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 What does “principal assets” mean?  How is it defined?



 “Venue” means the location of the court where the bankruptcy case is filed.

Federal bankruptcy court has rules where a bankruptcy case may be filed.  In summary, here is the rule:

A debtor may file in a particular bankruptcy district if the debtor has been domiciled or has had a residence, principal place of business, or principal assets in this District for 180 days immediately preceding the date of this petition or for a longer part of such 180 days than in any other District.

 See 28 USC Section 1408  (Title 28, section 1408 of the United States Code) which specifies where a bankruptcy case may be filed.

 The "longer part of such 180 days" means 91 or more days out of the last 180 days. 

Thus, venue can be proper based on either: (1) Your residence, (2) Your domicile, (3) Your principal place of business, or (4) Your principal assets.  Thus, in some cases there is more than one venue you can choose from.

Therefore, for example, you could even reside outside of the United States and file bankruptcy in one of the U.S. bankruptcy districts if your "principal assets" are in the location of that district.

 Note: There are approximately ninety-four different federal judicial districts.



Section 1408 provides that a district is proper venue if “principal assets” of the debtor are located in that district (11 U.S.C. 1408).

“Assets” are things that you own, such as real estate, furniture, cars, jewelry, computers, bank accounts, stocks, copyrights, etc.

“Principal” may be defined as that which is most important, consequential, or influential.

“Principal” assets may be determined by the number assets in a location or the dollar value thereof, or a combination of both.  Other factors may potentially be considered as well.

A debtor may, in certain circumstances, potentially have more than one appropriate venue choice based upon more than one principal asset (In re Ross, 312 B.R. 879,889 (Bankr. W.D.Tenn. 2004).


Venue is generally considered to be permissive.  Permissive means that venue is considered ("presumed") proper wherever the case is filed. 

But someone (for example, the bankruptcy trustee or a creditor) may object and seek to prove and convince the court that venue is improper.  Of course, you or your attorney have an opportunity to argue that the selected venue is proper.  The bankruptcy judge will make a decision based on the evidence presented.  

Also, a creditor or other interested party may ask the bankruptcy court to have a bankruptcy case moved to another district for the convenience of the parties or in the interests of justice (i.e., "forum non conveniens").  Alternatively, the Court may dismiss the case, and allow the debtor to refile in another jurisdiction or district.   Again, if this issue is raised and disputed, all interested parties will have an opportunity to be heard before a judge makes a decision.

Convenience Factors: Where is the debtor, creditors, witnesses and/or assets in relation to the court?  Can the case be economically administered from the particular court?  Will property be likely liquidated?).


Practically speaking, frequently, especially when an individual files a case, the venue issues are never raised or objected to.  But, fighting a venue battle could turn into a difficult, costly and time-consuming matter; therefore, one should be careful and diligent (and seek legal advice) in selecting the proper venue, especially if venue is based on principal assets or any basis other than residency.

Whether or not you qualify for Chapter 7, Chapter 11, or Chapter 13 bankruptcy relief depends on the nature and amount of your assets, debts, income, expenses, and other financial information.

The author of this article, Christian attorney, Matthew B. Tozer, practices bankruptcy law in the Central District of California which primarily covers the areas of Orange County, Los Angeles County, Inland Empire, and several other counties.

For a free and confidential consultation, contact Christian bankruptcy lawyer,  Matthew B. Tozer.


Under the new bankruptcy laws, Mr. Tozer is a debt relief agency because he helps people file for bankruptcy relief under the Bankruptcy Code.

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