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JoeLawyer, Attorney
Category: Bankruptcy Law
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Experience:  Attorney in the practice of Bankruptcy Law since 1996
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Bankruptcy Chptr 7. I have been living outside of USA for some

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Bankruptcy Chptr 7. I have been living outside of USA for some years. Will file for Federal Rules. What state and Bankruptcy Court should I file in? What states has most favorable laws for debtors/consumers?
Submitted: 6 years ago via Nolo Press.
Category: Bankruptcy Law
Expert:  JoeLawyer replied 6 years ago.

You cannot file bankrupty in the United States unless you reside or have a domicile, a place of business, or property in the United States or a municipality thereof (see 11 U.S.C. 109(a), HERE).

If you do have a residence or domicile in the United States, or if you have a place of business or property in the United States, then you generally have to file in the State in which the residence/domicile/business/property is located (see 28 U.S.C. 1408 HERE, for the rules of where you have to file).

Bankruptcy is federal law, so no State really has laws more favorable than any other State with the exception of exemptions. Each State gets to determine how much property a person who files bankruptcy in that State may exempt (i.e. protect), so depending on what type of property you own and what it is worth, different States will allow you to protect more or less than other States.

Very generally speaking, I have heard that Texas and Florida have generous exemptions, particularly in regard to real estate, but this may no longer be accurate nor applicable to you.

You can see what exemptions each State allows by going HERE. It is not always apples to apples though since each State's scheme is quite a bit different from the next State. Plus, some States allow you to use the federal exemptions and others don't.

I hope I answered your questions, and if you have any follow up questions please let me know!


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