When you file a Chapter 7 bankruptcy in Virginia, you have the right to protect certain types of assets. This is called exempted property and means that the Chapter 7 Trustee cannot take the asset to sell. If the item is not properly protected, the trustee has the right to take the asset and sell or liquidate it to pay unsecured creditors. Some of the exemptions only have to be listed on the Schedules that are filed with the court. However, for other assets an additional document, called a Homestead Deed, must be filed with the State Court. There is a strict deadline for when the Homestead Deed must be delivered to the Court for recording. If the deadline is missed, you cannot protect certain assets and they must be turned over to the trustee. If the assets are not turned over to the trustee, the trustee will request that the debtor be denied a discharge. If the discharge is denied, the debts listed in the bankruptcy can never be discharged or wiped out in a bankruptcy.
I was in court recently and observed a case where the debtor had filed a Chapter 7 without the assistance of an attorney. At the time she filed her case, she was to receive over $6,000 in tax refunds. She took a Homestead Deed to the state court but did not have anything to show when she took it. The Homestead Deed was recorded two days after the deadline. As a result, she has to turn over the entire $6,000 of tax refunds. If she had retained an attorney, she would have probably paid the attorney less than $2,000 and would have been able to retain her full tax refunds.
Don't let this happen to you. Contact Hampton Road Legal Services at 757-320-2010 to schedule an appointment for a consultation. We can set you up on an affordable payment plan and make sure that you do not lose any of your assets.