Answers to Your Most Frequently Asked Questions
You're probably full of questions right now—and that's okay, because we have answers! Check out some of the questions we hear the most about bankruptcy, divorce, and child custody from clients just like you.
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Can I keep a credit card when I file a Chapter 13 Bankruptcy in Virginia?
When you file a Chapter 13 bankruptcy, you must list everyone that you owe money to. There are no exceptions. If you have a balance on a credit card, you have to list it on your bankruptcy petition. However, if you have a credit card that has a $0 balance, you do not owe money to that creditor and you are not required to list the account. Most major credit card companies, MasterCard, Visa, American Express and Discover, automatically receive notice of every bankruptcy that is filed anywhere in the United States. They compare those filings against their accounts and close any credit card accounts for individuals that have filed a bankruptcy regardless of whether they were listed in the bankruptcy.
If you are considering filing a bankruptcy, do not attempt to pay off a credit card so you don't have to list it. You are far better off using the money to pay for a bankruptcy. If you really need to have a credit card, you can apply for a new credit card after your bankruptcy is filed. However, remember what caused you to have financial problems in the first place and do not run up balances on a new credit card after filing a bankruptcy.
If you are having trouble paying your credit card debt, a Chapter 13 bankruptcy may be the solution for you. Contact Hampton Roads Legal Services today at 757-320-2010 to schedule an appointment with attorney Edrie Pfeiffer. She will explain how a Chapter 13 bankruptcy can help you.
Do I have to File A Chapter 13 Bankruptcy in Virginia?
There are times when it is better to file a Chapter 13 bankruptcy than a Chapter 7 bankruptcy. If you have a mortgage or car loan that you are behind on and you want to keep the house or the car, you may need to file a Chapter 13 bankruptcy. If you have significant equity in a house, car or other asset, you may need to file a Chapter 13 bankruptcy to protect that equity. If your income is above a certain level based on the size of your household, you may be required to file a Chapter 13 bankruptcy.
However, you do not have to file a Chapter 13 bankruptcy simply because you own a house or have a car loan. There are some attorneys who will tell virtually every client that they need to file a Chapter 13 bankruptcy regardless of their circumstances. I have even heard of attorneys who go so far as to tell a client that they have to file a Chapter 13 because they own a house or because they have a car loan. This is not the case. If you are advised that you have to file a Chapter 13 simply because you have a house or a car loan, you need to make sure that you understand the reason for the Chapter 13. If you are unclear about why you have to file a Chapter 13 bankruptcy, you should seek a second opinion.
It is normally less expensive to file a Chapter 13 bankruptcy up front since most attorneys collect their attorney fees from the Chapter 13 plan payments. However, the attorney fees for a Chapter 13 are normally much higher than for a Chapter 7 overall. Before you file a Chapter 13, you need to understand how much you will have to pay if you decide later that you want to convert your case to a Chapter 7.
If you have been told that you have to file a Chapter 13 bankruptcy and you want a second opinion contact Hampton Roads Legal Services at 757-320-2010 for a free consultation on what is best for you.
What are my options to pay arrears on Child or Spousal Support?
Arrears on Child or Spousal support cannot be discharged or wiped out in a bankruptcy. However in a Chapter 13 bankruptcy, you can pay the arrears as part of your repayment plan. The arrears will be paid without any interest while you are in your Chapter 13 case. It is important to note that the bankruptcy does not stop the state court from enforcing support orders. This means that you can be sanctioned for the failure to pay your child or spousal support payments even though you have a Chapter 13 plan that proposes to pay the arrears. Normally the Division of Child Support Enforcement will stop any collection of arrears on child support while you are in a Chapter 13 bankruptcy though.
In addition, the bankruptcy code provides that your Chapter 13 case can be dismissed if you are not paying the child or spousal support payments that are due after your bankruptcy has been filed with the Court. It is very important that make sure the regular monthly payments are being made after you file a Chapter 13 bankruptcy.
When do creditors have to stop calling me after I file a Chapter 13 bankruptcy?
One of the best aspects of a Chapter 13 Bankruptcy is what is referred to as the automatic stay. When you file a Chapter 13 bankruptcy, your creditors are immediately prevented from taking further action against you. This means that they cannot call you, continue to send you bills or take you to court over your debt. If they have a garnishment in place, they must release it. In addition, they cannot repossess your car or foreclose on your house without permission from the bankruptcy court.
