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In a NutshellExempt property, such as a car or trade implements, is free of the claims of your creditors and can’t be taken by your trustee to be liquidated. Laws in Virginia determine the types as well as the amount of exempt property.
Written by the Upsolve Team. Legally reviewed by Attorney Andrea Wimmer
Updated September 23, 2020
While the U.S. Bankruptcy Code applies in almost the same way throughout the country, there is one important exception you should be aware of; and that is the ability to protect your assets through bankruptcy exemptions. In many instances, the federal laws govern the bankruptcy process exclusively, but, in the context of bankruptcy exemptions, federal law allows each state to determine whether they would like to use the bankruptcy exemptions delineated under the federal law or create and use their own. Each state in the US has the choice of applying the federal bankruptcy exemptions or using their own list of asset values that will be protected or exempt from creditors in bankruptcy. While some states in the country allow people to choose between exemptions drafted by state lawmakers and federal exemptions, residents of Virginia who file for bankruptcy can only use the state exemptions expressly provided for in the state law.
In Virginia, you are not permitted to use the federal bankruptcy exemptions. You can use Virginia’s state exemptions and, if applicable, the federal nonbankruptcy exemptions.
Debt, such as student loans and medical bills, can get out of control quite quickly, even when you are generally good when it comes to managing your money. Often, all it takes is just one unexpected health complication to accrue a mountain of healthcare bills, or losing a job to cut off the family's primary source of income suddenly. A lot of people in Virginia live paycheck-to-paycheck. This is why when an unfortunate or life-changing event occurs, then any type of financial security, you assumed you had may go flying out the window. It may be time to file for Virginia bankruptcy if the threats of repossession, foreclosure, and wage garnishments are becoming too much. When you file for bankruptcy in Virginia, you can generally preserve or protect some items, such as your car and home, from the bankruptcy trustee.
Despite the stigma and many myths often associated with bankruptcy in the state, the process could help you end creditor harassment while discharging certain debts that you can’t repay. Items you are permitted to keep are called exempt assets. Virginia bankruptcy laws let you keep the property or assets on your exemption list during the bankruptcy process while your trustee collects and sells only your nonexempt assets in order to repay your creditors. If you file for Chapter 7 bankruptcy in Virginia, you may be able to protect most of your valuable possessions, such as a car and retirement accounts.
An exemption list specifies the maximum amount under the law for each exempt asset. Your trustee can only take items if their value exceeds the maximum allowed value. Keep in mind that the details of the bankruptcy process in Virginia will depend on your specific circumstances as well as the type of bankruptcy that you decide to file. The best bankruptcy attorneys in the state protect as many of your valuable assets as possible.
Exempt property, such as a car or trade implements, is free of the claims of your creditors and can’t be taken by your trustee to be liquidated. Laws in Virginia determine the types as well as the amount of exempt property.
While the U.S. Bankruptcy Code applies in almost the same way throughout the country, there is one important exception you should be aware of; and that is the ability to protect your assets through bankruptcy exemptions. In many instances, the federal laws govern the bankruptcy process exclusively, but, in the context of bankruptcy exemptions, federal law allows each state to determine whether they would like to use the bankruptcy exemptions delineated under the federal law or create and use their own.
Each state in the US has the choice of applying the federal bankruptcy exemptions or using their own list of asset values that will be protected or exempt from creditors in bankruptcy. While some states in the country allow people to choose between exemptions drafted by state lawmakers and federal exemptions, residents of Virginia who file for bankruptcy can only use the state exemptions expressly provided for in the state law. In Virginia, you are not permitted to use the federal bankruptcy exemptions. You can use Virginia’s state exemptions and, if applicable, the federal nonbankruptcy exemptions.