The Virginia Verdict Review

Comprehensive and Informative Commentary on State and Federal Legal Matters

Tag Archives: debt relief

Bankruptcy Law: Filing Chapter 7 Bankruptcy

When considering bankruptcy, it is imperative that one considers all of the options available and the unique, intricate aspects of each.  In this particular post, we will explore the characteristics of one of the most popular forms of bankruptcy–Chapter 7.  In particular, we will focus on the process through which ones files for Chapter 7 bankruptcy in Virginia.  Since I can only speak to what I know, all of the procedures outlined below are based off the practices adhered to here at Westlake Legal.

As you might have guessed, the bankruptcy process often begins in an attorney’s office.  If you feel you want to discuss your options for filing for bankruptcy relief in the Commonwealth, please feel free to schedule an appointment with our firm, Westlake Legal Group.  Regardless of which firm you chose though, be sure to bring a complete list of your assets and your current bills with you. Typically, you will be asked to fill out a questionnaire with regard to those assets and bills.  In our office, we will also ask you to authorize a credit check that will be ordered and sent to us.  The attorney will also provide you with certain required notices to help better inform you of your responsibilities down the line.

After we get your information, we will apply what is called the “means test.” This  test, which is based on income, will give a preliminary determination of your eligibility to apply for relief under Chapter 7. You are automatically eligible to wipe out your debts with a Chapter 7 bankruptcy if you are below the average income for your family size inVirginia.  As of April 19, 2010, the averages for Virginia are:

Family Size* One Person Two People Three People Four People Five People
INCOME $48,190  $64,890 $73,887 $85,633   $93,133

*Add $7500 for each person in excess of four

If your family income falls below those listed above, you are automatically entitled to relief under Chapter 7. If you exceed those limits, an additional analysis needs to be performed.

If your family income exceeds the average as identified above, you may still be eligible for a Chapter 7 filing. To determine that, Westlake Legal will evaluate your specific case. We will determine your “disposable income” after deducting certain expenses from your overall pay.

If your projected disposable income over the next five years is less than approximately $175 per month, you will likely be eligible for Chapter 7 relief. If you have more than approximately $175 disposable income per month, you may only be allowed to use Chapter 7 if you can demonstrate special circumstances, such as on-going medical situation. Otherwise, you may have to consider filing under Chapter 13.

Once we have determined that you are eligible for filing under Chapter 7, we will ask you to take an online credit counseling course. This is usually done in our office. Once completed, we will prepare the necessary paperwork, with your assistance, and file with the Bankruptcy Court.

Once we have filed, you will be required to take another online course, this one on financial management. This is also usually done in our office. This must be completed before you can receive a discharge.

Approximately 30 days after filing, the Trustee will conduct a hearing to verify the information placed in the Bankruptcy Petition and to ask questions about any equity in highly valued assets. After the Trustee’s hearing, the Trustee sends notice to creditors and gives them approximately 60 days to make inquiry and object to the discharge, if a reason exists. After the 60 days, assuming there are no objections, the Court enters a final Order of Discharge and the case is ended.

For more information on the Chapter 7 process, or if you would like to schedule a personal consultation, please feel free to contact us at any time.

We are a Debt Relief Agency.
We help people file for Bankruptcy Relief under the Bankruptcy Code.

 

Bankruptcy Law: Chapter 7 vs. Chapter 13

For anyone considering seeking bankruptcy relief, understanding the bankruptcy system is of utmost importance.  For this reason, we have created a number of short articles that briefly explain some of the most essential aspects of the bankruptcy process.  In this particular post, we will be discussing the difference between Chapter 7 and Chapter 13 bankruptcy.

The laws regarding bankruptcy are found in Title 11 of the United Stated Code. Each Chapter of the Title deals with certain parts of the bankruptcy process. For example, Chapter 1 provides general provisions and definitions as they apply to the bankruptcy process. Several chapters deal with specific relief for specific types of debtors. Chapter 11 provides the rules and law for the reorganization of large companies that want to keep operating. Most individual debtors are concerned with either Chapter 7 or Chapter 13.

Chapter 7 is the most common chapter used by individuals in debt. It is considered to be the quickest and least expensive way of obtaining relief. When filing under Chapter 7, most of your unsecured debts are discharged–meaning they are eliminated and cannot be collected.  Usually you cannot eliminate taxes, student loans, or child support. You also may not be able to eliminate some debts associated with a divorce. At Westlake Legal Group, we can analyze your debts and give you an accurate prediction of the likelihood of their discharge.

Chapter 13 is referred to as an adjustment of debt and is used when a debtor has regular income and can pay his or her living expenses, but cannot make all the payments on his or her regular, scheduled debts. Essentially, the debtor cannot make all his payments but can make some contribution to paying back his debt. Often people with higher incomes are required to initially file under Chapter 13. Under a Chapter 13 filing, the Court adopts a payment plan you can afford. The plan stops the accrual of interest on unsecured debt and can require payments for up to five years. If all the debt can be paid off sooner once interest is stopped, the plan may be for a shorter period.  One is eligible for Chapter 13 relief if his or her unsecured debts are below $360,475 and his or her secured debts are less than $1,081,400.

For more information regarding Chapter 7 or Chapter 13 bankruptcy, follow this link to a helpful site, or give us a call at Westlake Legal Group to set up an appointment.

Pursuant to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), please be advised that:

We are a Debt Relief Agency.
We help people file for Bankruptcy Relief under the Bankruptcy Code.