Of course, the creditor has to know about the bankruptcy so that they know to stop all collection actions. After your case is filed, the bankruptcy court will send out notices to all creditors listed on your bankruptcy petition. This is why it is so important to list everyone that you owe money to along with all collection agencies. If there is a pending foreclosure or a garnishment, we will notify the creditor immediately after your case is filed to stop the creditor action. Many times we stop foreclosure sales right before the sale is scheduled to take place.
One down side of the automatic stay is that many creditors feel that they cannot send monthly statements, like a mortgage statement, even if you indicate that you intend to keep the house. This means that you have to make sure that you are sending your monthly payment to the creditor even if you do not get a statement from them.
If you are facing a foreclosure or being garnished, we can make them stop. Contact me or call me today at 757-32-02010 to schedule your free consultation to see how a Chapter 13 Bankruptcy can stop creditors in their tracks and help you keep your house.
Can you protect a co-signor in a Chapter 13 Bankruptcy?
Unlike a Chapter 7 bankruptcy which discharges your obligations on unsecured co-signed debts, it is possible to protect a co-signor in a Chapter 13. There are several different ways that the co-signor can be protected. If the debt is a secured debt, you may want to continue making the regular monthly payments directly to the creditor to protect the co-signor. If the debt is unsecured, if can be paid in full through the Chapter 13 bankruptcy. This will protect the co-signor while you are in bankruptcy. However, the Chapter 13 bankruptcy will not pay the interest on the co-signed debt. Once you have completed your bankruptcy and receive a discharge, the creditor can collect the unpaid interest from the co-signor.
If you have a co-signed debt, it is important that you discuss this with your attorney. You have many options and an experienced bankruptcy attorney can help you to choose the best option for you.
If you are struggling due to debts that you co-signed on, contact us or give us a call today at 320-2010. We will schedule you a free consultation with an attorney with almost 20 years of bankruptcy experience.
Can you stop a garnishment in a Chapter 13 bankruptcy?
Yes. When you file a Chapter 13 bankruptcy, any garnishments must be stopped. In addition, we may be able to get back the money that has been withheld from your wages or bank account. Garnishments normally run for 90 to 180 days and at the end of the garnishment period, there is a hearing. If your case is filed before that hearing date, we can normally recover any money that has been withheld during that garnishment period. However, these funds must be protected for you and must come out of your wildcard exemptions which has a lifetime limit on it. If the amount that has been withheld exceeds the amount that you can protect, you may have to turn some of the money over to the Chapter 13 trustee as part of your Chapter 13 plan.
It is important that you meet with an experienced bankruptcy attorney if you are currently being garnished. If not handled correctly, you could lose hundreds of dollars. Contact me or call my office today at 757-320-2010. I will meet with you and discuss how to stop the garnishment and recover the money for you.
When should I file for Chapter 13 Bankruptcy?
A Chapter 13 bankruptcy is a repayment plan. Normally you would file this type of case if you have debts that need to be paid back.
If you are behind on your mortgage payments and want to keep your house, you can file a Chapter 13 bankruptcy and catch up the missed mortgage payments through the Chapter 13.
If you are behind on your car payments and want to keep your car, you can pay for the car through a Chapter 13 bankruptcy. Depending on how old the loan is, you may be able to reduce the amount that has to be paid back or you may be able to lower the interest rate on the loan.
If you have a large amount of tax debt, you can pay it back through a Chapter 13 bankruptcy. In addition, if you have a tax lien, you may be able to pay it off for far less than the amount of the lien.
There are other benefits from filing a Chapter 13 bankruptcy. You may be able to remove a second mortgage lien from your house. You can also discharge some debts that can not be discharged in a Chapter 7 bankruptcy.
You may need to file a Chapter 13 bankruptcy if you have equity in a home or have other assets that need to be protected. You may also have to file a Chapter 13 bankruptcy if your income is above a certain amount based on the size of your household.
Chapter 13s are very complex cases and should not be attempted without the assistance of an experienced bankruptcy attorney. Contact us or call us today at 757-320-2010. We can meet with you and discuss your situation. There is no charge for the initial consultation and we will let you know what will be best for you.
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How do I know if I'm eligible to file for Chapter 13 bankruptcy in Virginia?
