Virginia Bankruptcy Lawyer

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If you have decided to embark upon the difficult process of bankruptcy, you need an experienced attorney to help you. Bankruptcy has always been a complicated process, but recent changes to the law have made it even more so. You need an experienced attorney to guide you through the system, so you can make the best choices in your situation.

You and your attorney will first have to decide what type of bankruptcy you can and should obtain. Chapter 7 is known as liquidation plan, while Chapter 13 is commonly called the wage earner program. If you have no real assets to protect and you have a low income, you will likely qualify for Chapter 7. You now have to pass a means test to gauge whether or not you can afford to pay back your creditors.

Federal bankruptcy laws stipulate that you must take a "means test," in order to determine whether you are eligible to file for Chapter 7 bankruptcy. If your income is below the median income for families in Virginia, based on Census Bureau statistics, you will be eligible. If you make more than the median income for families in Virginia, your income over the past six months is considered, along with mortgage and car payments, back taxes and child support due, and school expenses up to $1,650 per year. You won't be eligible for a Chapter 7 bankruptcy if, after deducting these amounts, and the living expenses provided in the Internal Revenue Service's national collection standards, you can still pay at least $6,000 ($100/month) to unsecured creditors over five years. If you don't qualify for a Chapter 7 bankruptcy, your only option would be a Chapter 13 bankruptcy.

People who are filing for bankruptcy in Virginia have a certain amount of exemptions, or valuables that they can keep. For the homestead they have an exemption worth $5,000 plus $500 per dependent, which includes a mobile home. Insurance and pensions are also exempt, as well as the property of a business partnership. Clothing is exempt up to $1,000 and family portraits and heirlooms are exempt to $5,000. A vehicle is exempt to $2,000, and tools of trade that are needed in an occupation or education are exempt to $10,000.

If you do not pass the means test, however, you will be denied Chapter 7, and left with only the Chapter 13 option. If you have a home or a vehicle which you want to keep, and its value is not covered in the Virginia exempt property statutes, Chapter 13 is the only way you will be allowed to keep the property. Under Chapter 13, you must continue to make payments to your creditors. Chapter 13 will also enable you to catch up on back payments.

Under bankruptcy laws, government-guaranteed student loans, punitive damages, child support and alimony, recent back taxes, and recent purchases of luxury goods are never allowed to be discharged.
There are two other types of bankruptcy, Chapter 11 and Chapter 12, that are for family farms and business reorganization plans. If you believe that your situation may qualify you for one of those forms, you should discuss your finances with a Virginia bankruptcy attorney.

The cost for filing is currently $200 or less for both Chapter 7 and Chapter 13. Your typical monthly bills, like utilities, will not be covered. Your utility company is not allowed to cut you off because of a bankruptcy, but they can request a deposit for service. If you have a co-signer on a loan, your bankruptcy will not release them from the debt.
Once your attorney has filed your bankruptcy paperwork, bill collectors are no longer allowed to contact you. Your bankruptcy lawyer will handle the notification. Your case should be discharged within four months of filing for Chapter 7. Chapter 13 discharges when you have completed your repayment plan.


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