Virginia residents who are experiencing financial difficulties may use bankruptcy as a way to get control over their debts. Prior to bankruptcy, courts require the filer to take a credit counseling course. Furthermore, it's necessary to take continuing education courses after filing.
There are three common forms of bankruptcy, and a debtor will choose a type based on the circumstances of their case. Chapter 7 bankruptcy involves liquidating eligible assets and using the money to pay off creditors. Chapter 13 allows debtors to reorganize their debt and repay it over the course of three or five years. Chapter 11 bankruptcy is generally used by businesses to reorganize their debt, but it can also be used by those who have too much debt to qualify for Chapter 13 protection. During a Chapter 11 or 13 case, a debtor will generally need to ask permission from the trustee to take on new debt.