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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.
The post Miscellaneous Virginia Bankruptcy Questions appeared first on Robert Weed Bankruptcy Attorney.
Many clients have contacted us regarding defaulted SBA EIDL loans and the period of time in which the SBA or the Government may sue them to collect on the defaulted loan (the statute of limitations). The law and rules, as noted below are complex and vary based on the facts of the case.
- The Federal Government has 6 years to commence a lawsuit (statute of limitations) against the entity or person that obtained the EIDL loan from the SBA and defaulted.
- The Federal Government also has 6 years to sue the guarantor of a defaulted SBA EIDL loan.
- The 6 years runs from the date the borrower defaulted on the debt or the last time the borrower made a payment or otherwise acknowledged the debt in writing.
- However, the Federal Government also takes the position that the statute of limitations for fraud on an SBA EIDL loan is 10 years.
- Tax Refund Offsets - The IRS generally has 10 years to collect outstanding taxes, penalties, and interest by offsetting tax refunds. This 10-years starts from the date the tax return was filed or the date the tax was assessed.
- Federal Payments Offset - Federal agencies generally have 10 years to refer eligible debts to the Treasury Offset Program for administrative offset of federal payments like Social Security retirement and disability benefits.
- Salary Offset - Salary offset refers to withholding money from a federal employee's disposable pay to collect a debt owed to the federal government. There is generally no statute of limitations on federal salary offsets.
- Administrative Wage Garnishment - This is garnishment of pay as a means of collecting defaulted federal debt, even for a non-government employee. There is generally no statute of limitations as long as the underlying federal debt is still valid and legally enforceable.However, only 15% of a person’s pay may be offset thru wage garnishment.
- This post does not discuss the statute of limitations for criminal penalties or actions by the Federal Government, which is beyond the scope of this post.
Individuals or businesses with questions about SBA EIDL loans should contact Jim Shenwick, Esq [email protected] 917 363 3391Please click the link to schedule a telephone call with me.https://calendly.com/james-shenwick/15minWe held individuals & businesses with too much debt!
Is it Better to File Bankruptcy Chapter 7 or Chapter 13?
It is essential to keep in mind that different types of bankruptcy are suited for different filers, depending on their resources, obligations, and short- and long-term goals. Seeking legal advice early on is advisable as you look closely into your financial problems and work toward making a decision that will rebuild your financial future.
A successful bankruptcy filing under Chapter 7 can wipe out different types of debt. That means that a debtor will no longer need to repay debts they owe from creditors. Alternatively, a Chapter 13 bankruptcy declaration can help you pay back what you owe to lenders while keeping your assets. If you plan to file for bankruptcy, seek legal aid right away.
Short Summary:
- The choice between Chapter 7 and Chapter 13 bankruptcy depends on individual circumstances, resources, and financial goals.
- Chapter 7, known as liquidation bankruptcy, provides immediate debt elimination, freeing you from the obligation to repay certain debts.
- Chapter 13 is beneficial for catching up on late payments and restructuring debts, although it may be costlier and involve monthly payments.
- Eligibility for Chapter 7 or Chapter 13 is determined by factors such as income, properties, and debt amounts. Understanding specific requirements, waiting periods between filings, and utilizing online tools like the Quick Median Income Test are crucial steps before choosing a bankruptcy type.
- Chapter 7 is generally recommended unless specific circumstances favor Chapter 13, such as challenging non-dischargeable debts, significant asset equity, or the inability to file Chapter 7 again within eight years.
- Chapter 13 may be suitable for retaining assets, catching up on overdue secured debt payments, or addressing specific financial challenges that Chapter 7 cannot adequately resolve.
Is There Any Difference Between Bankruptcy Chapter 7 vs 13?
Bankruptcy allows for either complete debt elimination or an extended repayment period. Individuals facing insolvency choose bankruptcy since they cannot settle their bills from debts exceeding their income. Chapters 7 and 13 bankruptcies help provide financial freedom and immediate relief.
In achieving this, Chapter 7 (also known as liquidation bankruptcy) helps those who cannot afford to repay their debts (like credit card debts, medical debts, and personal debts) by eliminating some of them. Chapter 13 aids higher-income individuals with valuable assets in reorganizing their debts.
Choosing Between Bankruptcy Chapter 7 vs 13 in Oregon
Choosing between these two types of bankruptcy is not up to you. Whether you want to file for Chapter 7 or Chapter 13 will always be based on your qualifications. Those correspond to your income, properties, and the amount of debt you have.
