How to File Bankruptcy in Virginia

In most respects, filing for bankruptcy in Virginia isn’t any different than filing in another state. The bankruptcy process falls under federal law in Virginia.

By , Attorney University of the Pacific McGeorge School of Law
Updated 10/05/2023

Facing financial challenges is a part of life. But if you're one of the millions struggling financially due to a job loss, illness, or another event in Virginia, bankruptcy can help. Here, you'll find an explanation of Chapters 7 and 13, checklists to help you understand the process and stay organized, and Virginia's property exemption laws and filing information.

Because we couldn't include everything in one article, you'll want to check out its companion, What You Need to Know to File for Bankruptcy. You'll find lots more details there.

How Does Bankruptcy Work in Virginia?

In most respects, filing for bankruptcy in Virginia isn't different from filing in another state. The bankruptcy process falls under federal law, not Virginia state law, and works by unwinding the contracts between you and your creditors. That's what gives you a fresh start.

But Virginia's laws come into play significantly because they determine the property you can keep in your bankruptcy case. You'll also need to know other filing information, which we explain after reviewing some basics.

How Do I Choose the Right Bankruptcy Chapter in Virginia?

Most people file either Chapter 7 or Chapter 13, and you're not alone if you don't know how the two differ. The short explanation below and our handy Chapter 7 versus 13 chart will help clarify things.

Filing for Chapter 7 in Virginia

Chapter 7 is often a bankruptcy filer's first choice for several reasons. It's quick, taking only a few months to complete. And it's cheap. You don't pay anything to creditors.

Chapter 7 bankruptcy works well for people who own mainly the essential items needed to live and work and not much else. People with more assets could lose them in Chapter 7 because the Chapter 7 trustee, the official responsible for the case, sells unnecessary luxury items and distributes the proceeds to creditors. For instance, you might have to give up your RV, baseball card collection, or timeshare in the Bahamas, even your house or vehicle if you have more equity than you can keep.

Also, unlike Chapter 13, Chapter 7 has no payment plan option for catching up on late mortgage or car payments. So you could lose your home or car if you're behind on the loan when you file.

Filing for Chapter 13 in Virginia

Chapter 13 involves repaying creditors some or all of what's owed using a three- to five-year repayment plan. Chapter 13 filers keep everything they own, and the payment plan provides ways to improve sticky financial situations.

For instance, you can catch up on late payments and save your home from foreclosure or your car from repossession. Also, if you need time to repay a debt you can't eliminate or "discharge" in bankruptcy, you can use Chapter 13 to force a creditor into a payment plan and repay your balance over time. Learn more about when filing for Chapter 13 is better than Chapter 7.

The biggest downside to this chapter? It can be expensive. Many people can't afford the monthly payment. Also, businesses can't file a Chapter 13 case. If you're a business owner, it's a good idea to learn about the ins and outs of small business bankruptcies before choosing the bankruptcy right for you.

Will Filing for Bankruptcy in Virginia Erase My Debts?

Bankruptcy wipes out many bills, like credit card balances, overdue utility payments, medical bills, personal loans, and more. You can even get rid of a mortgage or car payment if you're willing to give up the house or car that secures the debt. (Putting property up as collateral creates a "secured debt." If you don't pay what you owe, the lender recovers the property.)

But you can't discharge all debts. You'll want to be sure that bankruptcy will discharge (get rid of) enough bills to make it worthwhile.

For instance, nondischargeable debts, like domestic support arrearages and recent tax debt, won't go away in bankruptcy. Also, student loans aren't easy to wipe out because you'd have to win a separate lawsuit (however, in 2023, steps have been taken to ease the student loan discharge process with a new student loan bankruptcy form).

Learn more about student loans in bankruptcy.

How Do I Qualify for Chapter 7 or Chapter 13 Bankruptcy in Virginia?

