There are many contributing factors that are associated with financial troubles. The most common reasons include heavy debt, loss of a job, divorce, home foreclosure, or serious illness.

In fact, the average credit card debt in Virginia is a whopping $6,397 per person. In addition, foreclosure rates are also as staggering, one out of every 2,704 VA homes is currently in foreclosure.

If you find yourself struggling with similar situations, then you are probably facing other personal issues that come with dealing with debt. The fear of losing your car, house or your money can drain a person emotionally & physically. You may have even considered Filing for Bankruptcy .

If you are thinking “Is Bankruptcy Best For Me?” you are undoubtedly not alone. Around a million people file bankruptcy each year in the US. Bankruptcy is a device provided by the US Government to help struggling Americans find relief from overwhelming debt. You may want to research bankruptcy if it’s best for you.

What Is Bankruptcy?

Bankruptcy offers people the freedom to resolve their debt while still working with lenders in a legal capacity. It is initiated by a person filing a Petition with their nearest bankruptcy court. The Petition can be filed by an individual or by spouses jointly. When the bankruptcy is settled, the filer will ‘exit’ with a fresh new start.

Throughout the bankruptcy, a trustee is appointed to oversee the deatils of the case. His or her duties differ and depend on whether the person has filed for Chapter 13 or Chapter 7 bankruptcy.

Did you know that Virginia ranks #24 in the nation for bankruptcy filings. In 2017 the number of personal bankruptcies was approximately 290 out of every 100,000 residents.

What Is The Difference Between Chapter 7 And Chapter 13?

People in Virginia, who claim bankruptcy, will elect to file under Chapter 7 or Chapter 13 of the U.S. Bankruptcy Code. What is the difference? Look below for more information

Chapter 7

The trustee of the bankruptcy will liquidate the assets, such as cars, homes, and other property of value in a Chapter 7 Bankruptcy proceeding, In exchange for dissolving all past due debts.

The proceeds collected during liquidation will be used to repay debtors that were listed on the bankruptcy filing.

Chapter 13

If you have the means to pay some of your debts, a chapter 13 bankruptcy plan may work for you. The individual will be allowed to retain his or her valuable assets over a 3- to 5-year period.

In order to decide which chapter a person will file, they will have to determine their ability to repay using the Bankruptcy Means Test.

What Is A Bankruptcy Means Test?

The objective of the Bankruptcy Means Test is to determine who is eligible to apply for debt forgiveness through a Chapter 7 Bankruptcy. It takes into account your:

  • income and expenses
  • household size and composition
  • debt-to-income ratio

If you do not qualify for Chapter 7 bankruptcy, you will be able to file for Chapter 13, as above-described.

What Are Bankruptcy Exemptions?

The federal bankruptcy exemptions are a list of exclusions by Congress that are available to filers in specific states. These exemptions will determine what you are able to retain throughout and after Chapter 7. In a Chapter 13 situation, the exemptions will determine what amount you will have to pay certain financial institutions in your repayment plan.

Homestead, Personal Property, or Both

  • $5,000 plus $500 per dependent (if over 65 or a disabled veteran exemption is $10,000) for a residential property, personal property (in addition to other exemptions), or both. Must file homestead declaration prior to filing for bankruptcy (34-6).

Personal Property

  • Motor vehicles up to $6,000; wearing apparel up to $1,000; household furnishings up to $5,000; firearms up to $3,000; family portraits and heirlooms up to $5,000; burial plot; wedding and engagement rings, family Bible; animals owned as pets, provided they are not raised for sale or profit; and medically prescribed health aids.
  • Personal injury recoveries and causes of action.
  • Health savings accounts and medical savings accounts.
  • Surviving spouse (or minor children if there is no surviving spouse) may exempt up to $20,000 of deceased spouse’s personal property.


  • ¬†Greater of the following: 40 times the federal minimum hourly wage or minimum of 75% of disposable weekly earnings. Judge may approve more for a  low-income debtor.


  • Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans).  
  • IRAS and Roth IRAs to $1,283,025.
  • ERISA-qualified benefits to the same amount as allowed by federal bankruptcy law.
  • State employees.
  • County, city and town employees.
  • State police officers.
  • Judges.

