This is one of those questions that has a very easy answer, for most people. But then can get more complicated for others.
I'll start by making clear that this blog post is about people filing bankruptcy, not corporations or other business entities, which have special rules.
SO WHAT'S THE EASY ANSWER?
Your bankruptcy case is filed where you live. More specifically it's filed in the bankruptcy court of the federal district where you live.
"Venue" is the legal term for the right court in which to file your case. You have venue in the bankruptcy court of the federal district where you live.
WHERE IS MY CASE FILED IF I LIVE IN SOUTHERN CALIFORNIA?
Bankruptcy courts are federal courts. The entire country is divided into federal districts. California has 4 districts: Northern, Eastern, Southern, and Central.
My clients are from the Southern and Central Districts. The Southern District covers 2 counties: San Diego and Imperial. The Central District covers 7 counties: Los Angeles, Orange, Riverside, San Bernardino, Santa Barbara, Ventura, and San Luis Obispo.
If you live in the Southern District's two counties you have only one place to file, in San Diego.
But the Central District is further divided into 5 divisions, with a bankruptcy court in each one:
Click on any of these five divisions, then enter your zip code into the "Filing Location" feature to find out which bankruptcy court your case is to be filed in.
WHAT IF THE PLACE I'M NOW LIVING IS NOT MY PERMANENT HOME?
This gets into the distinction between your "domicile" and your "residence." Bankruptcy law (see 28 U.S.C. § 1408) allows you to file in either your domicile or your residence but it helps to understand what these mean.
Your domicile is the place that you consider your permanent home. You either reside there with the intention to stay there, or you don't live there now but you intend to return there because you consider it to be home.
Your residence is the place you are currently residing, but you may also have another residence simultaneously if you own a vacation home where you reside at time.
You have only one domicile but you can have more than one residence.
If you are currently residing in one place but have your domicile elsewhere, you have the choice of filing bankruptcy in either location. Choosing the right one gives you advantages in cost and convenience.
HOW LONG DO I HAVE TO HAVE A DOMICILE OR RESIDENCE BEFORE BEING ABLE TO FILE BANKRUPTCY THERE?
The Bankruptcy Code seems to state that you must be located in your domicile or residence for 180 days before being able to file bankruptcy in that federal district.
But the time is actually less than that because it's actually where you have a domicile or residence "for a longer portion of such one-hundred-and-eighty-day period than the domicile [or] residence . . . of such person were located in any other district." In other words, if you change your domicile or residence from one federal district to another, you have to be in the new domicile or residence for at least 91 days (the "larger portion of" 180 days).
One small exemption: if you've lived in more than two federal districts during the last 180 days you need to file your bankruptcy case in the federal district where your domicile or residence lasted the longest within that period.
ARE THERE ANY OTHER WAYS TO ESTABLISH VENUE (THE RIGHT TO FILE IN A PARTICULAR COURT)?
Yes, you can also file in the federal district where your "principal assets" are located, as long as those are within the United States. So if your "principal assets" are located in a federal district different from where you live, you can file your personal bankruptcy in either district.
An example of this is if you are now living in another country but had left the majority of your assets in the U.S. Even if you did not maintain your domicile in the state where your principal assets are located, the assets alone give you venue there.
You can also file in the federal district where your "principal place of business" is located, as long as that is within the United States. I said at the beginning, I'm not discussing venue for corporate bankruptcies today. But if you are the part or full owner of a business with its "principal place of business" located in a federal district different from where you live, you can file your personal bankruptcy in either federal district.
So, for example, if you live during weekends at your home in San Bernardino but spend weekdays in Las Vegas operating your business located there, you could likely file bankruptcy in either the Central District of California or the District of Nevada.
WHAT HAPPENS IF SOMEONE OBJECTS TO THE VENUE THAT I'VE CHOSEN?
Usually when you have more than one place where you can file your bankruptcy case, you have broad discretion in choosing between them.
But anybody with a legal interest in your case can object and try to have the case transferred to another bankruptcy court. The standards for doing so are quite vague. The Bankruptcy Code says that a case can be transferred to another court "in the interest of justice or for the convenience of the parties." (See 28 U.S.C. § 1412. )
In fact, even if no one objects to venue the bankruptcy court "on its own motion" "may transfer the case to any other district." (See Bankruptcy Rule 1014 on change of venue.)
Also, if the case was filed in a "proper district" the court can transfer it "to any other district." But if it was filed in an "improper district" the court has the option of either transferring the case "to any other district" or dismissing it—throwing it out.
WHAT IS THE LEGAL EFFECT OF BEING IN ONE BANKRUPTCY COURT INSTEAD OF ANOTHER?
First, the main difference is one of your cost and convenience. But if money is tight—as of course it always is—avoiding unnecessary travel and wasted time can be a significant benefit.
Second, the discharge (legal write-off) of debts is essentially the same at all bankruptcy courts, which are all part of a unified federal system. It doesn't matter if you are surrendering a home in a different state or being pursued on a personal debt incurred in that other state. The Bankruptcy Code and the Bankruptcy Rules are effective the same throughout the country.
Third, nevertheless there can be legal differences in how the bankruptcy laws are interpreted and how bankruptcy procedures are implemented. Rulings by bankruptcy judges can be appealed, and those appellate decisions can result in sometimes subtle, sometimes significant differences from one part of the country to another.
Lastly, perhaps the most important difference in filing bankruptcy from one state to another involves property exemptions—the types and amount of your assets that you can protect and keep. Exemptions can be hugely different between two states. Just because you have venue in a particular bankruptcy court does not necessarily mean that you can use the exemption laws of the residents of that state. The timing rules are different. That will be the subject of my next blog post.