You just got laid off from your job. You owe hundreds of thousands of dollars in debt. You try to pay down your loans, but all you do is dig a hole deeper and deeper into debt. Should you consider bankruptcy?
Bankruptcy has helped many Virginians start over financially because it enables many of their debts to be erased for good and gives them a fresh start. However, it is important to understand that bankruptcy is not a magic cure for all your debt. While most debts can be discharged in bankruptcy, some debts will remain. Read on to learn more about how bankruptcy will affect your debts.
Types of Bankruptcy
The type of bankruptcy you choose determines the debts that can be discharged. Most consumer bankruptcy cases fall under Chapter 7 or Chapter 13.
A Chapter 7 bankruptcy is for debtors who want to wipe out their debts and have little to no excess income after monthly living expenses are paid. Ideally, to fall under this category, you have very few assets and want to get rid of unsecured debt. In a "no-asset" Chapter 7 bankruptcy case, there are no non-exempt assets to liquidate to distribute to creditors. In an "asset" Chapter 7 bankruptcy case, non-exempt assets will have to surrendered. Most of these cases are "no-asset" Chapter 7 cases. However, if you have assets to protect or you make too much money, you may still qualify for bankruptcy, but it may have to be under Chapter 13.
A Chapter 13 bankruptcy is primarily geared toward those who have a h