Temporary Resident of One State Wants to Know Where He Should File
By Jonathan Ginsberg, Atlanta Bankruptcy Attorney on May 12, 2008 in General Bankruptcy Information
If any of you host or contribute to a blog, you know that like potato chips, it is almost impossible to have just one (blog, that is). In addition to serving as a contributing editor of the Bankruptcy Law Network family of blogs, I maintain my own Atlanta bankruptcy blog.
Occasionally, I get questions on my Atlanta bankruptcy blog that are not relevant to bankruptcy filings in the northern district of Georgia. When this happens, I either respond to the question on the Bankruptcy Law Network blog or I send it to one of my colleagues in the Network who might have better insight about bankruptcy law and practice in a different filing district.
This weekend, I received a question about venue. It raises a number of interesting questions about where one should file a case, so I decided to answer it here. Here is the question:
We are looking into filing a chapter 7. The problem is that we are residents of Washington with valid wa, driver licences, licened vehicels,voter reg. ect. but we are working in Arizona temporary for the next two years. We are renting and my wife is working here, I am retired. We own 8 acres in washington, unimproved. We plan on building on it as soon that as a logging moratorium is lifted in less than two years. It is the only real Estate that we own.We have lived in Az. for 1 1/2 yrs. and Wa. for 40 years. My question is which state do we file in and is that property exempted even though we are temporary residing in Arizona?
Here is my answer: the Bankruptcy Code provides that the appropriate venue for a case is the federal judicial district in which the “domicile, residence, principal place of business in the United States, or principal assets in the United States” has been for the greater part of the 180 days prior to the filing of the case.
In other words, where have you been during the 91 days prior to filing your case?
In my blog visitor’s case, I think he could make an argument for either Washington or Arizona. On one hand, he considers himself a permanent resident of Washington, has property there and has ties to Washington through his driver’s license and voter registration. On the other hand, he has been living in Arizona for 18 months and has an employment tie there.
The 2005 revision to the bankruptcy code changed the rules regarding which state’s exemptions that a debtor can claim when he moves from one state to another. This type of exemption planning information falls into the realm of legal advice and I cannot offer legal advice on a blog. What I can say is that my blog visitor needs to speak to qualified bankruptcy counsel in Arizona and perhaps in Washington as well to secure advice about which venue offers the most benefit to him. He also needs to find out if there are court decisions in either or both venues that support or refute his claim for venue in that district - for example, there may be a controlling case in Washington that narrowly or broadly construes the concept of residence.
In Atlanta, where I practice, the courts have not generally taken a hard line on venue if there are no objections from the trustee or creditors. However, fighting a venue battle could turn into a costly and time consuming adventure, so it is better to pay a little prior to filing to narrow down the options.
If you liked that post, then try these...
The "Drive More People Into Bankruptcy Act of 2005"? by Karen Oakes, Southern Oregon Bankruptcy Attorney
"Debt Management Programs"―Better Than Bankruptcy? by Brett Weiss, Maryland Bankruptcy Attorney
Bankruptcy Will Stop A Foreclosure--No Doubt About It! by Adrian Lapas, Eastern North Carolina Bankruptcy Attorney
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