When you file for bankruptcy, you can keep certain types of property. The common myth that you will lose everything you own misleads many people who could benefit from bankruptcy because of uncontrollable debt.
Review the assets you can retain if you decide to file for bankruptcy in Virginia.
Primary residence
If you own a home, you can keep $5,000 in equity plus $500 for each dependent who lives with you. The base amount increases to $10,000 if you are a disabled veteran or older than age 65. To claim this exemption, you must submit a homestead declaration prior to your bankruptcy petition. Many residents also decide to use the $25,000 wildcard exemption, new as of July 2020, to retain home equity.
Additional exemptions
These are some of the most common exempt assets you can keep if you file for bankruptcy in Virginia:
- Up to $6,000 in equity in an automobile
- The balance of medical savings or health savings accounts
- Up to $20,000 in personal property that belonged to a deceased spouse
- Damages awarded in personal injury lawsuits
- Medical devices
- Pets
- Up to $5,000 in family heirlooms and portraits
- Up to $3,000 in weapons
- Up to $5,000 in furniture and decor for the home
- Up to $1,000 in clothing
- Qualifying retirement accounts and pensions
In some states, bankruptcy filers can decide between state and federal exemptions. If you live in Virginia, however, your bankruptcy case will be subject to the state exemptions. Married couples who file for bankruptcy together can double these exemption amounts.