When Choosing Chapter 13 in OR
Chapter 13 is about repaying what you owe to creditors over three to five years. It lets you keep everything you own. You can also use it to catch up on late payments, like saving your home from foreclosure or keeping your car. If you have a debt you cannot eliminate, Chapter 13 allows you to force a payment plan on the creditor.
But it can be expensive, and some may find it challenging to make monthly payments. Businesses cannot also use Chapter 13. Business owners should explore small business bankruptcies instead.
When Choosing Chapter 7 in OR
Choosing Chapter 7 bankruptcy in Oregon is popular for its speed and affordability. It is a quick process, usually completed in three to four months. You also do not have to pay anything to creditors. This option is good if you own essential items for daily life but not much more. But if you have extra assets, the Chapter 7 trustee may sell non-essential items to pay creditors.
Unlike Chapter 13, there is no payment plan to catch up on overdue mortgage or car payments. So you risk losing your home or car if you are behind on payments when you file.
What Do I Need to Qualify for Chapter 7 or Chapter 13 Bankruptcy in Oregon?
You must meet specific requirements to qualify for Chapter 7 or Chapter 13 bankruptcy in Oregon. If you have filed before, check if enough time has passed before filing again. There is a waiting period between filings.
Qualifications for Chapter 7 in Oregon
To qualify for Chapter 7 bankruptcy, your family’s income must be lower than the median for a similar-sized family in your state. Just add up your family’s gross income from the last six months, double it, and compare the result with income charts on the U.S. Trustee’s website.
You can use the Quick Median Income Test online for an easy check. If you still earn too much, you might qualify after the second part of the “means test.” If your remaining money after deducting expenses isn’t enough for a Chapter 13 plan, you’ll likely qualify for Chapter 7.
Qualifications for Chapter in Oregon
Qualifying for Chapter 13 involves considering priority nondischargeable debt, nonexempt property value, or disposable income. The most challenging part is often the monthly payment.
Understanding these requirements is crucial before choosing between these two types of bankruptcy.
How do I Apply for Chapter 7 Bankruptcy in Oregon?
When filing for Chapter 7 bankruptcy in Oregon, first, take the means test. Then, gather these documents:
- a list of who you owe money to and how much,
- a list of your belongings and their values,
- your most recent tax return, and
- your pay stubs or income proof.
How do I apply for Chapter 13 Bankruptcy in Oregon?
For Chapter 13 bankruptcy in Oregon, start by submitting a request to the bankruptcy court. Provide details about your creditors, income, expenses, and belongings. Also, propose a plan for repaying debts. After filing, there’s a meeting where creditors can raise concerns. If there are no issues or if they’re resolved, the court approves the plan, and you begin making payments accordingly.
Should I Pick Chapter 7 or Chapter 13 Bankruptcy? What’s Best for Me?
In deciding between Chapter 7 and Chapter 13 Bankruptcy, Chapter 7 is usually recommended, unless you have specific reasons for Chapter 13.
One situation where Chapter 13 might be beneficial is if you have taxes or other debts that can’t be discharged and are challenging to handle on your own. Also, Chapter 13 might be better if you have a sole proprietorship business needing bankruptcy court protection, or if you can’t file Chapter 7 again within eight years. Opting for Chapter 13 lets you retain certain assets and catch up on overdue secured debt payments.
For most other cases, Chapter 7 is likely better because it finishes faster, allowing you to rebuild your credit sooner. Also, considering that this is the most affordable option, most especially, for those with limited income and few assets owned.
The Need for Legal Services of a Reliable Local Attorney
If you are currently encountering grave financial difficulties, it is best to seek legal advice early on. Consider all of your options, including negotiating directly with the debt collector or creditor or filing for bankruptcy.
If you are planning to file bankruptcy, or are wondering if it is the best course of action to take, you need a lawyer who can help you solve your financial problems.
For individuals who are struggling financially because of unemployment, growing medical expenses, credit card debt, marital issues, or other reasons, filing for bankruptcy may be their only choice.
Here, a competent Portland bankruptcy law firm can help. Consult with a dedicated Oregon bankruptcy lawyer at Northwest Debt Relief Law Firm today.
Updated daily, this blog will keep you informed on the latest bankruptcy news! 
Learn more about how Bankruptcy works and what you need to know.