Written by Craig D. Robins, Esq.
The 2005 Bankruptcy Amendment Act changed how a debtor determines which state’s exemptions statutes to use. If you’ve lived in the same state for the two years prior to filing then you have nothing to worry about. You use the exemptions from that state.
However, if you moved from state to state during the prior two years, then some important rules apply.
The 730-day Rule
If you resided in the same state for at least 730 calendar days continuously (two years) prior to the filing of your bankruptcy petition, then you can use that state’s exemptions.
The 180-day Rule
If you did not live in your current state continuously for at least 730 days, then you must pick the state in which you lived most of the time during the 180 days prior to the 730 days. In other words, the state that must be selected is where you lived most of the time between 2 and 2 ½ years before filing.
The Default Rule
If no state qualifies using the above rules (i.e., you lived in abroad) or if the 180-day state requires current residency or domiciliary to use its exemptions (a tricky issue), then you must use the federal exemptions. The default rule will only apply if you did not live in any state during the 180 day period that began 730 days before filing, or if the state requires current residency or domiciliary.
If You Moved, Seek Advice From an Experienced Bankruptcy Attorney
The above rules can be somewhat confusing. If you moved between different states in the past two or three years, then you should consult with a knowledgeable bankruptcy attorney.