Where to File for Bankruptcy

If you ask someone where you file for bankruptcy, they’ll probably tell you “in court.” More specifically, you file for bankruptcy in federal court. And if we’re really getting detailed here, you will file bankruptcy in the federal district in which you reside. California has four districts (Northern, Central, Southern and Eastern), with the Central District further divided into five divisions. It’s not terribly difficult to figure out where you should be filing for Chapter 7 or Chapter 13 bankruptcy in most cases, and if you do get it wrong on your first shot, it’s a relatively simple matter to re-file in the right district. But on occasion, venue does become a major concern for a debtor, and those issues are what we’ll cover in this post.

The Difference Between a Domicile and a Residence

Legally speaking, the home in which you reside and live in permanently (or at least for the foreseeable future) is your domicile. Or maybe you’re not living there right now, but you intend to return to this place one day. This is still your domicile Most people only have one home and thus this is their domicile.

However, if you have two or three homes, and spend a couple months out of the year in your vacation homes, these are considered residences and not domiciles as you don’t live there permanently or intend to return there.

Under the Bankruptcy Code, you may file in any federal district in which you either have a domicile or a residence. This means that if you live most of the year in Chicago but then spend the winter in San Diego in your second home, you may file for Chapter 13 bankruptcy in San Diego or Chicago. In this situation, you may want to file for bankruptcy in San Diego to take advantage of California’s property exemption laws. There may also be differences in how the appellate courts in different circuits have interpreted sections of the Bankruptcy Code that could make one venue significantly more preferable for filing, depending on your financial situation.

Whether you choose to file for bankruptcy where you are domiciled or where you reside, you must remain in that place for 91 days prior to filing for either Chapter 7 or Chapter 13 bankruptcy.

Other Ways to Establish Venue in Bankruptcy Cases

The Bankruptcy Code provides for two other ways to establish venue in a Chapter 7 or Chapter 13 case. In the first situation, you file for bankruptcy in the federal district court wherever your “principal assets” are located. As the largest asset that someone owns is typically home, this is not very different from filing where you have a residence or domicile. However, if you now live in a different country and are considering filing for bankruptcy in the United States, this section of the Bankruptcy Code could come into play.

Inheriting a large amount of property that you have never actually visited, or keeping a collection of valuables, such as art or classic cars in one state, could also arguably be used to show that a debtor has “principal assets” that entitle him or her to file for bankruptcy in a certain district.

Finally, under the bankruptcy code a debtor can file for Chapter 7 or Chapter 13 bankruptcy wherever their “principal place of business” is located. Though this uses an ownership stake in a business to establish venue, it applies to personal bankruptcies rather than corporate bankruptcies.

This can also be used to file for bankruptcy in a state different from the one you reside in. For example, you may have a home in Nevada, but actually run a small business just across the California border. Even if you’ve never actually lived in California and your only reason for coming here is to run the business, you could probably still file for Chapter 7 or Chapter 13 bankruptcy here as it your “principal place of business.”

Are You Ready to File for Bankruptcy?

Figuring out where to file for bankruptcy is relatively simple for many clients, but for others will be a major issue. If you’re thinking of filing for bankruptcy, The Law Offices of Melanie Tavare of Oakland and Hayward can review the specifics of your case to determine the best place for you to file for Chapter 7 or Chapter 13 bankruptcy in California. The Law Offices of Melane Tavare can be reached online, or call our office 510-255-4646 for a consultation

The Law Offices of Melanie Tavare is a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.