This is not the first time that I have written about the extra requirement of filing a Homestead Deed that causes many individuals, who file a Chapter 7 bankruptcy without the assistance of an attorney, to lose money they need. I was recently in Court and observed a case where a Chapter 7 Trustee was objecting to the exemptions that a pro se filer had claimed in her bankruptcy paperwork. The main issue was when the Homestead Deed was delivered to the state court for recording. Only Virginia has this extra requirement to protect certain assets. This debtor was ahead of many individuals who file a bankruptcy without an attorney, she actually filed a Homestead Deed. The problem was that it was recorded two days after the deadline. While she stated that she had delivered it to the court a few days before the recording date, she had nothing to show that. As a result the Judge had no choice but to find that she had not complied with the requirements of the Virginia law. This meant that she had to turn over her entire tax refund to the trustee which was over $6,000. Based on the discussion in court, I am sure that most of that tax refund was Earned Income Credit, given to low income wage earners. This was money that she could not really afford to lose. Even though she tried to follow the correct procedures, her lack of knowledge of the law caused her to lose over $,6000.
The Homestead Deed requirement applies only to those who have lived in Virginia for over two years prior to the filing of their bankruptcy so the law discriminates against long time Virginia residents. Since it is a life time limitation, individuals who have filed a previous bankruptcy may end up losing necessary assets if they have to file a second case. The time has come for the Virginia State legislature to amend the exemption laws and end the unequal treatment that penalizes long time Virginia residents.
If you have filed a Chapter 7 bankruptcy in Virginia, do not attempt to file a second case without the assistance of an experienced bankruptcy attorney. Contact Hampton Roads Legal Services at 757-320-2010 today for a free consultation on how we can help you to protect your assets and get you relief from your debts.