Q What is a homestead exemption in Virginia Chapter 7 bankruptcy law and does it mean I can keep my home?
AChapter 7 liquidation bankruptcy exemptions vary state by state. Unfortunately, Virginia carries one of the more difficult restrictions for homeowners seeking relief under Chapter 7 bankruptcy law.
Virginia does not include a primary residence exemption like those offered by many other states, that will allow homeowners to keep a home that holds significant equity in the event of a Chapter 7 filing. Instead, Virginia offers a “homestead” exemption of $5,000, plus $500 for each dependent resident. Disabled veterans or individuals over the age of 65 are allowed $10,000 in equity in their home.
If your home is appraised over the minimum, it can be sold by the trustee toward your standing debts. If you have a regular source of income and own significant equity in your Virginia home, you may want to file for Chapter 13 repayment bankruptcy, instead, as it will typically allow you to keep the majority of your assets.
Whatever the case, you are best served to speak with a professional educated in financial law before filing, so you can know your options and improve your chances of a successful petition.
If you have questions about the homestead exemption or any other aspect of Chapter 7 bankruptcy, talk to a bankruptcy lawyer VA at The Strong Law Firm today. We assist clients struggling with Virginia, Maryland, and District of Columbia debt. Call our offices at 877-344-8189 to schedule a free and confidential consultation today. Get in touch with us online by filling out our quick contact form.