When people struggling with debt in Virginia consider their options for debt relief, bankruptcy is usually investigated. Unfortunately, many people who are considering taking this step may find it difficult to actually begin the process due to financial constraints.
In Chapter 7 bankruptcy, for example, a bankruptcy trustee liquidates a debtor's nonexempt assets and distributes any proceeds to creditors; then, a judge discharges all remaining eligible debt. This straightforward process is often best for people with no or low income and few assets. Unfortunately, coming up with the money to pay for court costs and attorney fees is often beyond reach for many debtors.
At this point, the alternatives available to these individuals are limited. While it is technically possible for someone to file their own bankruptcy case, bankruptcy courts are not designed for non-lawyers. It is very easy for to make mistakes that could result in a person's case being dismissed by a judge. Document preparation services do exist but may provide limited help of dubious quality.
Another option that exists is Chapter 13 bankruptcy. In a Chapter 13, the debtor enters a supervised repayment plan that lasts either three or five years. Attorney fees can be incorporated into this repayment plan, which could lower the up-front costs of filing for bankruptcy. Unfortunately, many debtors, particularly those living on a low income, are unable to meet plan payments, resulting in a dismissal of their case.
Individuals and families who are considering Chapter 7 bankruptcy may benefit from speaking with an experienced attorney. This is true even if the debtor is concerned about affording the costs of bankruptcy. The lawyer may be able to review the client's case and make recommendations regarding debt relief options.