Chapter 13 bankruptcy is a legal process in which debtors use their disposable income to pay off their debts. Virginia debtors who are in some stage of the Chapter 13 bankruptcy process may find that it is possible to purchase a new vehicle or keep the one that they have already purchased; however, the process they use may vary.
There were 844,495 bankruptcy cases filed in 2015 in Virginia and throughout the country, and 97 percent of those cases were filed by individuals. Those individuals had a median income of $34,392 and median expenses of $30,972 when they filed. In the past, those who filed for bankruptcy may have been seen as people who were irresponsible with their money. However, the system exists to allow people to take risks in a capitalist society.
Federal Reserve data indicates that credit card debt in the United States passed the $1 trillion mark in 2017. This may have implications for the financial health of Virginia residents and others. A study by CreditCards.com sought to rank the 25 most populous cities by the average amount of credit card debt residents held. Washington, D.C., had the most debt with the average person having a balance of $7,442.
Virginia consumers who have ever filed for bankruptcy or are considering it might assume that it ruins their chances of ever having good credit again. But in actual fact, there is a time limit for bankruptcy to remain on a person's credit report, and when it is removed, rebuilding credit to the good score range is quite possible. Not all negative information remains on a credit report for the same amount of time. Late payments remain for seven years, as does Chapter 13 bankruptcy. But Chapter 7 bankruptcy remains for 10 years.