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Robert traded his 2007 Ford Mustang on a new Ford Focus shortly before filing Chapter 13 bankruptcy.
Virginia bankruptcy lawyer Kaitlin Vaillancourt worked with me on this Chapter 13 appeal.
Thomas Gorman, the Chapter 13 trustee, objected that was “bad faith.” Robert said it was prudent planning–he needed a newer, more efficient car to get through a five year Chapter 13 plan.
The bankruptcy judge agreed with Robert. And today the US District Court affirmed.
You can read it here. Wolf appeal decision
Most people who file bankruptcy never go to the bankruptcy courthouse.
About a month after your bankruptcy papers are filed, you have to attend a bankruptcy trustee hearing. (Also called a “meeting of creditors” or a “341 hearing.”) Those routine and they are done on Zoom.
When something is NOT routine, we have to go in front of the bankruptcy judge at the bankruptcy courthouse.
Where is that bankruptcy courthouse?
Here’s the address for the Alexandria Virginia Bankruptcy Courthouse.
U.S. Bankruptcy Court
200 S. Washington St.
Alexandria, VA 22314-5405
That’s on the corner of Washington Street and Prince Street. Here’s a picture:
200 S Washington St. Enter the side door, on Prince St. Phones are NOT allowed in the courthouse.
The bankruptcy court in Alexandria VA serves all of Northern Virginia. The Alexandria Virginia Bankruptcy Court serves Alexandria, Arlington, Falls Church, Fairfax, Fairfax City, Loudoun, Prince William, Manassas and Manassas Park, Fauquier, and Stafford.
Leave your phone in your car
You can’t bring your phone into the courthouse. That’s a security requirement and there are no exceptions.
Also, for security reasons the front door is now locked. You need to enter by the side door on Prince Street. And you’ll need your drivers license or picture ID.
The Alexandria bankruptcy court has two judges
The courtroom for Judge Brian F Kenney is on the second floor. Judge Klinette H Kindred is on the third floor. (If you are not sure which judge you have look at the three letters after your case number. BFK stands for Judge Kenney. KHK stands for Judge Kindred.)
200 S Washington St – Google Maps
The bankruptcy court in Alexandria VA serves all of Northern Virginia. The Virginia bankruptcy court is a federal court. The Federal Court system divides Virginia into Eastern and Western districts.
We’re in the Eastern District, Alexandria Division
The Eastern District has four divisions: Alexandria, Richmond, Newport News and Norfolk.
The Alexandria Virginia Bankruptcy Court serves Alexandria, Arlington, Falls Church, Fairfax, Fairfax City, Loudoun, Prince William, Manassas and Manassas Park, Fauquier, and Stafford.
The FDCPA requires that a debt collector sue you in the right judicial district.
Virginia is divided into Judicial Districts. You can see that map here.
In Northern Virginia, most district are one county. But Loudoun and Fauquier share one district. Stafford is in with Fredericksburg and Spotsylvania. So if you live in Stafford, they can sue you in Spotsy. And if you live in Fauquier, they can sue you in Loudoun. Right?
That’s what we thought.
But the Seventh Circuit just came down with a new rule for FDCPA Venue.
They said basically if there’s a separate courthouse in each county, then they have to sue you in the right county.
Now the Seventh Circuit is over in the mid-west. The Fourth circuit are the judges that oversee the courts in Virginia. So this Seventh Circuit rule does not necessarily apply here. But it might.
I hate it when debt collectors do illegal stuff to my bankruptcy clients. And I sue them when I can.
So I’m keeping an eye on whether other judges agree with the Seventh Circuit on this.
What Is Bankruptcy?
Bankruptcy gives a fresh start to honest debtors. That’s what the Supreme Court said more than seventy years ago. A fresh start to honest debtors and a clear field for the future. (As an aside, we know how hard it can be to decide if bankruptcy is right for you, that’s why we encourage you to read our many client reviews.)
There are about as many bankruptcies in America each year as there are divorces–about a million. This year there will be ten thousand in Northern Virginia.
Recently the biggest cause of bankruptcy in Northern Virginia is people getting caught in the real estate crisis, and people losing their jobs in the recession. Historically, most people filed bankruptcy because of medical problems, or job loss. Many people because of a breakup of a marriage or loss of a spouse. Some people just charged too much when things looked good.
What Are The Bankruptcy “Chapters”?
You have two main choices under the bankruptcy law–Chapter 13 and Chapter 7.
Chapter 13 is a debt adjustment. The court works out a payment plan you can afford. Chapter 13 may be required for higher income people. The new bankruptcy law was promoted as an effort to force more people to file Chapter 13. Mostly it hasn’t. Bankruptcy lawyers have been pretty successful at working with or working around the requirements of the new law.
Chapter 7
Under Chapter 7, most unsecured debts are discharged–they’re gone. (You usually cannot be discharged from taxes, student loans, or child support. You also cannot be discharged from credit cards you agreed to pay as part of your divorce.)
Our law firm thinks that Chapter 7 is better for most people. It’s over quicker and gets you back to good credit much sooner. We try everything we can to qualify people for Chapter 7 if they need Chapter 7.
Chapter 13
Chapter 13 is good to stop the foreclosure on your house and give you time to catch up.
Chapter 13 can also be used creatively to fix a variety of unusual problems. (Some of which I can’t put in writing). If you agreed in your divorce to pay certain bills–I’m not talking about support here, but if your property settlement was a really a “debt” settlement–Chapter 13 can get rid of those.
(You hear in the news about Chapter 11. Chapter 11 is for business–usually big business. Chapter 11 is a plan to pay some debts, wipe out others, and keep the business going. People who owe a million dollars on their house may be required to file Chapter 11–we’re starting to see some of that now.)
Chapter 13 is price controlled by the bankruptcy judges. In August 2023, they set the fee at $6339.
We get about half up front, and the rest out of the Chapter 13 payment you make to the court.
So up front, $700, $1000, and $1100. Then $3529 from your payments–that works out to $65 a month over a five year Chapter 13.
Here’s the Chapter 13 fee Agreement
Your Bankruptcy Papers
“Here are the papers we sign and file, to get your bankruptcy officially started. This is a half-hour video.”
When you’re in chapter 13, you don’t want a tax refund. Why? If you get a refund more than $250.00, you have to send it in to the bankruptcy trustee. So you don’t want to over-withhold.
You also don’t want to under-withhold. Why? Because on April 15, you’ll owe a tax payment. And you probably won’t have money available to pay it.
So you want as far as possible to break even when the taxes are filed.
In Chapter 13, as far as possible, you want to break even when you file your taxes.
That can be tough to do.
In January 2020, the IRS released a new calculator, that they claim will help you be accurate. Here it is. Hope it helps.
What About ….?
What about my bank account?
Filing bankruptcy does not force you to close your bank account. (Many credit unions will fire you as a customer.) If your credit is already so bad you can’t open an account, try TD Bank, a new bank in Northern Virginia. Another option is Wood Forest Bank, in some of the larger Walmarts, including the one on Liberia Avenue in Manassas..
What about immigration status?
Filing for Bankruptcy will not hurt your immigration status. You can still get a green card– you can still become a citizen, exactly the same as before.
What about my tax refunds?
Filing for Chapter 7 Bankruptcy will not stop your tax refunds.
Will my employer know?
Filing Chapter 7 Bankruptcy will not involve your employer.
Will I be garnished?
Filing for Chapter 7 Bankruptcy does not mean you will be garnished– it makes it illegal for your credit cards and medical bills to garnish you.
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