Bankruptcy in Virginia
Finding a bankruptcy attorney will bring you relief in four ways:
- First, you’ll know you have a qualified professional on your side, someone who will represent your best interests and show you what to do next. Whew!
- Second, creditor harassment will cease as soon as the bankruptcy court accepts your petition and issues an “automatic stay”, instructing creditors to stop all efforts to collect on your debts. Whew!
- Third, your attorney will show you how to protect as many assets as possible. Whew!
- Fourth, you will be given a clean slate when your bankruptcy is discharged. Whew!
For all of these reasons, we’ll use this article to explain how Virginia bankruptcy law is unique, discuss whether a Chapter 7 or a Chapter 13 bankruptcy is right for you, provide guidance in selecting an attorney, and give you a head start in working with your bankruptcy lawyer.
How Virginia Bankruptcy Law is Unique
In Virginia, as in all other states, federal law mandates that certain procedures are followed, as you go through the bankruptcy process. Part of this procedure is selecting either the Chapter 7 or Chapter 13 path; we’ll discuss this in the next section below.
However, unlike some states, the commonwealth of Virginia doesn’t offer federal exemptions. Instead, all Virginia residents are only able to protect assets using the state offered exemptions such as $5,000 of equity in a home ($10,000 if you’re married and filing jointly and $500 addition equity permitted for each dependent).
The home exemption is an odd amount because Virginia also allows you to protect $6,000 in a car ($12,000, if you’re married and filing jointly). So, you can protect more equity in a car, than in your home?
Fortunately, there are other ways to protect assets. Ask your bankruptcy lawyer about protecting your home with “tenancy by the entireties”, protecting your retirement accounts, and protecting your personal possessions.
Is Chapter 7 or Chapter 13 Bankruptcy Right for You?
Without study and extensive experience, it’s not easy to determine whether Chapter 7 or Chapter 13 bankruptcy is right for you, so be sure to seek legal counsel regarding your individual situation. There are always exceptions and rules for special circumstances.
That being said, the very simplistic way to determine whether Chapter 7 is right for you is by finding out the median income for your state. In this case, the commonwealth of Virginia’s median income ranges for $64,288 for a single individual filer to $87,498 for a family of four. If your income is less than the median amount, you qualify for Chapter 7.
Also, in a very simplistic way, if you don’t qualify for Chapter 7, you likely would be best suited filing for Chapter 13 bankruptcy. There are other bankruptcy chapters, but they are typically reserved for businesses.
Both 7 and 13 offer a clean slate and an end to creditor harassment; however, the processes and time frames are different. Ask you attorney, the best chapter for you.
Selecting a Bankruptcy Attorney
One important way to select a bankruptcy attorney is to find someone who focuses his or her legal practice on bankruptcy and is an expert. Lawyers are not all the same; always choose one who is an expert in his or her field.
A second important way to find a bankruptcy attorney is to ask friends and family for referrals; in bankruptcy, that may prove to be difficult as both you and your loved ones may want to keep financial difficulties private. If you can get a referral, that’s great. If not, that’s okay too.
A third way to select a bankruptcy attorney is to interview a few bankruptcy attorneys and pick the one that feels right to you. An attorney may be an expert and competent, but if connection and communication aren’t there, it’s not a good fit.
How to Get a Head Start Working Bankruptcy Attorney
When you prepare to go to your medical doctor, you may write down your symptoms so you remember everything. Do the same thing before you meet with your bankruptcy attorney.
Fill out all the requested paperwork, pull together old bills, debts, income statements, anything related to your finances. The more information you have, the better.
Where to Get Help Filing Bankruptcy
Consult with a qualified Virginia bankruptcy attorney to determine how to protect your assets and whether bankruptcy is right for you. You’ll have a great head start if you gather your financials now.