Virginia Beach Chapter 7 Bankruptcy Attorneys

How Does the Chapter 7 Liquidation Process Work? What Can I Keep?

To eliminate eligible debts through Chapter 7 bankruptcy, you must agree to “liquidate” your non-exempt assets. The trustee assigned to your case uses the proceeds of liquidation to compensate your creditors. While the idea of liquidation can sound frightening, the goal isn’t to punish you or leave you with nothing. The reality is that many Chapter 7 filers lose little to nothing thanks to Virginia’s exemptions, which allow you to protect many types of essential assets.

Some of the most common Virginia exemptions include:

• Homestead exemption. As an individual filer, you can protect up to $50,000 of equity in your home or a property where your dependents live. You can protect an additional $500 of equity for every dependent you currently support.
• Vehicle exemption. You can protect up to $10,000 of equity in one motor vehicle. 
• Household and personal property exemption. Virginia's laws offer specific exemptions for a variety of common household and personal items. You can exempt up to $5,000 for household furnishings, including appliances, and up to $1,000 for clothing. You can also protect up to $3,000 in firearms and $5,000 in family heirlooms. Wedding and engagement rings are completely protected from liquidation. 
• Tools of the trade exemption. This exemption protects up to $10,000 in value for tools, books, instruments, and equipment that you use in your occupation or trade. This can be essential if you are self-employed or have a specialized job.
• Retirement account exemption. You can protect many types of retirement accounts, including 401(k)s, 401(3)s, and more.
• Wildcard exemption. Every individual who files for Chapter 7 bankruptcy in Virginia is entitled to $5,000 “wildcard” exemption that can be used to protect just about any type of asset, whether that’s cash, personal property, or equity in real property. If the homestead exemption doesn’t quite cover the total value of your equity in your Asheville Park home, for example, you can use some or all of the wildcard exemption to cover the difference. If you are 65 years of age or older, your wildcard exemption doubles to $10,000. You also receive an additional $500 wildcard exemption for every dependent you currently support. 

Our attorneys understand how to fully leverage these and other exemptions. We can carefully analyze your financial situation and apply all available exemptions to protect your property. Our goal is to save as many of your assets as possible, allowing you to discharge your debt without sacrificing the things you need for your fresh start.