Public Benefits

  • Crime victims’ compensation, unless seeking to discharge debt for treatment of crime-related injury.
  • Unemployment compensation.
  • General assistance and aid to blind, aged, and disabled.
  • Workers’ compensation.
  • Earned income tax credit.

Tools of Trade

  • Arms, uniforms and equipment of a military member.
  • Tools, books, instruments, implements, equipment, and machines, including motor vehicles, vessels, and aircraft, necessary for use in occupation or trade up to $10,000.
  • For farmer: tractor to $3,000, 1 wagon or cart, pair of horses, pair of mules with gear; fertilizer to $1,000; 2 plows, harvest cradle, 2 iron wedges, pitchfork and rake.


  • Life insurance proceeds, dividends, interest, loan, cash, or surrender value.
  • Group life insurance policy or proceeds.
  • Accident, sickness or industrial sick benefits.
  • Cooperative life insurance benefits.
  • Burial society benefits.
  • Fraternal benefit society benefits.
  • Group life or accident insurance for government officials.


  • Decedent’s family allowance for surviving spouse or minor children, up to $24,000.
  • Unpaid spousal or child support necessary for support.


  • Unused homestead.

Want to know if you can include Student Loans in Bankruptcy or Medical Bills in Bankruptcy? Check out our Bankruptcy FAQ’s section.

Filing Bankruptcy Alone vs. Filing With An Attorney

You are not required by law to hire an attorney to declare relief. Individuals are permitted to represent him or herself as a pro se debtor. You will simply contact the local bankruptcy court and obtain all forms and requirements directly through them. Going it alone is not recommended.

Filing Bankruptcy without an Attorney

A simple Chapter 7 filing that doesn’t have a lot of debtors or assets may be easy to manage on your own.

A basic bankruptcy that doesn’t require an attorney might look like:.

  • Your income is below the state median;
  • You have no property;
  • Your debts will be considered dis-chargeable.

Working With An Attorney

For most people, it is usually in one’s best interest to work with a bankruptcy lawyer. A bankruptcy attorney is there to represent you and not the creditors.

An attorney is also accustomed with exemption laws. Plus, they can come up with creative strategies to keep your assets through practical repayment strategies that are fair to everyone involved.

While you may have the fight and ability to manage a Bankruptcy on your own, it tends to make things a lot easier on an already stressful situation, especially when there is so much at stake.

What Does Bankruptcy Include?

Once you file for bankruptcy in VA, the courts put in place an order called an Automatic Stay. This order will stop debt collection calls, wage garnishments, and additional claims. Keep in mind that payments regarding child support and criminal cases will still need to be made during this time.

In any event, Bankruptcy will be able to include:

  • credit card debt
  • protection from eviction
  • avoidance of foreclosure
  • utility bills
  • medical expenses

Again, unless you are filing a complex Chapter 13 case, you will lose all assets associated with a Chapter 7 Bankruptcy protection. You will, however, be able to prevent any and all collections from occurring as long as they were incurred before the date of filing and discharge.

Final Thoughts And Considerations On Filing For Bankruptcy In Virginia

As you can see, there a lot of information associated with successfully filing for bankruptcy and then exiting it unscathed or satisfied. Only a licensed bankruptcy attorney can guide you through this arduous process, particularly when it comes to complex cases. Be sure to hire someone you respect and trust.

Bankruptcy Courts In Virginia

Walter E. Hoffman United States Courthouse
600 Granby Street
Norfolk,VA 23510
Virginia Eastern Bankruptcy Court

Spottswood W. Robinson III & Robert R. Merhige, Jr., U.S. Courthouse
701 East Broad Street
Richmond,VA 23219
Virginia Eastern Bankruptcy Court

Martin V.B. Bostetter, Jr. United States Courthouse
200 South Washington Street
Alexandria,VA 22314
Virginia Eastern Bankruptcy Court

United States Courthouse
116 North Main Street
Harrisonburg,VA 22802
Virginia Western Bankruptcy Court

United States Courthouse
1101 Court Street
Lynchburg,VA 24504
Virginia Western Bankruptcy Court

Commonwealth of Virginia Building
210 Church Avenue
Roanoke,VA 24011
Virginia Western Bankruptcy Court


Additional Virginia Resources

Foreclosure Help Program

Disability SSDI Benefits