What is Required to Prove Texas Residency for Bankruptcy?

by San Antonio Attorney

Facing the need to file bankruptcy it is natural to feel anxious about what is required of you and what will happen to you and your property. It is not the case that you will lose all your property if you file bankruptcy as some assets and property are exempt. What is and is not exempt varies depending on the state. As in some other states, when filing bankruptcy in Texas, both federal and state laws apply; therefore, it can be advantageous to be a Texas resident where the state property exemptions are very generous. This is particularly so in terms of giving people the right to protect their household and contents.

In the past, people have tried to take advantage of more generous exemptions by filing bankruptcy claims in states other than where they were resident. However, changes to the Bankruptcy Code have made it mandatory to prove residency of two years in a particular state before filing bankruptcy.  And the bankruptcy court will require you to prove residency. Obviously, this also applies in Texas, so how do you do this?

There are a number of ways to prove residency that are considered acceptable, and if you are in doubt about the security of your residency status for one reason or another, it makes sense to gather together as much documentary proof as possible. What you are trying to do is to prove that you have ‘legal residence’ in Texas as opposed to a temporary house or holiday home. This is also sometimes called a ‘domicile’.

One way is to supply documentary proof of purchase of your primary dwelling 24 months or more before filing. However, having documentation that you have rented a property for two years will also be acceptable as long as the rental agreement is in the name of the person filing bankruptcy. Utilities bills are also a good record of residency, but like rental agreements, they must be in the name of the person filing bankruptcy.

If you have been working in Texas for two years or more documentation from your employer proving this can be filed with the Texas bankruptcy court. Alternatively, if you are self-employed, being able to prove that you have operated a business in Texas also helps to prove residence. In either situation, all bank statements for the necessary period of time, that is two years, also help to build up proof that you have maintained a permanent residence.

Another way to prove residence is to show that you have held a Texas driver’s license for two years or more as well as registering and insuring your vehicles in Texas. A voter’s registration card also shows that you have resided and are legally allowed to vote in the Texas area.

The strict requirements when proving residence have arisen as a result of people behaving unscrupulously in order to access the more favorable bankruptcy conditions they perceive exist in states other than the states they actually live in. Taking care to gather your Texas resident’s documentation ensures that you are not disadvantaged under the new laws.

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