Can I file a bankruptcy in a different state than where I owe my creditors (jurisdiction vs. venue)?


Today, I had a potential client ask me the following question via my firm’s Facebook page, :

ive lived in Utah for almost 2yrs now. I want to move back home to Arizona to work with my mom because its tough up here. can I file for bankruptcy in Arizona if I owe it to only Utah?”

The short answer is that bankruptcy is a federal law, and when you receive your Order of Discharge from the federal bankruptcy court, it will be valid in any state of the United States of America.  The long answer is a little more complicated and shows that my potential client (who I sent to a friend in Arizona) had really, really been overthinking this one.  jurisdiction and venue

In law we often deal with jurisdiction and venue.  Venue means that place where you go to court.  If you rob a convenience store in Salt Lake City, Utah, it wouldn’t make sense for you to go to a state trial court down in St. George, Utah.  The venue (place where you have the trial) is inconvenient to everyone and is plain silly.  Your would go to a Salt Lake criminal court.

Jurisdiction means that the court has the right to hear that kind of case.  In the aforementioned convenience store robbery, a family court commissioner would not have the jurisdiction to decide this criminal matter.  His jurisdiction deals with family court matters like divorce, custody, and adoption.  There is some overlap with other areas of law, but not much.  You need a criminal court with jurisdiction over criminal matters to hear this case.

So what my potential client was really asking was:

1.  Does an Arizona court have jurisdiction over my Utah debts?, and

2.  Do I have to go to court in Utah since my creditors are in Utah?

1.  An Arizona state court doesn’t have jurisdiction over your Utah debts, but bankruptcy is federal, and the federal bankruptcy court for the district of Arizona has federal jurisdiction over your debts anywhere in the country.

2.  No, although the new Arizona venue is inconvenient to your creditors, it doesn’t matter.  You file bankruptcy where you live, regardless of whether your creditors are local grocery stores or national credit cards with offices in Delaware.