Virginia Bankruptcy Laws should be known by every resident of the state of Virginia. Amidst the explosion of credit card popularity is the realization that bankruptcy laws have recently been modified so that some of the rules and provisions have become more difficult to comprehend. Virginia bankruptcy laws, under the federal laws, have also implemented these modifications, and for a debtor who wishes to avail of government protection when the financial turmoil he is experiencing is too much to successfully file for bankruptcy, educating himself with the current bankruptcy laws is important.
The state of Virginia gives every debtor the right to represent himself in court. As is it, the US Bankruptcy Code and the state laws of the bankruptcy court are intricate, and a legal representation is necessary to ensure that your rights and interests are protected. Once you’ve obtained legal representation, the lawyer will now speak on your behalf and the all communication between you and the creditor can be redirected to your lawyer. It is important to choose a lawyer licensed to practice in the state of Virginia and is well-versed on bankruptcy cases to successfully handle the case.
One of the foremost decisions you are going to make when considering bankruptcy protection is to choose the most appropriate type of bankruptcy program to fit your needs. If you opt to start anew financially, Chapter 7 should be for you. This program is also known as liquidation program because debts classified as dischargeable like medical bills, credit card bills, and personal loans can be released if your application is approved. A trustee assigned to your bankruptcy case is in charge of a liquidation sale where all non-exempt assets are sold, and the proceeds are distributed to the creditors according to priority structure. What debt remains after the sale will be totally wiped off. The eligibility criteria for Chapter 7 will not depend on the amount of debt, but rather on the monthly income of the debtor.
For debtors who want to pay for their debts, but just do not have the money to spare, Chapter 13 may work for these debtors. Chapter 13 is called debt reorganization. Based on the debtor’s preference, he is required by the bankruptcy court to submit a repayment plan upon the submission of his application. The court’s approval is the final decision regardless of the creditor’s protest on the terms of the plan. The trustee appointed by the bankruptcy courts will oversee to the monthly payments of the debtor. It is the duty of the debtor to give his payments to the trustee and the trustee, in turn, will pay the creditors. A minimum period of 3 years is given and a maximum is set at 5 years to pay for the debts you owe to creditors.
What are exemptions? Virginia bankruptcy laws define exemptions as those assets that are protected from the creditors during liquidation. Provided here is a partial list of the state exemptions:
• A debtor’s home provided that equity balance does not exceed $5,000;
• A vehicle worth $2,000;
• Clothing worth $1,000;
• $5,000 for furniture and other items;
• Wedding and engagement rings;
• Tools of trade worth $10,000;
• 75% of unpaid wages; and
• Other personal benefits.
There are more items to this list than what is presented here. Consult your lawyer to familiarize with all the properties you can keep.