A majority of states have opted out from the bankruptcy code exemptions meaning that you are limited to state law to keep property. Remember that if you file Chapters 11, 12, or 13 instead of Chapter 7 then you can keep your non-exempt property.
Most of these opt-out states have written their opt-out statutes so that they only apply to residents or domicilaries of that state. So if the state uses that language and you do not live there or do not intend to come back then chances are good that you can use the bankruptcy code exemptions to keep property. Most states fall into this category. California is unclear, but Louisiana, Maine, Missouri, Nebraska, are problematic because you are probably stuck with those state’s laws. If you have lived in the Lone Star State for two years and have intended to stay there those two years you are okay. But even if you are a newly naturalized Texan unless you come from one of the above listed states you can use the bankruptcy code exemptions in most cases.
May 18th, 2009
...now browsing by day
You might not be stuck with another state’s bankruptcy exemptions just because you lived there two years ago.
Monday, May 18th, 2009What you can keep in bankruptcy depends on your domicile rather than your residence
Monday, May 18th, 2009If you have been in your home state for more than two years it is really clear cut which state’s law applies, but otherwise it gets tricky.
If you have not lived (“domiciled” that is lived with an intent to remain there indefinitely) in the same state the last two years (730 days to be exact) the state whose law applies is the one where you were domiciled for 180 days before the 2 years. If those 180 days was not in a single state then the one where you were domiciled for the longest portion of those 180 days applies.
If you have not yet been confused then hats off to you. What really complicates it is that “domicile” means something different than “residence.” Your domicile is the place where you intend to remain indefinitely. You can have more than one residence, but not more than one domicile.
So at least now you which state’s law applies, but some state’s laws do not apply extra-territorially, and some states prohibits their residents, domiciclaries, and in some cases their non-residents from using the bankruptcy code exemptions to keep property. You may be stuck with that state’s law.