You won't be surprised to learn that qualifying for bankruptcy involves meeting several requirements. Because you're only entitled to a discharge every few years, if you've filed before, you'll want to check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Learn more about multiple bankruptcy filings.

You'll also need to meet specific chapter requirements. Here are the qualification basics for Chapters 7 and 13.

Chapter 7 Bankruptcy Qualifications

You'll qualify for Chapter 7 bankruptcy if your family's gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee's website (select "Means Testing Information").

Want an easy way to do this online? Use the Quick Median Income Test. If you make too much, you still might qualify after taking the second part of the "means test." If, after subtracting expenses, you don't have enough remaining to pay into a Chapter 13 plan, you'll qualify for Chapter 7.

Chapter 13 Bankruptcy Qualifications

Qualifying for Chapter 13 can be expensive because the extra benefits come at a hefty price, and many people can't afford the monthly payment. To qualify, you'll pay the larger of:

  • your priority nondischargeable debt
  • the value of nonexempt property, or
  • your disposable income.

Find out more about calculating a Chapter 13 bankruptcy payment.

How Do I Keep Property in Virginia Using Bankruptcy Exemptions?

You won't lose everything in bankruptcy. You'll use bankruptcy exemption laws to protect your property. We list the significant exemptions below, but first, understanding the following will help you maximize what you'll keep in your case.

  • Exempt and nonexempt property. You can keep property protected by an exemption or "exempt" property. When a bankruptcy exemption doesn't cover the property, you'll either lose it in Chapter 7 or have to pay for it in the Chapter 13 repayment plan.
  • Choosing state or federal exemptions. Because the federal exemptions aren't available in this state, you must use the state exemptions. But you can also use the federal nonbankruptcy exemptions.
  • Doubling exemptions. In many instances, spouses filing together can double the exemption amount if both own the property.
  • Retirement accounts all filers can protect. Federal law allows all filers to keep tax-exempt retirement accounts, including 401(K)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, defined benefit plans, and traditional and Roth IRAs to $1,512,350 per person (for cases filed between April 1, 2022, and March 31, 2025). (11 U.S.C. 522(b)(3)(C); (n).) Learn more about retirement accounts in bankruptcy.

What Are the Bankruptcy Exemptions in Virginia?

Virginia bankruptcy filers can protect home equity, personal possessions, retirement accounts, and more. Below is a list of the bankruptcy exemptions filers use regularly when filing for bankruptcy in Virginia.

Virginia Homestead Exemption

A homestead exemption helps a filer keep a home after bankruptcy. Virginia's homestead exemption protects up to $25,000 $5,000 of home equity or property covered by the homestead exemption, plus $500 for each dependent. Debtors aged 65 and older and disabled veterans (with a minimum of 40% disability) can exempt up to $10,000. (Va. Code Ann. §§ 34-4, 34-18, 64.2-311)

Virginia Motor Vehicle Exemption

Virginia's $6,000 motor vehicle exemption protects equity in your car, truck, or motorcycle, helping you retain transportation after bankruptcy. (Va. Code Ann. § 34-26)

Other Virginia Exemptions

  • Cemeteries and burial funds. 100% of a lot in a burial ground and any preneed funeral contract not to exceed $5,000. (Va Code Ann. § § 34-26, 38.2-4021, 54.1-2823)

  • Claims for personal injury and wrongful death actions. Claims and proceeds derived from court awards or settlements. (Va. Code Ann. § 34-28.1)

  • Crime victims' compensation. (Va. Code Ann. § 19.2-386.12)

  • Fraternal Benefit Society benefits. (Va. Code Ann. § 38.2-4118)

  • Health savings accounts. (Va. Code Ann. § 38.2-5604)

  • Insurance benefits. Accident and sickness benefits; funds deposited in continuing care provider accounts; proceeds under an industrial sick benefit insurance policy; and benefits provided by cooperative nonprofit life benefit companies. (Va. Code Ann. § § 38.2-3122, 38.2-3123, 38.2-3339, 38.2-3406, 38.2-3549, 38.2-3811, 38.2.4-904.1, 51-111.67:8)

  • Military equipment. (Va. Code Ann. § 44-96)

  • Motor vehicles. Up to $6,000 in motor vehicle equity.

