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What to Do If You Are Moving While in Bankruptcy

Americans are a mobile people, so it’s not unheard of for them to move while their bankruptcy cases are still pending. Fortunately, bankruptcy is a federal matter so it’s fairly easy to transfer a case from one bankruptcy court to another if the move is a significant distance. Whether yours is a New York bankruptcy or about to become one, there are several important facts to know about moving while in bankruptcy.

(1)  Obviously, if you’re moving in the same federal court jurisdiction, all you will need to do is notify the bankruptcy court and the trustee. Transferring your case probably isn’t necessary if you’re living on the edge of the jurisdiction and moving to an adjacent one, e.g. from New Jersey to New York.

(2)  However, moving a larger distance will complicate your case, so it’s discouraged. All the players in your case, like your bankruptcy lawyer and the trustee overseeing your case are already in the same place and changing any of them is an inconvenience, especially for chapter 7 cases, which only take a few months.

(3)  If your case is early in the process, attending your meeting of the creditors might be difficult. As with filing bankruptcy from outside the United States, though, it’s a practical matter. During the pandemic all such meetings are by phone in any case. Some trustees are fine with attendance by a remote connection, but executing a power of attorney instrument to allow someone to substitute for you will work too.

(4)  When changing your address, be sure to use the forms from the bankruptcy court in the jurisdiction you are moving from and not the one you’re moving to. Even if you don’t transfer your case you do not want the court to lose track of where you are, particularly if you’re close to receiving your discharge. Notifying the trustee is advisable too (and obviously your bankruptcy lawyer).

(5)  Do not sell assets that belong to the bankruptcy estate. Any of your pre-bankruptcy possessions that are non-exempt, not reaffirmed, or not assumed belong to the bankruptcy estate for liquidation and distribution. Depending on your case, this will most likely include your house and other real estate you own. If you do sell the bankruptcy estate’s property, expect the trustee to pursue you for the proceeds. Although, if the trustee files a report of no distribution or abandonment of an asset, then it reverts to you and you are legally free to sell it. Also, don’t expect to benefit from your new home state’s exemptions, if they happen to be more generous than your current home’s. Amendments to exemptions usually require the debtor to be present in the new state for 730 days.

(6)  Transferring your case will require moving the bankruptcy court for a change of venue. You may need to appear before your current bankruptcy judge to explain why moving won’t prejudice your case.

Sometimes opportunities arise that can’t be passed up, often finding a new job in a new state. Other times, debtors have to move to a different state for cheaper housing nearby. Regardless, the bigger the move, the bigger the hassle will be, but it’s ideal to conclude your bankruptcy where it started.

However currently, because of the pandemic, all 341 meetings take place on the phone, and the situation is not a problem.  Still, if you are new to New York, then you need an experienced New York bankruptcy lawyer to handle your case.

For answers to more questions about bankruptcy, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced bankruptcy attorney near me Bruce Weiner for a free initial consultation.

Rosenberg, Musso & Weiner, L.L.P
26 Court St # 2211
Brooklyn, NY 11242, USA

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