Virginia Bankruptcy - Chapter 7

Chapter 7 laws liquidate debts without payment. Chapter 13 requires that debts are repaid, in whole or in part, over a term of months. Because of these uniquely exclusive purposes, the impact of a Chapter 7 Virginia bankruptcy is quite different as compared to a Chapter 13 Virginia bankruptcy. The term "straight bankruptcies" is old term which still survives today and is sometimes used to describe cases filed under Chapter 7.

Most consumer debts are dischargeable. Routine discharges are available for mortgage deficiencies, car notes, credit cards, accounts payable, and many others. Certain debts are not dischargeable, and in general, include liabilities owed to government authorities (taxes, fines, penalties) and civil liability for debts imposed on others without permission (child support, judgments for damages, DWI, DUI, theft, fraud, etc.).

Virginia Bankruptcy Protection

The primary purpose of Chapter 7 laws is to discharge debts and provide debtors a "fresh start." However, all people who file are not entitled to a discharge of all debts. Limitations are imposed on who may file, and the particular debts that may be discharged. Virginia bankruptcy courts are charged with an affirmative duty to review compliance with all applicable rules and statutes. Likewise, trustees and creditors may file objections and direct the courts attention to noncompliance. Depending upon the classification for each debtor who files and classification of debts included within the estate, the application of Chapter 7 laws is unique for each person who files.

In practice, most individuals who file Virginia bankruptcy under Chapter 7 do receive a discharge without surrendering significant assets. Most often, this favorable result for debtors occurs after careful review and planning. If significant assets are subject to seizure, or discharge of debts is questionable, debtors often choose reorganization or avoid filing altogether using one of the many alternatives available today. Avoid all surprises.

The Code provides numerous options for discharge and reorganization of debts. The benefits and burdens upon debtors varies, and may provide a significant improvement in financial condition. Because the law evolves daily through legislative and judicial decisions, the assistance of qualified legal counsel is essential to gain the maximum benefit allowed by law.

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