A significant consideration in filing your bankruptcy case is “venue” — that’s legalese for the physical location of the court in which you file.
It’s a powerful feature of bankruptcy — especially for business bankruptcy cases under Chapter 11 – that you may be able to pick the court, and that, in turn, can have a bearing on the legal outcome.
A federal statute, 28 U.S.C. 1408(1), specifies where a bankruptcy case may be filed and applies to all types of bankruptcy, from Chapter 7 through Chapter 13. The statute provides options for filing your bankruptcy case.
The law says a debtor may choose to file in the federal court district in which his domicile, residence, principal place of business, or principal assets in the United States have been located for the past six months (or where they have been located for the longest part of those six months, if they have been located in several places during that time.)
This can work to the benefit of businesses in bankruptcy because they are often incorporated in one place but work principally and have assets located in several places. Venue is generally considered to be permissive, that is, proper wherever the case is filed, unless someone objects.
Thus, a debtor should ensure that the place for venue is the most favorable to his case. With venue selection, certain factors must be considered, including:
These are just a few of the considerations that may well affect the outcome of a debtor’s case. Debtors should be mindful of the various options for venue and the burdens and benefits they carry with them when deciding where to file their bankruptcy case.
Work with experienced bankruptcy counsel. For more than fifteen years, our law firm who has successfully handled cases in the various bankruptcy courts in this area of Northern Virginia, Maryland, and the District of Columbia. Call for a complimentary initial consultation.