What is Venue in Bankruptcy?

What is Venue in Bankruptcy?

Bankruptcy court is a unit of the U.S. federal court system which is divided into districts. In USA, there is one federal court for each state. Some states in the United States are divided into multiple districts, like New York, where there are four federal district courts. In USA, if an individual thinks of filing for bankruptcy, he/she needs to file their petition in the proper district. Determining a proper district to file the case can be challenging.

Filing the petition in an improper district can lead to dismissal or delay in the case. So, one must necessarily appoint an experienced bankruptcy lawyer when filing for bankruptcy.

The legal term for district is venue where a bankruptcy case is filed and is governed by 28 U.S.C. § 1408. This statute allows a case to begin in a district where any of the following is located: · Debtor’s residence · Debtor’s domicile · Debtor’s principal place of business in USA · Debtor’s estate in the United States Venue in Bankruptcy Bankruptcy Venue refers to the place or the district and division where you file your case. A proper venue is simply the place of filing the case in the division and district where the debtor lives or the place is the debtor’s principal place of business.

Venue: 28 USC § 1408 Title 28 of the United State Code, Section 1408 includes the rules set for voluntary and involuntary bankruptcy cases. This section states that the

case must be filed by the debtor from his/her domicile/residence, principal place of business or where his/her principal assets are located for at least a period of 180 days preceding the bankruptcy filing.

Residence Vs Domicile Bankruptcy Venue is proper when a debtor maintains either a domicile or residence for a period of 180 days before filing for bankruptcy.

However, what’s the actual difference between a domicile and residence is not clear to people. Both residence and domicile are legal concepts which define the physical presence of the debtor. There are many differences between both the terms. Debtor can have multiple residences apart from his domicile which significantly complicates a case when a creditor objects to bankruptcy venue.

Domicile is the actual residence of the individual while residence is the place where the individual will return after a long period of absence. This distinction is extremely critical as there may be multiple locations for filing the case which can result in obligation from creditors, especially when a particular district forum is more convenient or fair than the other.

In such case, only an experienced attorney can advise appropriately where to file for the petition.