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Filing Chapter 13 Bankruptcy in Virginia

Bankruptcy laws passed in 2005 have made it more difficult for many debtors to file Chapter 7 Bankruptcy in Virginia. Filers who do not qualify for a Virginia Chapter 7 Bankruptcy, however, may be able to restructure their debt payments by creating a 3 to 5 year Chapter 13 debt repayment plan.

Chapter 13 Bankruptcy will not allow you to discharge your unsecured debts immediately, but it will allow you to retain certain assets and potentially stop a home foreclosure.

Individuals, including the self-employed or those operating an unincorporated business, may file Chapter 13 Bankruptcy in Virginia. To file a Virginia Chapter 13 Bankruptcy the individual must have unsecured debt which is less than $360,475 and secured debt which is less than $1,081,400 (11 U.S.C. § 109(e)).

Federal bankruptcy laws have been created to allow filers to retain certain assets so they can "move on" financially after the bankruptcy is complete. Assets which are excluded from the bankruptcy process are outlined in federal and state bankruptcy laws, and each state has determined whether bankruptcy filers may choose the federal exemption list or the state exemption list. If you are filing a Virginia bankruptcy, you must use Virginia's state bankruptcy exemptions.

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Filing Chapter 7 Bankruptcy in Virginia

Virginia Bankrutpcy Attorney

Chapter 7 Bankruptcy in Virginia is the simplest and easiest way for you to discharge unsecured debts. The downside, if you have non-exempt property, is that a court-appointed trustee will be assigned to liquidate your assets and use the proceeds from the sale to repay your creditors.

Chapter 7 Means Testing In Virginia

Not all debtors are able to file Chapter 7 Bankruptcy in Virginia. To file Chapter 7 Bankruptcy in Virginia your median income must be below the average income of other families of similar size in the state of Virginia.

If you meet the median income requirements you may be able to file Chapter 7 Bankruptcy. If your income is above the median income for your state, you will have to complete additional Virginia Chapter 7 means testing.

The Median income for Virginia beginning March 15, 2011, for a single wage earner was $50,296. For a two person family it was $63,613 and for a family of three it was $73,269. For a family of four it was $86,990.

The second step in Chapter 7 means testing calculates your family's disposable income or the income you have left after paying your "allowable" monthly expenses. Disposable income is calculated by subtracting priority debt, taxes owed, mortgage payments, and school tuition- up to a threshold limit. After the calculation, if you would be able to pay $100 per month to your unsecured creditors or $6,000 within the next 5 years, you may have to file a Virginia Chapter 13 Bankruptcy.

If you cannot pay $6,000, but have enough disposable income to contribute 25% to your unsecured debt over the next 5 years, you may also have to file Chapter 13 Bankruptcy in Virginia. If you do not have sufficient funds to make these payments, you may be allowed to file Chapter 7 Bankruptcy.

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What debts are not discharged by filing bankruptcy in Virginia?

Unfortunately, many debts are not discharged by filing either Chapter 7 or Chapter 13 Bankruptcy in Virginia. Debts not discharged must be paid. Bankruptcy in Virginia does not discharge the following debts:

  • -Child support or spousal support payments
  • -Debts for personal injuries (including driving while intoxicated by drugs or alcohol)
  • -Student loans (exceptions may be made if you can prove that there would be an undue hardship if it was repaid)
  • -Fines or penalties for any criminal offenses, including traffic fines
  • -Income tax debts (from the past 3 years)
  • -Debts omitted from the bankruptcy documents

Debts not discharged by filing a Virginia Chapter 7 Bankruptcy case (if the creditor challenges the discharge)

  • -Debts incurred from larceny, breach of trust or embezzlement
  • -Debts from the malicious or willful injury of another person or their property
  • -Credit purchases of $1,150 or more for luxury goods or services within 60 days of filing Chapter 7 Bankruptcy in Virginia
  • -Debts incurred from fraud
  • -Debts owed from a divorce decree or settlement (may be discharged if the court determines the benefit you would receive by the discharge outweighs the detriment to your ex-spouse)

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Virginia Bankruptcy Lawyer

Find which Virginia Bankruptcy is right for you

If you have been through an unexpected death, divorce, job loss, or medical crisis, you may be facing a financial crisis. Did you know that filing bankruptcy in Virginia may allow you to either discharge certain types of unsecured debt or allow you to create a 3 to 5 year debt repayment plan? Filing a Virginia Bankruptcy may also allow some debtors to stop home foreclosure, harassing creditors, wage garnishments and bank account levies.

Virginia bankruptcies are an important decision which should not be made without first talking to a Virginia bankruptcy lawyer. Bankruptcy lawyers can review your financial information and determine whether Chapter 7 Bankruptcy, Chapter 13 Bankruptcy or another Bankruptcy Alternative is right for you. Stop aggressive creditors by completing our confidential and free legal evaluation.

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Thinking about filing bankruptcy in Virginia?

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