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Understanding Chapter 7 bankruptcy exemptions in Virginia

On Behalf of | Jan 14, 2021 | Chapter 7 Bankruptcy |

One of the most common questions our attorneys hear involves what a person will lose in a Chapter 7 bankruptcy. We think this is a great question. After working hard to acquire the things you own, you want to keep as much as possible to avoid starting from scratch once more.

Breaking it down into two categories helps those in the Roanoke region of Virginia understand more about the bankruptcy process.

What possessions can you keep after filing Chapter 7 bankruptcy?

You will not lose everything you possess in a Chapter 7 bankruptcy. The Virginia homestead exemption allows residents to claim a one-time property exemption of up to $5,000 (plus $500 per each dependent). If you are older than 65, you can claim a one-time exemption of up to $10,000. Examples of other assets that may survive bankruptcy include:

  • Contributions to approved pensions and retirement funds
  • Clothing valued at up to $1,000
  • Home furnishings valued at up to $5,000
  • Trade or business tools valued at up to $10,000
  • A vehicle necessary for travel

Your home, in many cases, will also be something that is protected. While every situation is unique, people who file bankruptcy typically can retain their homes when they have few other assets and the home is not already in default.

What will you lose in a Chapter 7 bankruptcy?

Most people who file Chapter 7 lose nothing or almost nothing of their personal assets. Generally speaking, most people who are in the position where they need to file for Chapter 7 bankruptcy protection aren’t holding onto a lot of money or assets in the first place. That being said, you could have to surrender certain assets if they have significant value, like collections of coins or stamps, vacation property, extra cars and recreational vehicles.

As you can see, the things you may be allowed to keep include items that can help you move forward with your life after filing for Chapter 7, confident that you can make ends meet. We invite you to continue reading our blog and our website for more about Chapter 7 bankruptcy in Virginia.