State Rules for Refiling Bankruptcy

Federal discharge bars are the same everywhere, but state exemption rules may affect your refiling strategy.

Federal Rules Are Uniform

The discharge bars -- 727(a)(8), 727(a)(9), 1328(f)(1), 1328(f)(2) -- are federal law and apply the same in every state. The 180-day filing bar under 109(g) is also federal. No state can change these waiting periods.

However, state law affects other aspects of your bankruptcy that may influence when and how to file again.

State Exemption Impact

Exemptions determine what property you can keep in bankruptcy. They vary dramatically by state:

Strategic timing: If you recently moved from a state with generous exemptions to one with more limited exemptions, it may be worth waiting until the 2-year domicile period expires to use your new state's exemptions (or vice versa).

The 2-Year Domicile Rule

Section 522(b)(3)(A) requires you to use the exemption laws of the state where you have been domiciled for the 730 days (2 years) before filing.

If you have not been in your current state for 2 years, you must use the exemptions of the state where you were domiciled for the 180-day period before that 730-day period. This can create complicated situations for recent movers.

The Homestead Cap for Recent Movers

Section 522(p) caps the homestead exemption at $189,050 (adjusted periodically) if the debtor acquired the homestead within the 1,215 days (approximately 3.3 years) before filing and cannot trace the equity to a prior home in the same state.

This prevents "exemption planning" -- buying an expensive home in a state with unlimited homestead exemption shortly before filing bankruptcy.

Related: Strategic refiling considerations | All waiting periods

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