The Residency Requirements for Filing Bankruptcy in MN

Posted by Margaret Henehan on November 8, 2016 at 11:30 AM
Margaret Henehan
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MN-Bankruptcy-Lawyers-Residency-Requirements.jpgBankruptcy is something many of us have thought about during our most difficult financial hardships. It is a wonderful tool designed specifically to help people with money problems gain the financial foothold they need to begin recovery. There are those who would exploit this legislation however which has led to a number of revisions in the bankruptcy code over the last several years. The most notable updates to the bankruptcy code in recent date came in 2005 which not only made the process more difficult to abuse but also more difficult to qualify for to those who truly need the financial help and recovery. We will be examining the rules surrounding residency and their purpose so that you may understand how this applies to your specific case. It is always best to consult with experienced MN Bankruptcy Lawyers to be sure your individual circumstances are address which our friendly staff would be happy to do for you but first let’s get started with the basics of how residency affects filing bankruptcy in Minnesota.

Why It Matters What State You Live In

Bankruptcy is overseen by the federal government so you may be asking yourself why the state you reside in and how long you have been there is relevant. A popular belief among critics of this requirement is that it’s irrelevant as long as the filer can demonstrate they are entitled to File Bankruptcy and meet all other guidelines but there is some validity to establishing a filer’s residency. Under bankruptcy code a citizen must reside within the state in which they file their bankruptcy for the six months immediately prior to filing a bankruptcy case, or the greater portion of the last six months.

What The Residency Requirements Were Designed For

Without the residency requirement individuals could attempt to file falsely or repeatedly with various states throughout the nation. It is unlikely this type of blatant fraud would go unnoticed entirely but regardless of this if a filer were to make numerous false claims in multiple states throughout the country they could potentially waste valuable resources and allow the debtor to unjustly avoid legal actions being taking against them by their creditors. More common is the situation in which a person with financial problems, living in a state where the MN Bankruptcy Laws are not as favorable to debtors as other states, moves temporarily to a more favorable state for the main, if not sole, purpose of filing a bankruptcy case. By requiring an individual to take up residency for six months Congress wanted to eliminate “venue shopping” in bankruptcy.


Determining What States Bankruptcy Exemptions to Use

Your bankruptcy involves your personal property and assets and because of this it is important that during your bankruptcy your possessions and accounts are overseen by the proper set of exemptions. Federal Bankruptcy Code provides allowable exemptions and this option is available to all filers however most states have their own specific exemptions which may be in your best interest to use. Filers in 15 states can choose to use either the bankruptcy code exemptions or state law regarding exempt property; filers in 35 states are limited to using only the law of the state in which they reside to protect the assets they own (Minnesota is one of the 15 states that allows bankruptcy debtors to use bankruptcy code provisions to protect assets). Because of the complexity involved with determining which set of exemptions will serve your needs best it is suggested filers consult with a bankruptcy specialist such as our courteous and knowledgeable team of MN Bankruptcy Lawyers.

The Effects of Moving from State to State Frequently

There are some considerations regarding those who may have moved from one state to another frequently or have become displaced from their primary state of residency. If an individual have resided in multiple states over the last two years their allowed state exemption will come from the state which they resided in two years prior to filing. These requirements can become troublesome and greatly complicate an individual’s case if they are in a situation where they had legitimate reasons for residing in multiple states over a brief period of time.


It is unfortunate these additional requirements can complicate the Bankruptcy Process for many honest and decent hardworking individuals but it is essential to minimizing the abuse inflicted on our nation’s infrastructure by opportunistic and unscrupulous debtors. There are those who have made a career for themselves and fashioned their way of life around exploiting the legal process and bankruptcy legislation seeks to discourage their efforts. Although the process of filing bankruptcy can be complex and seem daunting it does not need to be.

Contact A MN Bankruptcy Lawyer

Our MN Bankruptcy Lawyers would be happy to speak with you at your earliest convenience to address your personal needs and goals regarding your bankruptcy. Let us help you make your future brighter, contact us today to begin the path to financial stability. Contact us today at one of our 8 Convenient and Professional MN Locations. 

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Topics: MN Bankruptcy, Bankruptcy Buzz