By Ryan C. Wood
Pursuant to 28 U.S.C. §1408(1) your bankruptcy case should be filed in the district court for the district in which you live, own a home, have a business, or where your principal assets are in the United States for the 180 days prior to the filing of your bankruptcy case. The other option is to file in the district where you live, own a home, have a business, or where your principal assets are located in the United States for the longer period of time of the 180 days than any other district. Under 28 U.S.C. §1408(2) you can also file in the district court for the district that there is already a bankruptcy case pending concerning your affiliate, general partner, or partnership.
The purpose of this rule is to make it more convenient for you and your bankruptcy lawyer to file bankruptcy in a district court that is close to where you live, own a house, conduct business, or assets. It would not make sense for you to file a bankruptcy case in a district court where you would have to drive several hours out of your way to attend a mandatory meeting of creditors or for a hearing in front of the judge. The other purpose of this rule is to discourage you from “forum shopping.” Forum shopping is where you choose the district court to file your bankruptcy case because you believe that district is better than another. It may be due to your belief that the judges or trustees are more lenient in that district. You may even want to file in a different state because that state’s exemptions may be able to protect more of your assets. 28 U.S.C. §1408 is supposed prevent forum shopping. There are also other rules in play that would prevent you from filing in different states to use that state’s exemptions.
In California, there are 4 Federal Districts: Northern, Central, Eastern, and Southern. The Northern District includes the Bay Area and all the way up the western coast of California. The Eastern District includes a huge area from Chico to the north and Bakersfield to the south, and the northeastern and Sierra Nevada Mountains. The Central District includes the Los Angeles surrounding area. The Southern District covers San Diego surrounding areas.
Our law practice is in the Bankruptcy Court for the Northern District of California. Within the Northern District there are 4 different divisions: Oakland Division (Alameda and Contra Costa counties), San Francisco Division (San Mateo and San Francisco counties), San Jose Division (Santa Clara, Santa Cruz, San Benito, and Monterey counties), and Santa Rosa (Marin, Napa, Sonoma, Lake, Mendocino, Humboldt, and Del Norte counties).
To determine where you should file for bankruptcy the most common place to start is the county in which you live. Most consumer bankruptcy filers do not own a business that is located in a different county from they live. Also, most consumer bankruptcy filers do not have most of their assets located in a different county from where they live. You should consult a bankruptcy attorney in your county regarding your filing options if you do own a business or have significant assets in places other than where you live.