Bankruptcy Residency Requirements
Residency and Place of Filing
Many people ask, "What are the residency requirements to qualify for bankruptcy?" First understand that residency doesn't decide whether you can file some type of bankruptcy, it determines
where you can file bankruptcy and
which set of property exemptions will apply to your case.
Whether you can file. As far as
whether you can file, the answer (at least as far as residency is concerned) is always "Yes, you can file bankruptcy, no matter where you live." The first real question is "where can you file?" To answer that, you need to understand the federal bankruptcy "map."
What Federal District are you in? Start with the concept that all bankruptcy is federal law, not state law. That is to say, you can't file a bankruptcy case in a Florida State Court, only in a Florida
Federal Court. Using a County map, each state is subdivided into Federal "Districts." Florida is divided into three Federal Districts, the Northern District, the Middle District, and the Southern District. As a result, if you want to know what Federal District you are in, you only need to locate your County on the Florida Federal District map.
Each Federal District is further subdivided into "Divisions." For example, the Middle District of Florida is divided into four Divisions known as the Jacksonville, Orlando, Tampa, and Ft. Myers Divisions, and there is a bankruptcy courthouse in each of those cities. The Orlando Division, for example, covers the following Counties: Brevard, Lake, Orange, Osceola, and Seminole. The main importance of Divisions is that it tells you which Florida city has the bankruptcy courthouse where any hearings on your bankruptcy case will be held. For example, all hearings held on cases for people who live in Seminole County will be heard at the bankruptcy courthouse in Orlando.
In Which Federal District are you permitted you file bankruptcy? There are two common ways to figure out what Federal District you are permitted to file your case in. One is (1) where you have been
living and the other is (2) where your
principal assets have been located. For both ways, the critical time period is the
180 days before the bankruptcy is filed. The precise questions asked by the Court are "In what Federal District have you lived for the greatest portion of the 180 days period before you filed your bankruptcy case?" and "In what Federal District were your principal assets located in the 180 period before you filed your bankruptcy?" You may have already figured this out, but since
you get to decide
when you file your bankruptcy case, it follows you also have some control over what calendar dates that 180 period will cover. In other words if you file today, we will be talking about the last 180 days measured backward from today. But if you
delay the filing of your bankruptcy for a month, then the 180 period of time will cover a different set of dates, also going backwards 180 days, but measured from a date a month
into the future, not measured from today. Sometimes, you need to delay filing your bankruptcy case to be able to file your case in the District where you live now.
Is it possible to have your choice of two different Federal Districts? For most people, the Federal District is the same for both where they have
lived in the last 180 days and where their
principal assets have been located for the last 180 days. This is not always the case. Suppose a couple moved out of their house in Miami four months ago because it was in foreclosure and moved to Gainesville where they are now renting an apartment. Their principal asset is their home. It still belongs to them because the foreclosure is not complete. So their principal asset is located in Miami, in Dade County, which is in the Southern District of Florida. But for the greatest portion of the last 180 days (4 months in this example) they have lived in Gainesville, in Alachua County, which is in the Northern District of Florida. So this particular couple qualifies to file in two Federal Districts, the Southern District and the Northern District. Which district will they choose? Most likely they will choose the Northern District, because they will have to attend a creditors' meeting, and it will probably be a lot more convenient for them to attend a meeting in Gainesville where they live now rather than travel 300 miles to attend a creditors' meeting in Miami. There could be extreme situations where the couple files in the Southern District the bankruptcy courts there have ruled on a specific issue in their favor if they know the bankruptcy courts in the Northern District have ruled against their position on that same issue, but this is not a very common situation.
Summary for Place of Filing Bankruptcy. Since most people (1) decide the correct Federal District for filing bankruptcy based upon residency rather than location of principal assets, and since (2) just over 1/2 of 180 is 91 days, the Residency Rule is often boiled down to the following statement: "You can file your bankruptcy in the Federal District where you are living now once you have lived in your current District for 91 days. Until you have lived in your current District for 91 days, you must file in the Federal District where you came from, not where you live now."