The federal and state governments passed bankruptcy laws to protect working families. Virginia bankruptcy laws are in place because good people can be negatively impacted by circumstances that are simply out of their control. Economic slowdowns, illness, severe weather and other factors can cause the most frugal person to fall behind on bills. When an income shortfall puts you in the difficult position of not being able to meet monthly bills, the Agarwal Law Firm can get you the debt relief you deserve.
Who is Eligible for Chapter 7 Bankruptcy?
In order to be eligible to file for Chapter 7, you must meet what is called a bankruptcy “means test.” The formula calculates whether or not you have the “means” to pay down a portion of your debts based on income.
The means test considers the state’s median household income, based on family size, against how much you generated during the last six months. Average that figure to one month, then multiply by 12 to arrive at a yearly income. People with high debt who fall below Virginia’s average are generally considered eligible. Those who are earning at or above the median household income may also be eligible for Chapter 7 bankruptcy based on the results of a completed means test.
You will need to pull together all sources of income and expenses. With all of this information in hand, the test weighs revenue against expenses to determine your disposable income. Depending on where that number falls, you could be eligible for Chapter 7 or possibly a different type of bankruptcy option.
Please do not assume your eligibility for Chapter 7. An attorney can talk to you about the possibility of other Chapters of bankruptcy that can be very beneficial as well.
Chapter 7 Bankruptcy: What You Need to Know
Chapter 7 bankruptcy ranks among the most common filings. It’s a straightforward option that liquidates certain assets to pay creditors and washes away the remaining debt. An attorney will not file the case until a discussion is had as to what assets may be in danger. In most cases filers keep all assets.
Filers are generally tasked with completing a credit counseling requirement. This takes approximately 1.5 hours and can be done over the internet. This part of the process has been mandated to ensure that people struggling with debt understand a variety of relief and money management options. Once the legal documents have been filed with the court, a trustee will be appointed to your case who may meet or correspond with creditors. The state also places limits on items that may be considered high value. It’s important to consult with an experienced Chapter 7 bankruptcy attorney to ensure that all assets are protected.
Benefits of Filing Chapter 7 Bankruptcy
The primary advantage of filing a Chapter 7 bankruptcy is that it provides you with a clean slate. Chapter 7 remains an affordable legal option that ends the phone calls and allows you to build a robust financial future. These are long-term benefits that make Chapter 7 a viable debt-relief solution.
Upon successful completion, your future earnings are free from creditor attachments. There is no long term payment plan as there are in Chapter 13.
Under certain other bankruptcy processes, there are strict limits on how much debt can be eliminated. Because Chapter 7 is intended to help everyday people get back on their feet, the filing does not place a limit on debt relief.
Debt in a Chapter 7 case can be discharged as quickly as four months.
Although no one wants to go through the bankruptcy process, having an attorney file Chapter 7 on your behalf remains one of the best remedies for good people who find themselves in a difficult situation. Hard working people have little control of the powerful forces that can negatively impact our financial health. You owe it to yourself and family to resolve excessive debt and regain your economic well-being.
Chapter 7 Bankruptcy Solutions in Richmond, VA
If you are suffering through a financial crisis, it’s time to work with a lawyer who brings more than 15 years of experience helping everyday people get a fresh start. The Agarwal Law Firm provides hard-working Virginians with an affordable pathway to financial stability. Call or contact our Richmond law firm and schedule a free Chapter 7 bankruptcy consultation today.
Frequently Asked Questions
While many people think of Chapter 7 as an unpleasant experience, those who need to file for Chapter 7 bankruptcy should view this as a fresh start with new opportunities. Chapter 7 bankruptcy is a part of federal that allows individuals to discharge certain debts. This means that they will not need to repay these discharged debts as long as they are able to meet the criteria listed under federal law after filing a case with a bankruptcy court. When considering filing for Chapter 7 bankruptcy, it is normal for people to have questions about what might happen next.
How Long Does Chapter 7 Stay on Your Credit?
One of the most common questions that people have is about the length of time which bankruptcy might stay on someone’s credit report. Of course, it is normal for people to be concerned. Just remember that your credit score is probably already low and will continue to get lower as more debts become due. In the case of declaring Chapter 7 bankruptcy, individuals should know that this typically stays on someone’s credit report for about ten years however it may not affect you for 10 years. Normally if you keep all current bills paid you should be able to rebuild in about 2 years.
Is It Better to File for Chapter 7 or Chapter 13 Bankruptcy?
Two of the most common forms of bankruptcy that people hear about are Chapter 7 and Chapter 13. While In Chapter 13 bankruptcy, individuals still repay some of their debts over a three to five-year period. The Chapter 13 has tools that the Chapter 7 does not like the ability to catch up on secured debt payments that are behind, pay tax debt, and lower car payments. In Chapter 7 bankruptcy, the debts are typically wiped clean. Lenders might be more willing to lend to someone who declared for Chapter 13 than they would Chapter 7 given that someone repays some of their debts with Chapter 13 bankruptcy.
What Happens After Filing for Chapter 7 Bankruptcy?
After someone files for Chapter 7 bankruptcy, the case will typically play out over a three to six-month period. The case will be assigned to a professional from the bankruptcy court who will oversee the case. All of the debts that the person has will be reviewed. Then, all of the person’s individual holdings such as bank accounts and property will be reviewed. Any debt that can be discharged will be discharged.
How Much Does it Cost to File for Chapter 7 Bankruptcy in Richmond, VA?
The Agarwal Law Firm offers Chapter 7 bankruptcy services at an affordable, low cost. Our representation runs at about $1,450 per case, which ensures comprehensive support and guidance through the intricacies of the Chapter 7 filing process. This price includes filing fees, credit counseling, debtor education, credit report and initial attorney fees.