The short answer is yes, you can file bankruptcy after moving. But it may be more complicated to file, depending on the timing and other factors of your recent move. The general rule is that you need to have lived in your new state for the majority of the past 180 days, or at least 91 days, to file your bankruptcy in the new state.
The Bankruptcy Code doesn’t establish a rule for what counts as day one of your residency. The court will try to verify your claimed state of residency with the information you provide in your official bankruptcy paperwork. Documents like an apartment lease agreement or utility bill can support your residency claim. If you haven’t been in your new state for 90 days, you have a chance to avoid rejection by postponing your filing until 91 days after your move-in date.
Which State Exemptions Can I Use?
Your state of residency matters because of exemptions. The Bankruptcy Code is the federal law that governs bankruptcy cases across the U.S. But states can create their own bankruptcy exemption laws. Exemptions are protections that determine what assets (property) you can keep.
Since each state has its own exemption laws, the protection amounts vary based on where you live. There are also federal exemptions. Some states allow you to choose between federal and state exemptions.
Though you can file bankruptcy in a state you’ve recently moved to if you’ve been there at least 90 days, you won’t be able to use that state’s exemptions until you’ve been a resident for at least two years. This rule was put in place to ensure that filers don’t abuse the bankruptcy system by moving just before filing to get better exemptions.
If you haven’t been a state resident in your new state for two years or more, the bankruptcy court will employ a rule called the 180-day rule. This rule looks at where you lived in the 180 days (six months) before the two years prior to filing your bankruptcy. Under the 180-day rule, you can use the exemptions for the state where you lived the majority of those 180 days. This may sound confusing, but it’s easier if you think about where you lived two and a half years ago.
So which exemptions can you use? If the 180-day rule applies to you, you either need to use your previous state’s exemptions or the federal exemptions.
How Do I Know if I Can Use My Previous State’s Exemptions?
It depends on whether your previous state allows non-residents to use its exemptions after they’ve moved. Only 10 states allow non-residents to use their exemptions:
- Iowa (with limitations)
- Maryland (with limitations)
- North Dakota (with limitations)
- West Virginia
If you live in one of these 10 states, you’ll have to use its exemptions if the 180-day rule applies to you.
What About Federal Bankruptcy Exemptions? When Can I Use Those?
If you lived in one of the 40 states that don’t allow prior residents to use its exemptions and you haven’t lived in the new state long enough to use its exemptions (also known as “no man’s land”), then you’ll need to use the federal bankruptcy exemptions.
This Sounds Confusing. Should I Hire a Lawyer?
As you can see, things can get a little complicated if you want to file bankruptcy after a recent move. Depending on how quickly you want to file your case, it may make sense to hire a bankruptcy attorney to help you figure out the details. If you can’t afford a lawyer, you can schedule a free consultation for help or see if you qualify for legal assistance from a legal aid organization.
If you can wait until there’s no question about your residency and exemptions, you may be able to handle your bankruptcy on your own or file using Upsolve’s free filing tool. If you’re worried about being sued or have concerns about collection letters, keep in mind that you can usually stop making payments on bills you intend to discharge in bankruptcy 90 days before filing.
What if I’ve Already Started My Upsolve Questionnaire? What Are My Next Steps?
If you already started your Upsolve questionnaire, it may have been stopped if you stated that you recently moved, will move, or haven’t lived in your new state for more than 90 days. Once you’ve passed the 90-day residency threshold you should be able to finish your questionnaire.
If it’s 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 Upsolve by visiting our Help Center and using the "Submit a Request" feature in the top right corner to send us a message if you have any issues resuming or restarting your account!
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