Most people know there are restrictions on traveling and relocating if someone is accused of violating the law, but what if you declare bankruptcy? Is it legal to relocate to another state after declaring bankruptcy? Speak to a bankruptcy attorney in Kingston, NY, today to learn more and get answers to the questions that you may have.
Are you allowed to move after declaring bankruptcy?
The date a bankruptcy case is filed determines the majority of its elements. As a result, a later move usually has very little consequence. Most bankruptcy laws are set at the federal level, with minor variances primarily relating to exemptions in each state. A few statutes determine the impact of a move on your bankruptcy proceedings.
Requirements
The court jurisdiction determines the venue where you have stayed or had your primary assets for most of the last 180 days. Sometimes the best location is simply where you just left. You must have lived in a state for at least two years to qualify for a state’s bankruptcy exemption (730 days). If you have resided there for less than two years, the exemption provisions of the prior state will apply. This provision discourages people from migrating to a state with favorable exemption laws before declaring bankruptcy in hopes of taking advantage of the system.
However, if the state exemptions you might ordinarily claim are not accessible to non-residents, the Bankruptcy Code’s default exemption scheme applies. They are commonly known as Code exemptions or federal exemptions.
Exemptions
Exemption laws govern the assets you can safeguard in bankruptcy and vary by state. Some states allow you to choose between federal and state exemption schemes. If you have resided in the state where you declare bankruptcy for at least two years, you can make use of the exemption system of that state or, if that state allows it, the federal exemptions.
If you lived in a state for less than two years before declaring bankruptcy, the exemption provisions of the state where you lived during the 180 days preceding the two-year residency requirement would apply. Several states need you to be a current resident of the state to avail of their exemptions. You will use the federal exemption system if you have just relocated from a state with such an exemption statute.
If you have relocated or are considering moving after declaring bankruptcy, consult an experienced bankruptcy attorney to avoid making costly mistakes.
