Can You Move During Bankruptcy? Should You?
For anyone struggling with debt, bankruptcy is a vital legal tool to get relief and a fresh start. But if your struggles are causing you to move to a new state, your bankruptcy case could become more complicated. Can you move out of state before or during bankruptcy? Should you? And how does the distance affect your decision? Here are some important answers.
What Happens if You Move Before Bankruptcy?
If your move is about six months or longer in the future, you may be able to file and complete a simple Chapter 7 bankruptcy case before leaving the state. However, if you wait to file in the new state, you must generally complete a period of residency first. This period varies by state. If the delay will be more disastrous for you, you may have to do it now.
Can You Move During Bankruptcy?
What if you end up moving while still in your bankruptcy case? You have several options. The first is to ask to dismiss the original case in your original state and start a new one in your new state.
The second option is to request a change in venue from the bankruptcy court. This means you ask the court for permission to move your case to the new state. The court will expect you to make the case that this move, if granted, will not prejudice your case in your favor and that it's both reasonable and necessary.
Finally, you may choose to keep the case in your old state. You don't necessarily need to reside full-time in the state to see the case to completion there. The debtor can do some tasks, such as the creditors meeting, remotely. But you may need to appear in person on occasion.
Should You Move During Your Case?
Just because you can move during your case, though, the question is should you do so? Certainly, you may not have a choice, depending on your personal circumstances.
A move to a nearby state — especially if served by the same federal court circuit — also may not be too complex since you can leave your case there and return for an appearance. Moving to a more distant state, though, could bring unexpected benefits. If the new state's exemption rules are more advantageous, switching the case or even starting a new one could help you out in the long run.
Where Should You Start?
Before making any decision about bankruptcy and relocation, start by learning more about your options and your financial impact. Meet with a bankruptcy attorney in either state now to begin. For more information, contact a bankruptcy attorney near you.