Making the critical decision to file for bankruptcy is daunting and often fraught with uncertainty and anxiety.
People have many concerns going into this process, including whether or not they will lose their most significant asset—their home—in the process.
The short answer to this question is that with the help of a qualified bankruptcy lawyer in their corner, most debtors can keep their homes even though they file for bankruptcy.
But just as every home is different, every bankruptcy is different, and the answer to that question relies on several factors, which the article below will outline.
Understanding Virginia Bankruptcy Law
Filing for bankruptcy makes sense when a person or business has a great deal of debt and very little or no cash. It is a legal way to eliminate the burden of debt, and many people are able to successfully satisfy all of their debts by going through the process.
Here are some things to understand about Chapter 7 Virginia Bankruptcy law.
- The so-called bankruptcy “fresh start” is intended to allow a debtor to wipe out their debts.
- In this process, a trustee determines if any non-exempt assets are available for distribution to creditors.
- If the trustee determines there are non-exempt assets, the trustee makes an offer for you to “purchase” those assets from the estate or collects those assets, sells them, and then pays the debtor any of the exempted money.
- Depending on whether they file jointly or separately, married couples have different exemptions available.
Not all debts can be discharged by Chapter 7 bankruptcy. Here are some debts that must be repaid regardless of bankruptcy status.
- Student loans
- Several tax obligations
- Child support arrearages
- Spousal support payments
Filing Chapter 7 in VA: Can I Keep My House?
Now, consider your own situation.
- Are you up to date on your payments? Any mortgage payments must be made current, so it will be harder to keep your house if you are significantly behind in payments.
- Do you have equity in your home? If so, unless the equity is fully exempt, the trustee may seek to liquidate it for the unsecured creditors and pay you the exempt amount.
Here is the process for protecting your home while filing for Chapter 7 bankruptcy.
- First, to keep a secured debt such as your home, it may be advisable to reaffirm that debt.
- All debt on the mortgage must be current, so you must be sure to pay any delinquent payments.
- If there is equity in your home and you wish to keep it, talk to an attorney about the possibility of filing for Chapter 13 bankruptcy to save the home.
Contact Us
Don’t go into a bankruptcy case full of doubt about your future. The team at WhitbeckBennett has decades of experience helping debtors in Virginia file for Chapter 7 while still retaining their homes.
Having an experienced bankruptcy lawyer in your corner is the best way to ensure your case runs smoothly and you can emerge unburdened on the other side of the process.
We are accustomed to representing clients in Virginia both in and out of court. Our services are always confidential, and our rates are competitive.
Call 800-516-3964 or contact us here to set up your initial consultation with WhitbeckBennett today.
By Robert Moreton
Partner
Robert D. Moreton is a Partner at WhitbeckBennett focused primarily on family law and bankruptcy. Before joining the firm, Robert co-founded a small law firm in 2012, where he gained invaluable litigation experience representing clients throughout Northern Virginia. In more than a decade of practice, Robert gained particular familiarity with the complex interplay of divorce and bankruptcy and possesses unique experience practicing in bankruptcy and state court.