Considering Bankruptcy and Moving House? Answers to Your Questions

Do you plan to file bankruptcy but also need to — or choose to — move at the same time? Like many decisions during the lead-up to and filing of a bankruptcy claim, undertake moving house only after careful consideration. To help you decide if, how, and when you should move, discover a few important answers to common questions about it.

Can You Move After Filing?

The short answer is that yes, you can usually move to a new home after filing your bankruptcy claim. Most people who do this need to move for unavoidable reasons, such as not being able to pay the rent, having to move for better work opportunities, or moving in with family for financial reasons. The court understands this and makes allowances. 

If the move is in-state, this is usually of little concern even if you move to a different county than what may be under the jurisdiction of your bankruptcy court. In general, your case remains assigned based on where you lived when you filed. You must notify the court of your new address, of course, so you can receive notices.

Can You Move Out of State?

Moving to another state during bankruptcy is trickier. While bankruptcy laws are governed by federal law and are then generally applicable across borders, each state has the right to set some of its own rules in certain areas.

Some of the most common state rules affecting a move are residency laws. The state in which you filed may have residency requirements if you want to use its list of exemptions. If no longer a resident, you may be required to use only the federal exemptions. The second way in which residency may affect your filing is by state residency requirements about how long you must live in a state to use its court system. 

Should You Move Before Filing?

In general, making a long-distance move before filing your case generally simplifies things. Not only does this prevent you from one more upheaval and burden while navigating a bankruptcy legal claim, but this also keeps you physically close to your court for hearings and other legal matters that you must do in person. 

Some debtors move before filing for bankruptcy in order to choose a different jurisdiction. As mentioned, different states have different rules about how much you may exempt. For example, Georgia allows debtors to use some of their unused homestead exemption to exempt other assets. A renter might opt to file in Georgia if this rule would let them protect something a different state doesn’t cover.

What If You Need to Buy or Sell?

If you own a home but need to move, can you engage in a real estate transaction during bankruptcy? This is allowed, but you may need to take some proactive steps. If you haven't filed bankruptcy yet but will do so in a short time, make sure that the sale or purchase doesn't look like an attempt to skirt bankruptcy rules. You wouldn't want to try to hide any funds from a sale, for instance.

Already in an open bankruptcy case? You usually need the court's permission to buy or sell a piece of property. If moving for the right reasons, this is often not an insurmountable obstacle. 

Where Should You Start?

Do you have other questions about moving before or during a bankruptcy claim? Start by meeting with the bankruptcy legal team at  Custer Custer & Clark LLC . We'll help you find the answers you need so you can make the best possible decisions. With our help and your diligence, you'll find the right living circumstances and have a successful bankruptcy case no matter where life takes you.