In Virginia, a common type of bankruptcy is Chapter 7. Yet, over the years, it has become more difficult to actually file under a Chapter 7 Bankruptcy in Alexandria VA. The state, while including some distinctive exemptions has increasingly made it more difficult for people to go this route.
What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy is a debt relief process or ?liquidation? bankruptcy. This indicates its nature ? the converting of personal property into cash or liquidating. A trustee is in charge of this type of debt reduction. He or she may decide to sell-off any non-exempt possession of the debtor to contribute to paying off the creditors.
Chapter 7 Bankruptcy in Alexandria VA
Virginia operates under the Federal 2005 Bankruptcy Act. Yet, in application this state aligns itself with those states that are stricter in rules and their enforcement. Everyone who files for Chapter 7 Bankruptcy must take a ?Means Test? to determine their eligibility. In VA this involves the courts looking to a state income median to determine if you should be able to manage to pay for or pay out rather than if you actually have enough money in your personal budget to pay off your debts. A Means Test Chart will determine whether you fit into the profile of someone eligible for bankruptcy. The chart will supply a base line for one member and up families to indicate the average amount. If you fall below the amount stated for the previous year, you will qualify for Chapter 7 Bankruptcy. If you are above it, you are expected to handle your creditors on your own.
As a result, the paperwork has intensified. You must supply:
- Proof of income – pay stubs going back 6 months
- Tax Returns (federal and Virginia): Last year?s tax returns, but also tax returns dating back for at least 4 years may be requested.
- Proof of attendance at a credit counseling briefing and a budget class.
- Picture ID: Usually a driver?s License
- Social Security Card
- Bank account statements: Current and up-to-date records
- Mortgage Documents
- Credit Card Statements
- Creditors: a complete list including contact information
This makes having an attorney essential if you plan to supply the necessary schedules within a very rigid time frame. Moreover, an attorney will be able to explain to you what exemptions apply. In Virginia, you will not be able to use the federal bankruptcy exemptions, only those of the state.
If you are considering applying for Chapter 7 Bankruptcy in Alexandria VA, be sure to understand your chances. Talk to a lawyer to determine whether you will qualify under the Means Test. He or she can guide you through the process to achieve your goal. For more information.
