Bankruptcy is a legal process that helps people in West Virginia (WV) and elsewhere get out of debt and start fresh financially. It also stops legal actions against you and stops creditors from contacting you about your debt. While taking this step may seem like a solution to all of your problems, there are a few things you should know before filing for bankruptcy in WV.
The Details: Filing for Bankruptcy in WV
Filing for bankruptcy in WV is not as simple as filling out paperwork and getting all of your debts forgiven. It can be a long and complicated process, and certain debts will not be forgiven in the bankruptcy process (like child support and tax liens).
The bankruptcy code is complicated. A bankruptcy attorney can help you navigate the process and ensure you come out ahead and in the best financial position possible on the other side.
Types of Bankruptcy in WV
The different types of bankruptcy are governed by Title 11 of the United States Code. You may have heard of Chapter 7 or Chapter 13 bankruptcy. These are the most common types of bankruptcy filed by individuals, and both come along with specific requirements and processes.
Chapter 7 bankruptcy liquidates your assets and uses the proceeds to pay your creditors what you owe them. Some assets are exempt from liquidation, including some of the equity in your cars, as well as pensions, and Social Security benefits. West Virginia law also provides certain exemptions of property in bankruptcy proceedings. Chapter 7 is usually a better choice for people with little to no assets.
Not everyone is eligible for Chapter 7 bankruptcy. You must pass a “means test” to prove that you meet the income requirements. If your income is not low enough, you’ll have to seek another alternative, like Chapter 13.
Chapter 13 bankruptcy is meant for people who have regular income and can pay their debts through a repayment plan. Instead of liquidating your assets to pay your debts immediately, you get to keep your assets by agreeing to pay your debts. The timeframe to pay the debts is typically from three to five years, and, generally, you are only paying a portion of your debts over this period. At the end of the agreement, any remaining debt is discharged.
What You Should Consider Before Filing for Bankruptcy in WV
If you are considering filing bankruptcy in WV, you should not take the decision lightly. Bankruptcy is meant to be a tool to help people in very difficult financial situations, and the effects of bankruptcy in WV can have a significant impact on your future.
The most significant effects of bankruptcy are the impact on your credit and, in the case of Chapter 7 bankruptcy, the loss of assets. If you file Chapter 7 and have equity in your home or cars, those possessions will likely be liquidated, and you could walk away with little to no assets.
In both types of bankruptcy, your credit will take a big hit, dropping by as much as 200 points. This can impact your ability to obtain credit, a job, insurance, or even rent an apartment. It can take a decade or more to get your credit back to a high score, so take time to consider what your future plans are before filing bankruptcy in WV.
Considering Filing For Bankruptcy in WV? Attorney Jason Harwood Can Help
Filing bankruptcy in WV is not easy. Even if you don’t have a regular income and have few assets, producing and filing the required paperwork alone can be overwhelming. Your best chance of walking away from the process with a good outcome is by hiring a skilled bankruptcy attorney.
Southern WV bankruptcy attorney Jason Harwood at Harwood Legal, PLLC can help you when you are in a tough financial situation. He will answer all of your WV bankruptcy questions, help you determine if it is the right move for you, and guide you through the process from start to finish. To get in touch with Jason about filing for bankruptcy in WV, call 304-752-5015, or complete this online contact form.