The Giuliani Bankruptcy: A Case Study in Residency and Domicile

When a high-profile debtor attempts to shield millions in assets and has multiple residences, the legal issue is likely which property is the debtor’s homestead. Rudy Giuliani’s Chapter 11 bankruptcy filing serves as an excellent case study in issues of residency versus domicile.

Looking past the headlines, let’s focus on the important issue nearly every debtor relocating faces: which state’s exemptions apply and are more beneficial? By understanding the difference between residency and domicile, as Giuliani’s case proves, it is the difference between keeping a home and losing it to creditors.

By Alexander Hernandez, J.D., Professor, and Author of Consumer Bankruptcy Law (Routledge).

Updated on January 29, 2026.

Key Points on Residency and Domicile:

• Residency vs. Domicile: While residency is simply where you live, domicile is your permanent legal home. In the Giuliani case, spending only 20-30% of his time in Florida made it difficult to prove his Florida domicile, putting his condo at risk of liquidation.
• The 730-Day Rule: You cannot simply relocate to another state for better bankruptcy exemptions unless you have been domiciled in the state for at least 730 days (two years) before filing.
• The 1,215-Day Equity Cap: Besides the 730-day rule, under the Bankruptcy Code 11 U.S.C. § 522(p)), the equity is capped at $214,000 if you purchased the home within 1,215 days of filing.
• Federal vs. State Choice: If a debtor fails to meet the residency requirements for a state exemption, they may be forced to use the Federal Bankruptcy Exemptions or exemptions from the state in which they previously resided.
• Good Faith is Mandatory: As seen in the 2024 dismissal of Giuliani’s case, the court can terminate bankruptcy protection entirely if a debtor fails to provide full financial transparency or acts in bad faith.

The Bankruptcy Exemption Strategy: Choice of Law

In my book, Consumer Bankruptcy Law, I discuss how exemptions are the “engine” of a bankruptcy case and likely decide what is best for a debtor. For Rudy Giuliani, the goal was clear: use the generous homestead exemption in Florida to protect his $3.5 million Palm Beach condo.

However, the Bankruptcy Code does not simply allow you to shop around (known as forum shopping) for the best laws by moving right before you file. This is where the 730-day residency rule creates a massive hurdle for debtors.

The 730-Day Domicile Requirement

To use a state’s bankruptcy exemptions, you must be domiciled in that state for at least two years (730 days) prior to filing.

The Rule: If you haven’t lived in the state for the full two years, the bankruptcy exemption laws of where you resided previously are applied as long as you have resided in your new state for at least 91 days during the last six months (180 days). See 28 U.S.C. Section 1408.

Applying the Residency Requirements: For Giuliani, this meant his Florida condo was at risk of being considered under New York’s significantly lower homestead limits.

Is it Residency or Domicile? What’s the Difference?

This distinction between residency and domicile was key to the Giuliani case. Otherwise, he stood to lose the $3.5 million Palm Beach condo. Residency is a physical presence, meaning where you happen to have a house. Domicile is your legal home, the place you intend to remain indefinitely and return to when you leave.

Creditors argued that Giuliani was merely a “resident” of Florida while remaining “domiciled” in New York. To a bankruptcy judge, evidence of domicile includes where you are registered to vote, where your vehicles are tagged, and where you maintain your primary professional life.

I’ve always described residency versus domicile to my students as “you can have multiple residences, but you can only have one domicile.”

The 1,215-Day Equity Cap

Even if you successfully establish domicile in a state like Florida, your protection may still be limited by 11 U.S.C. § 522(p), often called the 1,215-day rule.

Under the Bankruptcy Code, if you acquired your interest in the homestead within the 1,215 days (roughly 40 months) prior to your filing, your state homestead exemption is capped at $214,000 (the amount of equity protected) regardless of how generous the state’s own laws are.

If you do not meet this 1,215-day ownership requirement, you cannot claim the “unlimited” state exemption, such as in Florida, and instead, your equity protection is restricted to this federal exemption, leaving any equity above that amount vulnerable to your creditors.

State Exemptions Versus the Federal Bankruptcy Exemption

The Federal Limits vs. the Unlimited Exemption: Florida’s constitution provides an unlimited homestead exemption, but the Bankruptcy Code (federal law) “caps” that state right if the house is “new” to the debtor. This applies to all states under the Bankruptcy Code.

The Updated Amount: As of the 2025 adjustment, the cap is $214,000 (up from the previous $189,050). The Means Test figures have also increased. Your state’s latest amount can be seen via this prior article.

Dismissal and the “Bad Faith” Filing Factor

Ultimately, the technical residency dispute became secondary to a larger problem. In July 2024, the court dismissed Giuliani’s Chapter 11 case. The judge found that Giuliani was uncooperative and failed to provide the financial transparency.

By early 2025, without the protection of the bankruptcy court, Giuliani reached a private settlement with the election workers Ruby Freeman and Shaye Moss. While he retained his properties, he had to agree to an undisclosed compensation amount, a reminder that bankruptcy only protects debtors operating in good faith.

For this reason, I have consistently stated in Bankruptcy.blog as well as my YouTube videos to always be honest with your bankruptcy attorney so they can prepare a strategy based on the specific facts of your case. Bankruptcy lawyers don’t like surprises.

The Professor’s Conclusion

Time your moves: If you want to use a particular state’s exemptions, the 730-day clock is non-negotiable, and you have to work around that strategy.

Document your Domicile: Moving isn’t just about moving furniture and personal belongings; it’s about moving your legal identity (driver’s license, voter registration, etc.) as proof that this is where you now reside (your domicile).

Transparency is Key: No exemption can protect a debtor who fails to disclose all of their assets to the bankruptcy trustee.

The charts below from my textbook should further simplify the residency requirements.

Source: Consumer Bankruptcy Law: A Practical Guide for Students and Professionals.

Source: Consumer Bankruptcy Law: A Practical Guide for Students and Professionals.

Colleges and universities can purchase my bankruptcy law textbook directly from Routledge Publishing. Paralegals and students who are buying single copies can do so via Amazon Books. To access my YouTube channel, click this link.

You can learn more about filing for bankruptcy and the bankruptcy petition via this link. Information on the bankruptcy court system, contact information for trustees, and your state’s exemptions can be found here. The federal bankruptcy exemptions are listed here. The latest version of the 341 Meeting of the Creditors can be found here.

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