Chapter 7 bankruptcy may be an effective way for debtors in Virginia and other states to regain control of their finances. An individual might qualify for Chapter 7 bankruptcy by passing the means test. The means test evaluates a person's income to determine if it is above or below the state median. A person could also qualify to file for a liquidation bankruptcy if that individual has not had a Chapter 7 case discharged in the past eight years.
Furthermore, a debtor must not have had a Chapter 13 case discharged in the previous six years. Anyone who has had a case dismissed in the last 180 days may not be eligible to file again. This is likely true for those who had their cases dismissed because they were deemed to have abused the bankruptcy system. It also typically applies to debtors who violated a court order or committed fraud.
Individuals are generally required to obtain credit counseling no more than 180 days before their cases are discharged. A credit counseling course is designed to help those going through bankruptcy learn how to avoid doing so again. The trustee in a given case may be able to provide insight into where to take the required course. Debtors who cannot afford to pay for counseling might receive it at a reduced rate or for free.
By filing for Chapter 7 bankruptcy, a debtor might be able to discharge some or all of their unsecured debts. Unsecured debts may include credit card balances, medical bills or personal loans. An attorney may explain the benefits of bankruptcy such as the ability to obtain an automatic stay of creditor contact. This might prohibit creditors from following through with a lawsuit or other collection activities.