The possibility of losing everything is devastating. When you're facing a mountain of debt, where do you turn to for answers to questions like "Will I lose my home"? If you're facing the possibility of a foreclosed mortgage and bankruptcy looks like your only way out, knowing when in the process to file can make a world of difference in your outcome.
Individuals and married couples have two options for debt resolution: Chapter 7 and Chapter 13. Filing Chapter 7 allows you to wipe out most of your debts and get a fresh start. Each person is allowed a $5,000 personal exemption, plus $500 for each dependent. That means a married couple with two kids is allowed a total of $11,000 in personal asset exemptions. Any assets over that amount may be ordered sold by the judge to apply toward outstanding debt; however, that doesn't always apply to the primary residence.
Chapter 13 debtors enter into an agreement with their creditors to repay all or part of their outstanding debt. The repayment terms are for 3 - 5 years, and you should bring a proposal for your repayment schedule with you to your court hearing, which a bankruptcy attorney can help you prepare. If approved by the judge and carried out as promised, your remaining debt balance will be discharged at the end of the repayment period.
Your bankruptcy attorney can tell you more about both types of filing.
The ability to keep your home when you file for debt relief depends on a few factors. Whenever possible, file for bankruptcy before your home is in foreclosure. When you file to have your debts legally discharged, it freezes any actions from creditors toward debt collection, beginning from the day you file. Then, there are several possible exceptions that may apply to help you keep your home.
In Virginia, an exemption is allowed for the equity from personal property that's secured by a loan. Equity is the amount left when you subtract the outstanding loan amount from the value of the property. Married couples are each allowed an exemption, and any federal exemptions on property are also added to the amount. If payments can be brought current and the exemption applied, you will likely be able to keep your home.
When you're looking for debt relief in Richmond, Throop Law can show you the way.
Call 804.464.3989 or request a free consultation with a bankruptcy attorney about your situation today. Se habla Español.