Filing for Chapter 7 bankruptcy is a difficult decision to reach, especially when you want to keep your car and home, but the courts design the rules surrounding these possessions to provide some sense of relief. So long as you meet certain conditions when you file, you may be able to retain your property during a Chapter 7 bankruptcy.
Virginia bankruptcy exemptions
In Chapter 7 bankruptcy, the lender sells most of your assets to pay off creditors, but Virginia offers exemptions that allow you to protect certain assets from liquidation. For example, you can use the homestead exemption to protect up to $25,000 of equity in your home. If you’re 65 or older, this amount increases by $5,000.
This means if the equity in your home is less than or equal to the exempt amount, you are more likely to keep it. Virginia also allows an exemption of up to $6,000 in equity for one vehicle, and this means if the equity in your car is less than this, you can likely keep it during the bankruptcy process.
Factors that impact keeping your assets
Several factors can impact whether you’re able to keep your car and home, including:
- The total amount of equity you have in each asset
- Whether you’re current on your mortgage or car payments
- If the asset is considered necessary for living and working
In many cases, a home or vehicle qualifies for exemption based on these factors.
A different kind of fresh start
Filing for bankruptcy can be a tough process, but it also offers a chance to rebuild your financial future. With the right steps, you can protect key assets and start moving toward financial stability by taking control of your situation because it helps you create a more secure path forward.