I recently received a call from a prospective bankruptcy client.
He indicated that he had recently been sued on a debt that he could not afford to repay
and wanted to seek bankruptcy relief. We had a productive initial consultation and it appeared that he was qualified to file a Chapter 7 petition and that he was entitled to a discharge. However, in passing he mentioned that he had just moved to New Jersey from New York. I advised him that if he needed to file right away, he could not do so in New Jersey.
28 USC 1408(1) provides that:
“Except as provided in section 1410 of this title, a case under title 11 may be commenced in the district court for the district—
(1) in which the domicile, residence, principal place of business in the United States, or principal assets in the United States, of the person or entity that is the subject of such case have been located for the one hundred and eighty days immediately preceding such commencement, or for a longer portion of such one-hundred-and-eighty-day period than the domicile, residence, or principal place of business, in the United States, or principal assets in the United States, of such person were located in any other district; or (2) in which there is pending a case under title 11 concerning such person’s affiliate, general partner, or partnership.”
What this means simply is that a debtor should file in whichever district (venue) a person has domiciled, resided or had a principal place of business in for the last 180 days. If you lived or had a principal place of business in two different places during the last 180 days, then the proper place to file is where you lived or had your place of business for the majority of the last 180 days. This would generally mean that if my caller wanted to file in New Jersey, he should wait until he had lived here for 91 days.
The court will presume that the debtor’s venue is proper unless someone objects to it. If a case is improperly filed, the court can dismiss it or transfer it to the district that the debtor lived for the majority of the last 180 days.
This can be a complex issue and it is crucial that a prospective bankruptcy filer seek the advice of an experienced bankruptcy attorney to determine where to file.