  • Miscellaneous. Decedents' family allowance of up to $24,000 for surviving spouses and minor children. (Va. Code Ann. § 64.2-309)

  • Pension and retirement benefits. Certain public employee retirement benefits are 100% exempt; tax-exempt retirement accounts are exempt per federal rules. For current amounts, see Your Retirement Plan in Bankruptcy.

  • Personal property. Up to $5,000 in household furnishings; $5,000 for family portraits and heirlooms; $3,000 for firearms; $1,000 in wearing apparel; all pets such as cats, dogs, birds, squirrels, rabbits, and other pets not kept or raised for sale or profit; medically prescribed health aids; prepaid tuition contracts; the family bible; wedding and engagement rings. A surviving spouse can claim an exemption for the personal property of the deceased spouse up to $20,000. If there is no surviving spouse, the children may claim this exemption (Va. Code Ann. § § 23-38.81, 34-4, 34-18, 34-26, 34-27, 64.2-310)

  • Public benefits. Earned income tax credit and child tax credit (Va. Code Ann. § 34-26(9)); public assistance aid to the blind, aged, disabled, and general relief (Va. Code Ann. § 63.2-506).

  • Spousal and child support. (Va. Code Ann. §34-26(10))

  • Trade implements. Up to $10,000 for items needed in a trade or profession. (Va. Code Ann. § § 34-26, 34-27) Agricultural workers can exempt a pair of horses or mules with gear, one wagon or cart, one tractor to $3,000, two plows, one drag, harvest cradle, pitchfork, rake, and fertilizer to $1,000. (Va. Code Ann. § 34-27)

  • Unemployment compensation. (Va. Code Ann. § 60.2-600)

  • Wages. 75% of weekly disposable earnings, or 40 times the federal minimum hourly wage per week (whichever is greater); special rules apply for support obligations; parents making $1,750 or less are eligible for additional exemptions. (Va. Code Ann. § 34-29, 34-32, 34-33, 34-165, 55-165)

  • Workers' compensation. (Va. Code Ann. § 65.1-82)

Be aware that more exemptions exist and that amounts adjust occasionally. You can verify exemption statutes on the Virginia General Assembly website. Speak with a local bankruptcy lawyer for current exemption amounts. also regularly updates state bankruptcy exemptions.

When Can I Use Virginia Bankruptcy Exemptions?

You can file for bankruptcy in Virginia after living there for over 180 days. However, you must live in Virginia for at least 730 days before filing. Otherwise, you'd use the previous state's exemptions.

If you lived in multiple states during the two years before filing for bankruptcy, you'd use the exemptions of the state you lived in for most of the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)

Also, to claim the total value of the homestead exemption, you must have purchased and owned the property for at least 1,215 days before the bankruptcy filing. If you can't meet this requirement, your homestead exemption is limited by federal law to $189,050 for cases filed between April 1, 2022, and March 31, 2025.

Learn more about filing for bankruptcy after moving to a new state.

How Do I Prevent Bankruptcy Exemption Problems in Virginia?

Exempt your property carefully. The bankruptcy trustee, the court-appointed official assigned to manage your case, will review the exemptions. A trustee who disagrees with your exemptions will likely try to resolve the issue informally. If unsuccessful, the trustee will file an objection with the bankruptcy court, and the judge will decide whether you can keep the property.

Example. Mason owns a rare, classic car worth $15,000, but the state vehicle exemption doesn't cover it entirely. Believing that the car qualifies as art, at least in his mind, Mason exempts it using his state's unlimited artwork exemption. The trustee disagrees with Mason's characterization and files an objection with the court. The judge will likely decide the vehicle doesn't qualify as art.

