When it comes to Bankruptcy, Virginia is in line with all the other states in offering three major types of bankruptcy. These are Chapters 7, 11 and 13. While all three are available, as a bankruptcy lawyer in Fredericksburg VA will tell you, the two main choices are Chapter 7 and Chapter 13. What type you select, however, will depend upon individual circumstances and eligibility. It is also important you understand any changes in the law that will affect your chances of being able to access this type of debt-easing device. This is particularly true in the case of Chapter 11 bankruptcy in Virginia.
The laws governing bankruptcy are federal. The latest version of the Bankruptcy Act dates to 2005. Virginia follows this Act but has more in common with those states that apply it with greater severity. This has resulted in a reduction of eligibility for certain types of bankruptcies, particularly Chapter 7.
Chapter 7 Bankruptcy in Virginia
Chapter 7 Bankruptcy is usually dubbed a “liquidation” bankruptcy. Under the guidance of a trustee, the debtor takes all non-exempt personal property and turns it into cash. This may even require the selling-off of possessions to pay off any creditors. Yet, before anyone can undergo Chapter 7, he or she must qualify. This means taking a Means Test. According to a bankruptcy lawyer in Fredericksburg, VA l this is a state average or median to determine eligibility. If you do not pass it, you will not qualify. If you do, be prepared to supply specific types of paperwork within a very tight deadline.
Unless you have a business, usually a rather large business, you will not qualify for Chapter 11. Like other forms of bankruptcy, Chapter 11 is designed to help pay down debt. It allows its debtors to pay off some of their business debts, eradicate other types of business debts and still keep the company, operation or business functioning. A bankruptcy lawyer in Fredericksburg VA can best inform you as to whether your corporation qualifies.
For some individuals, Chapter 13 offers them the best promise of escaping from debt. It is a “debt adjustment” form of bankruptcy. While the debtor can usually retain many of his or her personal assets, it is necessary to file a specific and viable plan on how to pay back the debts incrementally, over a 43 to 5 year period. As is the case with Chapter 7, the debtor will need to meet the terms of eligibility, pay specific costs and adhere to the schedules.
If you live in Virginia, you can declare bankruptcy under Chapters 7, 11 or 13. Talk to a bankruptcy lawyer in Fredericksburg VA before you decide on what to do. This will help you make the most applicable and viable decision. For more information, visit Andrews Law Firm today!