Recently Moved to DC? The 730-Day Rule Decides Which Bankruptcy Exemptions You Get

The Washington region moves constantly. People leave a lease in Silver Spring for a job in the District, finish an assignment in Northern Virginia and settle on Capitol Hill, or leave DC for a cheaper house in Prince George's County. When one of them needs bankruptcy, two questions come up that most people assume have the same answer: where do I file, and which exemptions protect my property? Federal law answers them with two different rules and two different look-back periods. For a recent mover, the court may be in the District while the exemptions come from Maryland, Virginia, or another state entirely.

Why exemptions depend on where you lived

Exemptions are the rules that let you keep property in bankruptcy, such as home equity, a car, household goods, and retirement accounts. Each state and the District has its own list. The District's exemptions are in D.C. Code § 15-501, and they are generous in some respects; for example, the DC residence exemption has no stated dollar cap. Neighboring states have very different lists.

To stop people from moving shortly before bankruptcy to get a better list, Congress adopted a domicile rule with a long look-back.

The 730-day rule

Under 11 U.S.C. § 522(b)(3)(A), the exemptions you use come from the place where you were domiciled for the 730 days immediately before you filed your petition. Seven hundred thirty days is two years.

If you have not been domiciled in one place for that entire two-year period, the statute looks further back. It uses the place where you were domiciled for the 180 days immediately before the 730-day period, or, if you moved during that 180-day window, the place where you were domiciled for the longer portion of it.

Put plainly:

1. Domiciled in DC for the full two years before filing: DC is your exemption jurisdiction.
2. Moved to DC less than two years ago: look at where you lived in the six months before the two-year window began. That place usually supplies your exemptions.
3. Moved during that earlier six-month window too: whichever place you lived in longer during those six months controls.

Domicile means your true, fixed home, the place you intend to stay and return to, not simply where you happen to be sleeping. A federal employee on a temporary detail, a service member on orders, or a student may have a domicile different from the address on the lease. Voter registration, driver's license, tax filings, and where your family lives all bear on the question.

A worked example

Suppose you moved from Arlington to an apartment in Petworth eighteen months before filing. You have not been in DC for 730 days, so DC is not automatically your exemption jurisdiction. The statute looks at the 180 days before the 730-day window, which is roughly the period from thirty months to twenty-four months before filing. You lived in Arlington for all of that time, so Virginia's exemption law applies, even though your case is filed in the District.

Reverse the facts. If you lived in DC for years and moved to Maryland eight months ago, your exemptions may still come from DC, because DC was your domicile for the period the statute measures.

When no state's exemptions are available: the federal fallback

Some states have "opted out" of the federal exemption list, meaning their residents must use the state's exemptions and cannot choose the federal ones. Maryland and Virginia are both opt-out states. In addition, some states write their exemption statutes so they protect only residents, or only property located in that state.

That combination can leave a recent mover with nothing. If the 730-day rule points to a state whose exemptions do not reach a debtor who no longer lives there, the debtor could end up with no exemptions at all. Congress addressed that problem in the paragraph that follows § 522(b)(3): if applying the domicile rule would make you ineligible for any exemption, you may elect the federal exemptions in 11 U.S.C. § 522(d).

Whether a particular state's exemptions follow a former resident is a question of that state's own statute, and it has to be checked state by state before the petition is prepared.

If DC is your exemption jurisdiction

The District has not opted out. A debtor whose exemption jurisdiction is DC may choose either the DC exemptions or the federal exemptions, but not a mix of both. Which set is better depends on what you own. The comparison is in DC vs. Federal Bankruptcy Exemptions, and the residence protections are covered in The DC Homestead Exemption in Bankruptcy.

One more limit applies to homeowners who recently bought. When a debtor uses state or District exemptions, 11 U.S.C. § 522(p) caps the homestead protection for equity acquired within the 1,215 days (about three years and four months) before filing, with certain exceptions. A recent purchase can therefore receive less protection than a long-held home, even in a jurisdiction with no stated homestead cap.

Venue is a separate question

Where you file is governed by a different statute with a different clock. Under 28 U.S.C. § 1408(1), a bankruptcy case may be filed in the district where your domicile, residence, principal place of business, or principal assets were located for the 180 days immediately before filing, or for a longer portion of those 180 days than in any other district.

So the venue rule asks about the last six months, and the exemption rule asks about the last two years. Someone who moved to DC eight months ago generally files in the United States Bankruptcy Court for the District of Columbia, because DC has been home for the full 180 days. That same person likely uses the exemptions of the place they left. If you moved within the last 180 days, you may need to file in the district you came from, or wait until DC has been home for the greater part of the six-month period.

The steps for filing in the District are in How to File Bankruptcy in DC, Step by Step.

Why this matters so much in the DC region

Federal employees rotate between agencies and posts, military families move on orders, congressional and campaign staff come and go with election cycles, and the DC, Maryland, and Virginia line is crossed every time a lease ends. A large share of DC bankruptcy filers have lived somewhere else within the past two years, and for them the exemption question cannot be answered by asking where they live today.

What to gather before your consultation

1. A list of every address you have had for the past three years, with move-in and move-out dates.
2. Where you were registered to vote and licensed to drive during that period.
3. Which jurisdictions you filed state or District income tax returns in.
4. For homeowners, the purchase date and price of your current home.

With that information, the exemption jurisdiction and the venue can both be determined before anything is filed. See Property You Can Keep in a DC Bankruptcy for how the exemptions then apply to what you own.

Frequently asked questions

Can I wait until I hit 730 days in DC before filing? Sometimes. If DC's exemptions would protect significantly more, waiting can be a legitimate choice, provided creditors are not about to garnish wages or levy accounts in the meantime.

Does the 730-day rule affect the means test? No. The means test compares your income to the median for your household size in the jurisdiction where you live when you file, which is a separate calculation.

Before you work through any of this, the free DC means test calculator takes about three minutes and shows whether Chapter 7 is realistic for your household before you pay for a consultation.