The Difference Between Chapter 7 and Chapter 13 Bankruptcy in Virginia
People all over the United States are experiencing significant financial hardship. Due to the shutdowns that have happened all around America because of coronavirus, many Americans have faced financial hardships. In the last two weeks, a record number of Americans have filed for unemployment benefits. According to a recent poll, half of all Americans report financial hardships due to the coronavirus outbreak. With increasing financial pressure and business closures, many Americans are considering filing for bankruptcy.
Contact Our Western District of Virginia Bankruptcy Lawyers
The near-total shutdown of the American economy has pushed many Americans to consider bankruptcy for the first time. If you are not sure whether or not you qualify for bankruptcy, the legal team at Straw Law Firm can help. We can advise you as to which type of bankruptcy will work best in your situation. Many people file Chapter 7 or Chapter 13 bankruptcy. Contact our law firm as soon as possible to schedule your initial consultation.
Filing for Bankruptcy in the Western District of Virginia
The United States Bankruptcy Court Western District of Virginia has office locations in Roanoke, Lynchburg, and Harrisonburg. When you decide to file for bankruptcy, it is important to file in the right location. There are 94 different federal judicial districts that handle bankruptcy matters. You will need to file for bankruptcy at one of these federal courts, not in Virginia state court. If you live in the western part of the state, you will need to file in the Western District of Virginia.
The Primary Purposes of Bankruptcy
Bankruptcy laws protect consumers as well as troubled businesses. Bankruptcy laws allow people to have a fresh start in life by relieving the debtor of most of their debts. The bankruptcy court will help debtors repay creditors in an orderly manner to the extent that they can.
Every type of bankruptcy has different regulations and rules. In some bankruptcy cases, the debtor can reorganize his or her debt and establish a repayment plan. In other cases, the debtor will need to liquidate their property to pay back the debt. In all types of bankruptcy, however, the court will stop your creditors from harassing you while you put together a plan to make repayment.
The Process of Filing for Bankruptcy in the Western District of Virginia
Bankruptcy cases normally begin when the debtor files a petition with the bankruptcy court. An individual has the right to file for bankruptcy in the Western District of Virginia, or a husband and wife can file for bankruptcy together. Or, a business or corporation can file for bankruptcy. Those who file for bankruptcy must provide statements of their income, liabilities, assets, and the names and addresses of all of their creditors as well as how much they owe.
When you file a bankruptcy petition, the court will automatically stay or prevent debt collection actions against you and your property. As long as a stay remains in effect, creditors are not able to bring or continue lawsuits, make phone calls that demand payment, or make wage garnishments. The clerk of the bankruptcy court will send the debtor’s creditors notice of the bankruptcy petition.
Understanding a Chapter 7 Bankruptcy
Chapter 7 and Chapter 13 are two of the most common types of bankruptcy. Chapter 7 bankruptcies are liquidation bankruptcies. You will need to meet certain income requirements to become eligible for Chapter 7 bankruptcies. If you make too much income, you will need to file for a Chapter 13 bankruptcy instead of a Chapter 7 bankruptcy.
After filing a Chapter 7 bankruptcy, the bankruptcy court will issue an automatic stay. This process will immediately stop most of your creditors from pursuing debt collection efforts. The court will then appoint a bankruptcy trustee to administer your case. The trustee will review your bankruptcy papers and all of your supporting documents.
In Chapter 7 bankruptcy, the trustee’s job is to take account of all of your assets. They will sell your nonexempt property to pay back your creditors. If you do not have enough nonexempt assets to pay your debts, your creditors will receive nothing in terms of payment. Many debtors seek after Chapter 7 bankruptcy because it offers them many benefits. However, this type of bankruptcy only works for debtors who are low-income with little or no assets or property.
Chapter 7 bankruptcies can also work for debtors whose discharged debt exceeds the value of their assets that the trustee will sell to pay off debts. This is especially true if the trustee applies the funds to nondischargeable debt, such as support arrearages or income tax. The skilled bankruptcy lawyers at Straw Law Firm can help you determine the best type of bankruptcy for your circumstances, and we can help guide you through the process.
Chapter 13 Bankruptcy
Chapter 13 bankruptcies are available for debtors who don’t qualify for Chapter 7 bankruptcy. Chapter 13 bankruptcies are known as reorganization bankruptcies. Unlike in a Chapter 7 bankruptcy, those filing for Chapter 13 bankruptcy do not need to liquidate all of their assets to repay debtors. Instead, you will need to reorganize your debts and work with the trustee to create a plan to repay the debts, usually over a 3 to 5 year time period.
When debtors have non-dischargeable debts such as child support or alimony that is in arrears, they may benefit from filing a Chapter 13 bankruptcy because they will have time to pay off the debt. Also, those who have fallen behind on their house or car payment and just need some time to get caught up may benefit from filing a Chapter 13 bankruptcy. Only debtors who have more than $419,275 in unsecured debt, or $1,257,850 in secured debt will be eligible for a Chapter 13 bankruptcy.
Contact Straw Law Firm Today
If you are having difficulty making your monthly payments, you might benefit from filing for bankruptcy in the Western District of Virginia. At Straw Law Firm, we can advise you as to which type of bankruptcy filing works best for you. We can walk you through the entire process. Contact us today to schedule your free initial consultation.
Leave a ReplyWant to join the discussion?
Feel free to contribute!