If you have significant unpaid debts, you know how stressful this situation can be. Calls from harassing creditors, sudden wage garnishment, and threats of lawsuits are just some of the issues you may be facing. When you pair these stressors with being unable to afford basic expenses, it can make life extremely difficult.
The good news is that for people who are struggling under the burden of debt, chapter 7 bankruptcy can offer a huge relief from debts and the stress they bring with them. To file, you will need to take the first step and work with a Virginia bankruptcy attorney. At S&R Law Firm, our bankruptcy attorneys are experienced in helping individuals determine whether chapter 7 is right for them and in guiding them through the process.How Can Chapter 7 Bankruptcy Help Me?
Chapter 7 bankruptcy allows qualifying individuals to quickly wipe out many of their debts. In just three to four months, you can start with a clean financial slate and begin rebuilding your credit. You can use Chapter 7 to eliminate unsecured debts including credit cards, medical debts, and personal loans. During Chapter 7 bankruptcy, you can also keep your car or home as long as you stay up to date on your payments.
Chapter 7 bankruptcy also stops creditors from taking action against you. As soon as you file for chapter 7, an automatic stay is put in place. This prevents creditors from calling you or proceeding with lawsuits, wage garnishments, or judgments against you. It will also stop any negative reporting on your credit report and requires creditors to report all discharged debts.
Even if you file for Chapter 7, you will be able to keep most personal property, pensions, and some retirement benefits (though this can vary). A common question we get at our firm is: Can I keep my car if I file Chapter 7 in Virginia? Usually you can. In addition, any public benefits you receive including welfare, Social Security, worker’s compensation, and unemployment insurance are protected.
There are many stigmas around filing for bankruptcy but doing so can actually help you in a variety of ways. While your credit score may drop initially, your credit will often markedly improve simply due to discharging your debts. Many clients tell us that they receive more credit card offers after filing for bankruptcy than they did prior. Although bankruptcy will stay on your credit report for 7-10 years, in most cases you will be able to buy a car immediately after filing and a home within two years.Can I Lose My Home Under Chapter 7?
Something that often comes into question with chapter 7 bankruptcy is whether you will be able to keep your home. In general, if you are behind on mortgage payments, you could lose your home even if you file for chapter 7. While chapter 7 can stall foreclosure, mortgage companies often file motions in Virginia bankruptcy court to lift the automatic stay so that they can sell your home. However, if you are up to date on your payments and do not have equity, you will likely be able to keep your home. A Virginia bankruptcy attorney can be of great help in securing your home and other property.
If you are behind on your mortgage, filing chapter 13 is a different option worth pursuing. Under chapter 13, your debt is restructured, and you are put on a payment plan. Often this will allow you to keep your home as long as you make regular payments and repay any missed payments through the payment plan.
In the unfortunate circumstance that you do lose your home due to bankruptcy, S&R Law Firm can help you surrender the property to the mortgage company so that your mortgage debt is discharged.Qualifying for Chapter 7
To take advantage of chapter 7, you will first need to qualify. A common question we often get at our firm is: how much do you have to be in debt to file Chapter 7? This is an important question that a bankruptcy lawyer serving Virginia can help you with. But in general,
to determine this the court will start by reviewing your budget and expenses as well as your gross household income.
They will then compare your income to the median state income in Virginia. If you earn more than the state median and are able to repay 25 percent of your unsecured debt, you will not be able to file for chapter 7. If your net income is more than your expenses, you may have to file for chapter 13.Which Debts Cannot be Discharged?
Unfortunately, some debts cannot be discharged under chapter 7, and while you will not have to pay creditors before your case is resolved, once your case is closed they will be able to collect from you again.
Debts that cannot be discharged include:
- Tax debts
- Most student loan debt
- Alimony debt
- Child support debt
- Property dues to homeowners or condo associations (if you are surrendering the property)
- Personal injury or death debts from a DUI
- Criminal or civil offense debts (ie: traffic tickets, fines)
Sometimes, a creditor may challenge your discharge request, but this is rare. If you do find yourself facing this issue, contact a Virginia bankruptcy attorney right away.Working with a Lawyer
If you are facing considerable debt and are considering Chapter 7 bankruptcy, S&R Law Firm can help you understand your options and guide you through the process to ensure that you get the best possible outcome. To find out more about whether bankruptcy is right for you, contact a bankruptcy attorney in Virginia for a free consultation.
Get in touch at 703-273-6431.