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Richmond Virginia Bankruptcy Law Blog

What are the benefits of Chapter 13 bankruptcy?

You may be considering your bankruptcy options after experiencing insurmountable financial challenges. Like most Virginia residents in the same situation, you have two main choices for personal bankruptcy – Chapter 7 and Chapter 13. Unlike Chapter 7 bankruptcy, which eliminates eligible debt, Chapter 13 bankruptcy gives you a chance to restructure your debts and make manageable payments over a three to five-year period.

Why would you want to repay your debt if you have the option of discharging it through Chapter 7? One easy answer is that, due to your income and employment, you might not be eligible for Chapter 7. However, as FindLaw explains, Chapter 13 bankruptcy has different advantages, which may be better for your circumstances.

The pains of rheumatoid arthritis can put an end to your career

As humans get older, they often have to deal with a wide range of symptoms related to aging. Aches and pains are common, especially first thing in the morning, after a long day or during times of inclement weather.

However, not all aches and pains or discomfort are benign and casual. Sometimes, the persistent pain in your joints is actually related to a more serious condition, such as rheumatoid arthritis (RA). While arthritis becomes increasingly common in populations as they age, that doesn't decrease the severity of its impact on someone's life.

Will bankruptcy affect my child's financial aid eligibility?

While you may have saved for your child's higher education and did everything by the books financially, job loss, divorce, medical emergencies and other unexpected events may have forced you to file for bankruptcy. While bankruptcy gives you a chance to start over financially, you may wonder how the filing will affect your child's future. Will it hurt his or her chance of obtaining federal financial aid or student loans to go to college in Virginia?

According to College Coach Insider Blog, bankruptcy should not affect your child's ability to obtain state, federal or college-based student aid. Nor will your child receive more or less aid because of your default. If eligible, your child should receive his or her entitlement of $5,500 to $7,500 in federal Direct Stafford Loans.

Can you keep your home after filing for Chapter 7?

Most individuals who find themselves faced with an avalanche of debt but who want to keep their homes file for Chapter 13 bankruptcy, which is more of a reorganization bankruptcy. However, to qualify for Chapter 13, you must have the ability to repay a portion of your debt over a three to five-year period. If you do not have the means to do this, you may have to file for Chapter 7. Does doing so automatically mean you lose your home? Not necessarily. According to SFGate, filing for Chapter 7 may not cost you your home. In fact, the more you owe on your Virginia home, the greater the likelihood the courts will let you keep it.

In Chapter 7 bankruptcy, your home must have enough equity to cover the remainder of your mortgage before other creditors can seek repayment. If you owe too much on your home, the bankruptcy trustee will not sell it to pay creditors. In this case, your debt, combined with Virginia's homestead exemption, may allow you to keep your home.

Financial lessons that can be gleaned from divorce

When a couple is in the throes of getting divorced in Virginia, they may struggle to see any value coming from their decision. However, with time and commitment to overcoming a difficult change in their relationship, they may be able to begin to recognize how their decision ultimately led to greater opportunities and valuable life lessons. 

One of the largest consequences that divorcing couples may face is the effect of their relationship change on their financial situation. Often, it takes time for courts to help separate a couple's finances, retirement accounts and assets in a way that allows both people to maintain some value. As such, some important financial lessons can be gleaned from people who have gotten a divorce. For one, while maintaining a hopeful perspective, people should prepare for the worst outcome and do their best to offset the negative effects by being proactive about creating a better future for themselves. 

Bankruptcy myths: It's smarter to pay your debt

You decide to declare bankruptcy. Before you do it, you mention your decision to a friend or a family member. Maybe you're looking for advice or feedback. Maybe you're just making conversation. Either way, you definitely get some feedback, and your friend is critical of the whole process.

What they tell you is that it's better to pay off all of the money that you already owe. They insist that, even if it takes time, you should keep chipping away at it. They act as if declaring bankruptcy is clearly worse than trying to pay everything yourself.

Utilizing bankruptcy as a resource and not a solution

When people have reached the decision to file for bankruptcy in Virginia, they could have spent considerable time leading up to their decision, doing everything in their power to get out of the financial situation they are in. Others may have simply settled on bankruptcy as a convenient method to smoothing over the issues they have encountered with their cash flow. Whatever their reasons, one of the biggest mistakes that people can make is to see bankruptcy is a solution. 

Bankruptcy is not the end of a person's efforts to remedy their financial situation. In fact, it is just the beginning; a resource that can facilitate their recovery towards rebuilding a financial structure that is better managed and more flexible to allow for the times when unexpected expenses may arise. According to Forbes, certain debts are untouched by bankruptcy and still require a person's full payment. These include expenses such as child support, taxes and student loans. 

Who pays college expenses for a child in a divorce?

If you are getting a divorce or are already divorced in Virginia, you may wonder who will pay for your child's college expenses. This is a valid concern as college costs are rising. In addition, if you receive child support, that will end either when your child turns 18 or graduates high school. You may not be able to afford the costs yourself and wonder if the child's other parent has an obligation to pay.

According to the National Conference of State Legislatures, college expenses are not an obligation of any parent, so the chances are that your child's other parent has no legal obligation to help pay for your child's education. However, the state does allow for judges to include college expenses, sometimes called college, post-secondary or post-minority support, when making child support orders.

What does "as is" mean when buying a used car?

If you want to buy a new car in Virginia, it is important that you understand what you are getting into. For instance, when you see the phrase "as is" in conjunction with the sales propaganda, beware. That is not to say that all as-is vehicles are lemons, but there is a good chance that any as-is vehicle has a costly and difficult to repair issue. However, before you write off all as-is used vehicles, you should better understand why and when dealerships use the term. 

Autotrader explains what as-is means. Generally speaking, "as is" refers to a car's warranty status, not its physical condition. In some cases, an as-is vehicle does, in fact, come with a warranty. In such cases, a dealer may acknowledge that a vehicle does have flaws and defects, for which you, the potential new owner of the vehicle, would be liable. The warranty, however, may cover other as-of-yet undiscovered faults. In other cases, an as-is vehicle comes without a warranty. In these instances, the as-is status simply refers to its lack of warranty. You, as the potential buyer, would be responsible for all deficiencies.

Virginia's homestead exemption act

Though today's economy is better than what it was a decade ago, it is still tumultuous. Because of this, Virginia homeowners should be aware of their rights should they need to file bankruptcy. Most states have homestead exemption laws, which prevent lenders from kicking homeowners out of their homes should they undergo drastic changes in financial circumstances. While Virginia's homestead exemption laws are not the worst in the nation, they are amongst some of the most unforgiving.

According to Pocket Sense, the amount a homeowner may claim in Virginia under the homestead exemption act depends on several factors, including bankruptcy filing status, marital status and the number of dependents living under one roof. However, individuals are generally entitled to $5,000 in exemptions plus $500 for every dependent living in the home. If a married couple files for the exemption jointly, the exemption doubles to $10,000.

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