Most people who want to file a Chapter 13 bankruptcy will discover that they are eligible to do so. This is much different than Chapter 7 bankruptcy, which has strict guidelines when it comes to qualifying. There are just a few major requirements when it comes to figuring out whether or not you can file for Virginia Chapter 13 bankruptcy:
You must have a reliable, steady source of income.
The whole principle of Chapter 13 bankruptcy is making a regular monthly payment over three to five years. You must have enough income to pay your regular living expenses as well as the payment to the bankruptcy court. When determining if you qualify for Chapter 13, your bankruptcy lawyer must review how much you pay for necessities like food and shelter and how much you will have left to pay on your debts. These expenses will be based on where you live in the Tidewater area.
There's a waiting period if you've filed for bankruptcy before.
You are allowed to file for Chapter 13 bankruptcy if you've filed for bankruptcy before, but there are waiting periods between filings that must be bet in order for you to receive a discharge. If you previously filed for Chapter 13 and received a discharge, you must wait two years from the filing date of the first case to be able to file a second case and receive a discharge; if you previously filed for Chapter 7, 11, or 12, that length of time is extended to four years. If the required time period has not passed since the filing date of the previous case, you may still file a new Chapter 13 case but you will not receive a discharge at the end of your payment plan. These time periods only apply if you received a discharge in the previous case. If the case was dismissed, you may refile at any time unless the earlier case was "dismissed with prejudice".
Debts cannot exceed caps set by the government.
There is a limit to the amount of secured and unsecured debt that you can have if you want to file for Chapter 13 bankruptcy. The specific amounts increase every year based on the Consumer Price Index. Currently, you can have up to $360,475 in unsecured debts and $1,081,400 in secured debts.
There are other requirements, but these are the primary ones that should help determine if you are eligible to file for Chapter 13. If you'd like to learn more about filing for Chapter 13 bankruptcy in Virginia, contact Hampton Roads Legal Services at 757-320-2010.
Can you stop my home foreclosure?
Yes! In a Chapter 13 Bankruptcy case, we can stop foreclosure by proposing a plan whereby you bring your mortgage current over time while continuing to make the regular monthly mortgage payment. You will have to resume making your regular monthly payments after your case is filed. You must have the ability to make those regular monthly payments, pay your basic living expenses and make a payment to the Court to bring your mortgage current. Your payment plan to the court will go from three to five years,depending on your income and other debts.
In a Chapter 7 Bankruptcy case, if you are not current on your payments, the Bankruptcy will postpone the foreclosure until your case is discharged or until your creditor/mortgage holder files a motion for, and is granted, "relief from stay." Your mortgage company may be willing to do a loan modification after you file a Chapter 7 bankrutpcy. However, if you file a Chapter 7 bankruptcy when you are behind on mortgage payments, you may not be able to keep your house.
If you are concerned about losing your home, please contact us as soon as possible. Foreclosure deadlines are not something to take lightly. Once your home is foreclosed, there is very little we can do to help you. Read our testimonials to see other clients who's homes have been saved at the last minute, and be sure to request one of Attorney Pfeiffer's books to guide you through the process. Again, it is very important that you contact a reputable attorney about your foreclosure before it is too late.
Can you remove a lien on real estate in a Chapter 13 bankruptcy?
There are three basic types of liens on real estate. There is a mortgage lien where you have borrowed money and pledged the house as collateral for the loan. This may be the loan to purchase the house or a refinance of the original mortgage. It also includes home equity loans or lines of credit and second mortgages. You may also have a mortgage lien if you have borrowed money for home improvements. The second type of lien on real estate is a judgment lien. This is where someone you owe money to has filed a lawsuit against you and obtained a judgement. The creditor can then record the judgment as a lien against your real estate. The third type of lien is a tax lien. This can be established by state law or by recording the lien in the public records. If you owe real estate taxes, the city or county that you owe the taxes to has a lien under state law against the real estate. If you owe money to the IRS or the state taxing authority, they can file a lien against all of your property, including your real estate.
If your property is worth less than is owed on the first mortgage, there are ways to remove the subsequent liens in a Chapter 13 bankruptcy. How and when these liens can be removed depends on the type of lien. If you have a second mortgage or home equity lien of credit, judgments or tax liens, you need to meet with an experienced bankruptcy attorney to discuss what can be done in your situation.