Bankruptcy in Virginia
Are you contemplating bankruptcy or hiring a bankruptcy attorney in Virginia? Are you tired of creditors calling for payments you can’t make? Maybe looking for a way to get out of debt and have you exhausted all other options? Then bankruptcy might be the solution you seek. It is a legal option that can erase a portion or all of your debts.
Types of Bankruptcy in Virginia
Bankruptcy is a legal process that helps individuals and businesses get a fresh financial start. It eliminates a portion of or all of their debts or financial liabilities. In Virginia, to be approved, individuals must prove they have a hardship that prevents them from staying current on their financial obligations. Keep in mind that not all debts qualify. Some liabilities, such as child support arrears, delinquent taxes, alimony, and student loans generally do not qualify for discharge. Consumers who find themselves falling behind in debt can file either Chapter 7, 11 or 13. To determine which option is right for you, you’ll need to assess your goals, assets, and income. You should also consider working with an experienced bankruptcy attorney.
In Virginia, the US Bankruptcy Court is divided into the Eastern District and Western District of Virginia. The Western District has courts in Roanoke, Lynchburg, and Harrisonburg, and the Eastern Division has courts in Norfolk, Alexandria, Richmond, and Newport News.
Chapter 7 Bankruptcy
Many people find Chapter 7 to be the right solution for their circumstances because it provides them with the opportunity to start over financially. However, before filing for Chapter 7 bankruptcy, you should thoroughly assess your income and ability to repay what you owe. You should also speak with a bankruptcy attorney in Virginia who can help you to decide if a liquidation plan is right for you.
Typically, individuals approved for Chapter 7 lack stable income or have experienced a change in circumstances that has resulted in an inability to manage their debts. Though Chapter 7 erases debts, the tradeoff is you may have to give up certain possessions, such as your home, car or some other assets. However, once you file your petition, an automatic stay goes into effect that requires all collection activity against you like foreclosures and garnishments, to stop temporarily. However, the automatic stay does not prevent all collection attempts. For example, if you owe child support or restitution for a criminal case, you are still liable for those payments.
According to the Eastern District of Virginia US Bankruptcy Court, you must complete credit counseling from an approved agency prior to filing for Chapter 7 bankruptcy. In fact, you must complete the course within 180 days prior to filing the Petition. If you fail to do so, you risk having your case dismissed. This may happen without refund of the $338 Filing Fee. Furthermore, if you refile within one year after dismissal, your automatic stay protection from creditors may be limited to only 30 days.
There are exemptions from this requirement available to Virginia residents who are incapacitated, disabled or on active military duty. For convenience, the US Department of Justice provides a list of approved credit counseling courses for use in Virginia.
Chapter 11 Bankruptcy
Chapter 11 bankruptcy is more complex than other types of bankruptcy. Businesses often use this chapter, as well as certain types of people. It allows petitioners to restructure their debts with a reorganization plan, so they are easier to manage over a determined length of time, usually four to 18 months. The main benefit of Chapter 11 bankruptcy is that it does not require petitioners to sell off or liquidate their assets to pay what they owe. It does allow debtors to negotiate with their creditors a reorganization plan that enables them to stay current on their debts moving forward.
Filing a Chapter 11 case in Virginia typically begins with completing a Voluntary Petition for Individuals Filing for Bankruptcy. Currently, Filing Fees of $1,738 should accompany the Petition. However, if you are reopening a Chapter 11 case, the filing fees are currently only $1,167. Keep in mind, you may be able to pay the fee in installments by filing the local Installment Fee Application Form 103A.
Chapter 13 Bankruptcy
Chapter 13 Bankruptcy is a debt restructuring or wage earners plan. In Virginia after you file, the courts will assign a trustee to examine your liabilities and assets and ability to pay bills. Unlike other types of bankruptcy, Chapter 13 involves you restructuring your debt with a three to five-year repayment plan. The flexibility of this repayment plan will depend on what property you want to keep and how steady your income is. It may also give you the opportunity to have some or most of your debts discharged.
When you file for Chapter 13 bankruptcy in Virginia, required documents are due either at the time of filing or within 14 days of filing. Failure to pay the $313 filing fee or file all the required documents may result in the dismissal of your case. The Eastern Division of Virginia provides a list of Chapter 13 Filing Requirements, including:
- Chapter 13 Plan
- Creditor Mailing List Matrix
- Statement About Your Social Security Numbers
- Voluntary Petition for Individuals Filing for Bankruptcy
The Bankruptcy Process in Virginia
There is never an ideal time to declare bankruptcy. However, if you are unable to pay off what you owe within five years, filing for bankruptcy can help you to lessen the negative impact on your situation and help you get back on track.
In Virginia to begin the filing process, gather all of your financial records, including monthly expenses, debts, assets and annual income. This information is crucial to give the courts an accurate picture of your circumstances. Failure to provide all necessary information can result in your petition being denied.
In some cases, Virginia property owners can find exemptions from bankruptcy. Currently, under Virginia law, a debtor may claim a homestead exemption for their principal residence of up to $25,000. A debtor may also be entitled to exempt an additional $5,000 in real and personal property, or $10,000 if the debtor is 65 years or older. Furthermore, a debtor may be able to claim another $500 for each dependent.
At least six months before you file for bankruptcy, eliminate unnecessary spending. Do not run up the balances on your credit accounts. You’ll also need to complete an approved credit counseling course, usually online or over the phone. Credit counseling is necessary to help you learn financial literacy and help you learn better financial habits. Once you complete the course, you’ll receive a certificate of completion to include in your filing. If you don’t have the certificate of completion from the credit counseling course that you took, the courts will reject your bankruptcy petition.
Work With an Experienced Virginia Lawyer
Hiring a local bankruptcy lawyer in Virginia during this process can help reduce the costly risks of self-representation in court. An experienced bankruptcy lawyer understands state and federal bankruptcy laws. He or she can help you understand which laws apply to your case, especially which debts that can be discharged or can’t be discharged. An experienced Virginia attorney can also offer you guidance to improve the outcome of your case.
Keep in mind that there are debt management alternatives and financial resources that may benefit you more than bankruptcy, such as debt consolidation. Though bankruptcy is an attractive solution, it is best as a last resort. Do you need immediate help? Then one of our experienced lawyers in Virginia can guide you through the entire bankruptcy process. We can even help you connect with an attorney across Virginia state lines.
Submit a request online or call us today at (866) 345-6784 to get in touch with an experienced lawyer in your area!