Purposefully making inaccurate statements could be considered fraudulent. Bankruptcy fraud is punishable by up to $250,000, 20 years in prison, or both.

Should I Hire a Bankruptcy Lawyer in Virginia?

Most people find it worthwhile to get counsel. A bankruptcy attorney will help you:

  • qualify for the chapter of your choice
  • determine when it's time to file
  • help you keep the property you want
  • make sure you don't run afoul of fraud or other issues, and
  • explain when you can stop paying the bills you'll erase in your case.

You can expect creditors to call until you file. It's usually best to ignore them because telling creditors about your bankruptcy can encourage them to take more drastic collection steps before losing the right to collect altogether. However, if you hire counsel and refer creditors to your lawyer, they'll have to stop calling you.

How Do I File for Bankruptcy in Virginia Without a Lawyer?

You'll complete the steps listed below in "What Steps Are Involved in a Virginia Bankruptcy?" But not everyone should file their own bankruptcy case.

The best candidate is a Chapter 7 debtor who meets qualification requirements, can eliminate all debts, and can protect all property with bankruptcy exemptions. People filing for Chapter 13 or Chapter 7 filers with complicated cases should seek representation.

Are you curious whether your case is simple enough to file yourself? Our quiz will help you identify potential complications while educating you about bankruptcy. You'll find it here: Do I Need a Lawyer to File for Bankruptcy?

How Much Does It Cost to File for Bankruptcy in Virginia?

All filers pay a $338 filing fee in Chapter 7 unless the court grants a fee waiver and a $313 filing fee in Chapter 13 (amounts current as of August 2023). You'll also pay approximately $50 to $75 for credit counseling and debt management courses.

If you hire a bankruptcy lawyer to represent you, you can expect to pay from $1,500 to $2,500 upfront for most Chapter 7 cases, although the price will depend on the going rates in your area and case complexity. Chapter 13 legal fees run about $1,000 to $1,500 more, but you can pay them in installments through the Chapter 13 payment plan.

Learn about your options if you can't afford to hire a bankruptcy attorney.

What Steps Are Involved in a Virginia Bankruptcy?

We all know that seeing the forest helps us recognize the trees. Similarly, understanding the significant steps you'll take during your bankruptcy journey will help you understand the bankruptcy process. Think of this checklist as a roadmap to track your progress.

Bankruptcy Steps Checklist

What Do I Need to File for Bankruptcy in Virginia?

Once you decide to file, the fun begins! Well, not really. You'll start by gathering your financial information, which can take time. But our bankruptcy document checklist should help you organize what you or your attorney will need.

Bankruptcy Document Checklist

Where Do I Find the Virginia Bankruptcy Court Website and Locations?

Your case starts when you file your paperwork with the local bankruptcy court. The Virginia Bankruptcy Court maintains two offices. Before you file, you should call one of the court's offices to determine which will have jurisdiction over your case.

On the websites of the Western Virginia Bankruptcy Court and the Eastern Virginia Bankruptcy Court, you'll find instructions for filing your paperwork, local rules, and more.

What Happens After Filing for Bankruptcy in Virginia?

Your creditors will stop bothering you soon after you file. It takes a few days because the court mails your creditors notice of the "automatic stay" order that prevents most creditors from continuing to ask you to pay them. Here's what will happen next:

  • You'll turn over financial documents proving the statements in your bankruptcy paperwork.
  • You'll attend the 341 meeting of creditors—the one appearance all filers must attend.
  • You'll complete a debtor education course and file the completion certificate.

These things must happen before you get a Chapter 7 bankruptcy discharge. Chapter 13 filers will also attend a repayment plan confirmation hearing and complete the three- to five-year payment plan.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we want to ensure you find what you need. Below, you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!

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Helpful Bankruptcy Sites

Department of Justice U.S. Trustee Program

United States Courts Bankruptcy Forms

We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.

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