Bankruptcy
"The principal purpose of the Bankruptcy Code is to grant a 'fresh start' to the 'honest but unfortunate debtor.'"
United States Supreme Court, Marrama v. Citizens Bank of Massachusetts, 127 S.Ct. 1105 (2007).
We are a debt relief agency and we help people file for bankruptcy under the bankruptcy code. Our firm specializes in consumer bankruptcies. Bankruptcy is a procedure created by federal law that helps honest debtors get a fresh start on their financial lives. The two most common kinds of consumer bankruptcies are "Chapter 7" and "Chapter 13" bankruptcies.
Chapter 7 Bankruptcy
In a Chapter 7 bankruptcy, your unsecured debts, like credit cards, medical bills, and payday loans, are wiped away by the court. In exchange, the court has the right to take any property you own that you can't protect with legal "exemptions." In Virginia, there are a number of legal exemptions that may be available to protect certain property. For example, there is a "homestead exemption" which protects property of your choice up to a certain value, and there are other exemptions for things like wedding rings, family bibles, and pets. Many people are able to protect all of their assets with exemptions, in what is called a "no asset bankruptcy". The court appoints a "trustee" to take possession of your unprotected property, and the trustee sells any valuable property and distributes the proceeds to your creditors. Afterwards, your debts are discharged and the case is closed. On average, a Chapter 7 takes about three months from filing to closing.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is different from a Chapter 7 in that you get to keep all of your property, but make monthly payments to the court over a period of 3 to 5 years, which are used to help pay off your debts. In a Chapter 13, you may be able to catch up on payments on your house or car so that you will not lose them in the bankruptcy. After you have faithfully made payments for the 3 to 5 year period determined by your "reorganization plan," the bankruptcy is closed.
Some debtors with relatively high household incomes are required to file a Chapter 13. Others choose to file a Chapter 13 because it enables them to keep certain assets that they might lose in a Chapter 7, to discharge debts that wouldn't be dischargeable in a Chapter 7, or to "strip off" a second mortgage and turn it into unsecured debt.
Contact us today to schedule an appointment and we will meet with you to evaluate your financial situation and help determine whether a Chapter 7, a Chapter 13, or some other solution is right for you. The initial consultation is free.