It is time to change Virginia's life time cap on exemptions.

Edrie Pfeiffer
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Edrie Pfeiffer, Bankruptcy & Divorce Attorney

I was recently in Court and saw two different cases where the debtors had filed a Chapter 7 bankruptcy without the assistance of an experienced bankruptcy attorney. In both cases, the debtors were before the court on the Chapter 7 trustee's objection to their exemptions. In both cases, the debtors stood to lose several thousand dollars, most likely in the form of tax refunds.

The main issue in both cases was not the standard one of the debtors not having filed a Homestead Deed within the required time frame. The problem was that they had both filed a previous bankruptcy case and had a previous Homestead Deed. It was clear from the proceedings that these individuals were truly destitute and could not afford to have to turn over money to the trustee. However, since they had filed previous cases and used up most of their life time limit on exemptions, they both faced the loss of assets in this case. 

Virginia's life time cap on exemptions is punishing those who can least afford it. These debtors probably believed that they could not afford an attorney to represent them in their bankruptcy since they had no money to pay an attorney. They also probably do not have the income necessary to protect assets through a Chapter 13 repayment plan. Because they have filed a previous bankruptcy, even one over 20 years ago, they will be forced to turn over assets to the Chapter 7 trustee. The main assets that they stand to lose are their tax refunds for the next year, garnished wages and money in the bank. 

Another great irony is that if they have the capability to move out of state and then file their bankruptcy, they can probably keep all of their assets since they will not be forced to use Virginia's limited exemptions. Do we really want to encourage life time Virginia residents to move to be able to keep a couple of thousand dollars in tax refunds, much of which is probably Earned Income Credit? It is time for Virginia lawmakers to remove the life time cap on exemptions and put Virginia on par with the other 49 states.

Ready to file bankruptcy?  Contact me today at (757) 276-6555. 


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I know one day that I would want to be a first time home buyer and make the best life for my daughter with special needs. So I decided that it would be best with all of the creditors calling and falling behind in my bills because of a pass illness it would be best to file chapter 7. Hampton Roads Legal Services has been right by my side the whole time. They will alert your phone for appointments as well as missing paper work. They are very attentive to make sure you have all necessary paper work before your court date, and the day of your court date Mrs. Phaffer will great you with a big smile talk to you and stick by your side until your hearing is complete. Hampton Roads Legal Services is very attentive and at the end of the day I couldn't have ask for a better firm to be by my side. Thank you....
by Alease Yancy October 30, 2014 at 11:09 AM
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