How to file a bankruptcy in Virginia
In Virginia, most individuals file either Chapter 7 or Chapter 13 bankruptcy. Both chapters will provide you with relief from your creditors, including relief from foreclosure actions, lawsuits, garnishments and even phone calls. The purpose of bankruptcy is to provide you with a fresh start and usually results in a discharge of all or most of your debt.
If you are a resident of Virginia and are wondering whether bankruptcy is an option that may solve some of your financial difficulties, we can help. The Law Firm of Tyler, Bartl & Ramsdell, P.L.C. focuses primarily on bankruptcy law, and can provide you with the help you need to file bankruptcy as a means to protect yourself from creditors.
The law firm of Tyler, Bartl & Ramsdell, P.L.C. offers a free consultation, which gives us an opportunity to determine whether or not bankruptcy is an option for you, and if so, which chapter of bankruptcy is the most appropriate for your financial situation. Call us for an appointment or complete the short contact form on our homepage and you will be on your way to getting the answers you need to your difficult financial questions!
The Bankruptcy Process
The process of filing for bankruptcy can be complex and time intensive. These are the steps that generally occur during the bankruptcy process:
- File a bankruptcy petition, along with all required forms, schedules, and statements, preferably with the help of a bankruptcy attorney
- In Chapter 7 and 13, you will be required to attend a meeting of creditors, which typically takes place about one month after your bankruptcy petition is filed.
- In Chapter 7, your Trustee will determine whether or not any assets/property can be liquidated for the benefit of your creditors. Individuals are typically eligible for a discharge approximately 60 days after the meeting of creditors.
- In Chapter 13, the proposed repayment plan is filed with the Court. Once your repayment plan is approved in Chapter 13, you will be required to make all the payments under the plan (typically 36 or 60 months) before you will be eligible for a discharge of the portion of debts that were not paid in full in the repayment plan. Failure to make a payment may result in the dismissal of your case.
Chapter 7 Bankruptcy is the most common type of bankruptcy case and is the most appropriate option if you have few or no assets and cannot pay your creditors. Individuals must qualify for Chapter 7, which is based, in most cases, on your household income and may involve application of the means test for higher income households. Individuals whose debts consist primarily of non-consumer debts (i.e. taxes, business debts, etc.) can also file under Chapter 7. Chapter 7 typically results in a discharge of the obligation to pay most of your debts, but some debts may not be dischargeable (i.e. taxes, domestic support obligations, debts obtained through fraud, etc.) The most common types of debts that are discharged in Chapter 7 include credit cards, retail credit obligations, medical bills, judgments and personal guarantees on business debts. In Chapter 7, a trustee is appointed to your case to determine if any of your assets can be sold to pay a portion of the debts owed to your creditors. However, depending on the different exemptions (protections) for your assets that are available, there is usually nothing left that can be liquidated to pay your creditors. In Virginia, some of the more common exemptions include:
- In Virginia you must use state exemptions. These include:
- Your home or up to $5,000 of its value
- Household furnishing up to $5,000 in value
- Life insurance proceeds
- Motor vehicle equity up to $6,000
- Firearms up to $3,000 in value
- Retirement and pension plans
- Tools and equipment used in your trade or business up to $10,000 in value
In Chapter 13 bankruptcy, some or all of your debts are repaid under a court-approved repayment plan. Chapter 13 allows individuals to keep most of their assets and can also provide an opportunity for individuals to catch up on missed mortgage payments, outstanding tax debts or even domestic support obligations. In some cases, if you have excess disposable income that prevents you from qualifying for Chapter 7, you may be steered into Chapter 13 to use some of the disposable income to pay back a portion of your debts.
To fully understand the complexities, advantages and disadvantages of filing bankruptcy in Virginia, contact us today at 703-549-5000 for a free consultation.