Stop Foreclosure in Virginia

Foreclosure MIGHT be the better option for you.

For most homeowners, bankruptcy is often the last resort to prevent foreclosure. If you are facing foreclosure, consider the other options before thinking of bankruptcy. Filing for bankruptcy can have a disastrous affect on your credit. In fact foreclosure might be the lesser of the two evils.

When you file for bankruptcy, you loose all control over your finances. A court appointed bankruptcy will administer all your financial activities. The bankruptcy trustee will take over all your non-exempt assets and sell them to pay off your creditors. Bankruptcy will discharge most of your debts. But some debts are non-dischargeable. The most common types of non-dischargeable debts are

• Certain types of tax claims,
• Debts not set forth by the debtor on the lists and schedules the debtor must file with the court,
• Debts for spousal or child support or alimony,
• Debts for willful and malicious injuries to person or property,
• Debts to governmental units for fines and penalties,
• Debts for most government funded or guaranteed educational loans or benefit overpayments,
• Debts for personal injury caused by the debtor’s operation of a motor vehicle while intoxicated,
• Debts owed to certain tax-advantaged retirement plans, and
• Debts for certain condominium or cooperative housing fees.

When you file for bankruptcy, all your assets except the exempt properties become the property of the bankruptcy trustee. The Bankruptcy Code defines “property” very broadly as all legal and equitable interests of the debtor and any property that is community property of the debtor and his spouse.  Even the property that you select as exempt property is property of the estate until the exemption claims are confirmed. The exempt properties are necessary for your fresh start. The exemption claims are confirmed before the creditors are allowed to participate in the distribution of the non-exempt property.

Bankruptcy filing includes costs payable to the government in the form of bankruptcy fees. Besides bankruptcy fees, you may also have to pay attorneys fees if you hire an attorney. While the overall bankruptcy process is simple, it may get complex at times and it is best to hire an attorney to do the work for you. Bankruptcy proceedings must be filed in a federal court having jurisdiction over your place of residence. State courts cannot hear bankruptcy petitions. Bankruptcy is governed by federal laws.

Bankruptcy is a legal procedure for dealing with the debt problems of individuals and businesses and discharges financial obligations. This procedure is covered under Title 11 of the United States Code (the Bankruptcy Code). The vast majority of cases are filed under the two main chapters of the Bankruptcy Code, which are Chapter 7 and Chapter 13.

Chapter 7 is the more common form of bankruptcy filing. A filing under chapter 7 is called liquidation. It is a kind of liquidation proceeding in which the debtor is allowed to keep aside exempt property whereas a trustee appointed by the court collects his non-exempt assets, sells them and pays off the creditors through the sale proceeds.

Chapter 13 bankruptcy proceeding allows the individual debtor to pay down his debts, either the entire amount or a part of it, with the help of a payment plan under the supervision of the court. Debtors filing this chapter can keep their assets with them while they follow the plan or after they have paid off the required portion of debt. It involves the rehabilitation of the debtor to allow him or her to use future earnings to pay off creditors.

Chapter 7 bankruptcy dissolves all debt and absolves you of the responsibility to pay it. Chapter 13 bankruptcy will reorganize your debt and creates a payment plan.

Choice of these plans is never easy. In fact it is not easy to decide whether foreclosure is worse than bankruptcy! It is always advisable to consult an attorney with your specific problems.