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.
If an individual is 65 years of age or older, he or she may declare a maximum of $10,000, regardless of whether or not he or she is married. The amount does not double, however, if he or she is. If a surviving spouse files on behalf of a deceased homeowner, he or she can claim up to $15,000 in exemptions. If there are surviving children but no surviving spouse, the children may split the $15,000 exemption between the three of them.
Individuals must file a homestead deed prior to filing bankruptcy and within five days of meeting with their mortgage lenders. If one fails to file the deed and files bankruptcy regardless, he or she forfeits his or her rights to the exemption.
According to FindLaw, many states allow individuals to use either the federal homestead exemption or the state's. Though the federal limit is significantly less than other state's limits, at $23,675, it is still more than what Virginia offers. However, Virginia is not a state that allows homeowners to use the federal exemption.