Bankruptcy Exemptions and moving to a new state. Law provided by

Posted by Kevin Ryan | Aug 21, 2015 | 0 Comments

Compare Both States' Exemptions

When you file for bankruptcy, your goal is to exempt as much of your property as possible. This is because exemptions protect your assets in Chapter 7 bankruptcy and help you pay less to unsecured creditors in Chapter 13 bankruptcy. However, each state has a unique set of bankruptcy exemptions and different rules on whether you can use the federal bankruptcy exemptions instead of state exemptions. (For comprehensive information on how bankruptcy exemptions work and to find the exemptions in your state, see our Bankruptcy Exemptionsarea.)

If you can exempt all of your property with either state's exemption laws, when you file for bankruptcy doesn't matter for exemption planning purposes. However, if your new state's exemptions allow you to protect more of your assets, you may need to delay your bankruptcy to take advantage of that state's exemptions.

When Are You Eligible to Use Your New State's Exemptions?

Just because you moved to a new state doesn't mean that you are automatically entitled to use its bankruptcy exemptions. Whether you can use a state's exemptions depends on how long you have been domiciled (made it your permanent residence) in that state.

The 730-Day (2-year) Rule

Before you can use a state's bankruptcy exemptions, you must be continuously domiciled in that state for at least 730 days (2 years) prior to your bankruptcy filing date. Otherwise, the 180-day rule determines which state's exemptions you must use. As a result, if you recently moved to a new state and want to use that state's exemptions, you will typically need to delay filing your bankruptcy.

The 180-Day Rule

If you have not lived in your new state for at least two years, then you have to use the exemptions of the state where you were domiciled for most of the 180-day (6 month) period before the two years preceding your bankruptcy filing. So if you still want to use your old state's exemptions, this rule can help you as long as you file your bankruptcy within two years of moving (otherwise you will have to use your new state's exemptions).

What Happens If You Don't Qualify for Any State's Exemptions?

If you don't qualify to use any state's exemption system with the 730-day or the 180-day rule, then you are allowed to use thefederal bankruptcy exemptions.

Special Note Regarding Homestead Exemptions

If you want to take advantage of your new state's generous homestead exemption, you must satisfy an extra condition in addition to the domicile requirements above. In order to use a state's full homestead exemption, you must own your home in that state for at least 40 months prior to your bankruptcy. Otherwise, your homestead exemption is capped by federal law at $146,450 even if your new state's homestead exemption is larger and you are otherwise eligible to use its exemptions. (To learn more and to find the homestead exemption amounts in each of the 50 states plus D.C., see The Homestead Exemption in Bankruptcy.)

About the Author

Kevin Ryan

"I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. And I'll make them go away."  -Kevin Ryan, Attorney at Law Kevin Ryan is a graduate of the College of Wooster and the Cleveland Marshall College of Law. He is admitted to practice before all Alabama State Courts, the United States District Court for the Southern District of Alabama, and the United States Bankruptcy Court for the Southern District of Alabama. The United States Bankruptcy Court is a part of the United States District Court. Since 1998, Mr. Ryan has represented thousands of individual clients in bankruptcy, criminal, divorce, probate, personal injury, and real estate matters.  Attorney Ryan is also a licensed real estate agent in Alabama.  He handles  Bank-owned properties, short sales, and conventional sales in addition to conventional real estate listings.   This wide range of experience enables Attorney Ryan to take a wider look at your legal matter. It is important to consult with an attorney who can see from experience how other legal issues may affect your situation, and advise you accordingly. Personal Info Kevin Ryan is a member of First Baptist Church in Silverhill, Alabama. He resides in Silverhill with his wife Jessica and their three children. Committed to helping our Clients achieve a fresh financial start Our practice focuses primarily on consumer bankruptcy matters under Chapter 7 and Chapter 13 of the United States Bankruptcy Code.  Our law practice also includes matters where bankruptcy litigation, appellate work, or involvement in civil lawsuits is needed by a client.     No representation is made that the quality of any of these legal services is of higher quality than another attorney or law firm.   The United States Bankruptcy Code requires the following notice:  We are a Debt Relief Agency, which means we help people get legal relief from their Debts through the bankruptcy process. Interested in learning more about our bankruptcy attorney near Mobile, Alabama? Contact Us for help with chapter 7 bankruptcy or chapter 13 bankruptcy in Mobile, Baldwin and Washington counties. Education Juris Doctor, Cleveland Marshall College of Law, 1997 Employed full time as a paralegal while attending law school in the evenings. B.A., The College of Wooster, 1994 NCAA Div.III All Conference (N.C.A.C.) Football Team : Defense 1993; Most Inspirational Senior Award 1993; Co-captain 1993; Letterman 1991-1993; Phi Sigma Alapha Fraternity 1991-1994; Athletic Director Jurisdictions Admitted to Practice Alabama


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I'll BE there for you.

I'll never be the kind of attorney your creditors want me to be. I'll always be the kind of attorney you NEED me to be. Call me. I'll BE there for you. - Kevin Ryan, Attorney at Law