What You Need to Know About Filing Chapter 13 Bankruptcy in Virginia

Chapter 13 bankruptcy allows individuals who are overwhelmed with debt to pay their debts without losing their home or other assets. Chapter 13 gives the debtor breathing space to catch up on missed payments without taking away the option of filing Chapter 7 bankruptcy in the future if his income changes or if he somehow incurs more debt.

To qualify for Chapter 13 bankruptcy, the debtor must meet ALL of the following criteria:

  • Only individual or a husband and wife qualify for Chapter 13 bankruptcy. Small businesses, corporations, limited liability companies, partnerships and business trusts are not eligible for debt relief under Chapter 13.
  • The debtor must have a regular source of income. The income may come from employment, the proceeds of a business, rental income, government assistance, or from family and friends.
  • The debtor must be generating more income each month than he or she needs to cover living expenses. There must be a set amount of money available each month that can be used to pay creditors.
  • The debtor's must have less than $922, 975.00 in secured obligations. This debt includes home mortgages, mortgages on other real estate, and business debt or automobile liens secured by real property.
  • The debtor's liquidated, unsecured obligations must total less than $307,675.00

When filing Chapter 13 bankruptcy, the debtor must come up with a debt repayment plan that repays creditors over a three to five year period. The plan must meet the following criteria set by the federal government:

Chapter 13 Bankruptcy Plan Confirmation Criteria

  • The debtor's plan must be proposed in good faith. In general, this is only an issue if the debtor has filed multiple bankruptcy cases in the past.
  • The plan must propose to pay creditors at least as much as they would receive if had debtor filed Chapter 7 bankruptcy. This means the debtor must pay creditors a minimum of the liquidated value of his assets.
  • The plan must be feasible. The debtor must show proof of income, such as pay stubs, tax returns, proof of rental income, proof of government assistance or other documentation that the debtor is actually generating the income needed to make the proposed payments.
  • The plan must devote all net disposable income to paying his debts for a sixty month period. The debtor will need to show how much he spends each month for housing, groceries, utilities, insurance, medical needs, transportation and other necessities. The budget must be reasonable and must leave income for debt repayment.
  • The plan must provide specific and fair payment plans for each creditor. If the debtor is behind on mortgage payments and would like to keep his home, the plan must pay the entire amount owed to the mortgage holder.

Chapter 13 bankruptcy is not for everyone. A Virginia bankruptcy lawyer can advise you on the best debt repayment plan to meet your needs. For more information about or how the Vienna Law Group can help you avoid foreclosure and stop collection agency and creditor harassment by advocating on your behalf, please contact our Fairfax County bankruptcy attorneys today at 703-385-6868. We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.




The information on this web site is not legal advice. All cases vary based on unique details so  all case evaluations must be performed by an attorney or law firm.  Past case performance is not an indication of performance on any current or future case.  Information on this site is intended for educational and general reference purposes only in order to assist the reader with a better understanding of various issues which may affect them. Reading from this site does not establish a client/attorney privilege. To obtain legal advice, you must hire an attorney.

Vienna Law Group

10615 Judicial Drive                      8229 Boone Blvd
Suite 101                                       Suite 290
Fairfax, VA 22030                            Vienna, VA  22182 

Phone: 703-385-6868
Toll free: 1-877-491-4LAW
Fax: 703-385-7009

 

Vienna Law Group provides immigration, bankruptcy, family law, divorce, traffic violation, DUI/DWI and criminal legal services in Northern Virginia, including the following cities and counties: Fairfax, Vienna, Reston, Tyson's Corner, McLean, Falls Church, Arlington, Alexandria, Mt. Vernon, Annandale, Springfield, West Springfield, Newington, Lorton, Woodbridge, Dale City, Burke, Manassas, Centerville, Chantilly, Herndon, Sterling, Ashburn, Leesburg, Fairfax County, Alexandria County, Arlington County, Loudon County and Prince William County.



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