filing. In other words, it checks where you lived 2–2.5 years before filing. You’ll either end up using the exemption laws from the state where you lived for the majority of that six-month period or federal exemptions.

Again, if this sounds complicated, you can always schedule a free consultation with an experienced bankruptcy lawyer to better understand how these rules apply in your case.

Can You Still Use Your Previous State’s Exemptions?

Even if the 180-day rule points to your previous state’s exemptions, that doesn’t guarantee you’ll be able to use them. Some states only allow current residents to claim their exemptions, meaning you might not qualify to use them after moving. If your previous state doesn’t allow non-residents to use its exemptions, you’ll need to rely on the federal exemption system instead.

States That Allow Non-Residents to Use Their Bankruptcy Exemptions

These 10 states allow you to use their exemptions even after you’ve moved away:

• California

• Iowa*

• Louisiana

• Maine

• Maryland*

• Missouri

• Nevada

• North Dakota*

• Utah

• West Virginia

*Some limitations apply.

Using Federal Bankruptcy Exemptions When State Exemptions Don’t Apply

If you’ve recently moved and don’t qualify for your new state’s exemptions — or your prior state doesn’t allow non-residents to use its exemptions — you might be wondering what you’re supposed to do.

Fortunately, federal bankruptcy exemptions are available to help in these situations. If you aren’t eligible to use any state’s exemptions, you can rely on exemptions outlined in federal law to protect your property. This applies even if your previous state didn’t allow residents to use federal exemptions, as those restrictions don’t apply when you’re no longer tied to that state.

To learn more, read Upsolve’s article Federal Bankruptcy Exemptions Explained. 

Should You Consider Hiring a Lawyer for Your Bankruptcy Case?

Filing for bankruptcy after a move makes things a bit more complicated than usual. You have to navigate  rules about jurisdiction, residency requirements, and exemptions . And things can get even trickier if you’re still in the process of moving or if you live in one state but work or go to school in another.

If you’re eager to file your case quickly, it might make sense to consult a bankruptcy attorney, who can help you sort out the details. Upsolve can help connect you with a qualified attorney if you decide to go that route.

On the other hand, if you’re able to wait until there’s no question about your residency (such as after meeting the 91-day threshold to file in your new state), you may be able to handle your bankruptcy on your own or file using Upsolve’s free filing tool.

What if I’ve Already Started the Upsolve Questionnaire? 

If you’ve already started your Upsolve questionnaire, you may have been stopped if you stated you recently moved, will move, or haven’t lived in your new state for more than 90 days. Once you have passed the 91-day residency threshold, you should be able to resume your questionnaire.

If it has been longer than eight weeks since you started the questionnaire, you may be asked to restart your questionnaire to ensure the forms you will file with the court are as accurate as possible. Please contact us if you have any issues resuming or restarting your account!

Let’s Summarize…

You can file bankruptcy and get a fresh start even if you’ve recently moved. But a recent move will impact residency requirements and the exemptions you can use to protect your property. To file in your new state, you need to have lived there for at least 91 days. However, to use your new state’s exemptions, you’ll need to meet the 730-day (two-year) residency requirement. 

If you don’t, you’ll either need to use the exemptions from your previous state — if that state allows non-residents to use its exemption laws — or the federal exemptions.