{"id":286880,"date":"2021-04-21T15:40:58","date_gmt":"2021-04-21T20:40:58","guid":{"rendered":"https:\/\/ability-fl-prod.internetbrands.com\/ability-law\/bankruptcy\/bankruptcy-laws-by-state\/virginia-bankruptcy-exemptions-and-law.html"},"modified":"2026-10-13T10:55:47","modified_gmt":"2026-10-13T15:55:47","slug":"virginia-bankruptcy-exemptions-and-law","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/state\/virginia-law\/virginia-bankruptcy-exemptions-and-law.html","title":{"rendered":"Virginia Bankruptcy Exemptions and Law"},"content":{"rendered":"\n
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Virginia Bankruptcy Exemptions and Law<\/h1>\n\n
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\n By Christie Nicholson, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Key Takeaways<\/h2>\n

Virginia <\/span>bankruptcy<\/span> laws<\/span> allows residents to seek debt relief and protect qualifying property using general property, motor vehicle, and Virginia homestead exemptions<\/span>.<\/p>\n\n <\/div>\n <\/div>\n<\/div>\n\n

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When debts become overwhelming, you can file for bankruptcy. Bankruptcy proceedings are conducted in federal court under the U.S. Bankruptcy Code<\/span><\/a>, which also allows states to set their own rules on what property residents can protect from creditors so they don’t lose all their assets in bankruptcy. Virginia has enacted its own bankruptcy exemptions<\/span>. To understand the exemptions, it\u2019s first important to understand the basics of bankruptcy.<\/p>\n

Chapter 7 vs. Chapter 13<\/h2>\n

Property exemptions don’t apply to all personal bankruptcies, only those filed under Chapter 7. The other type of personal bankruptcy is Chapter 13 bankruptcy<\/span>, where you can often keep most of your assets.<\/p>\n

Chapter 7 bankruptcies<\/span> are also known as \u201cliquidation<\/span>” bankruptcies because you must turn over all of the property not protected by an exemption to a bankruptcy trustee<\/span>. The bankruptcy trustee<\/span> then sells the property and uses the proceeds to repay your creditors.<\/p>\n

In return for giving up your non-exempt property<\/span>, you\u2019ll exit Chapter 7 bankruptcy<\/span> free from nearly all of your debts. Not everyone who files for bankruptcy qualifies for Chapter 7<\/a>. You must show that your income is low enough to qualify.<\/p>\n

Chapter 13 bankruptcy<\/span> lets people with a steady income reorganize most of their debt and pay it off over three to five years under a court-approved plan. Debt elimination is possible, but debt payment is the primary function of a Chapter 13 filing. Chapter 13<\/a> is popular with homeowners because it often lets them keep their homes.<\/p>\n

The Automatic Stay<\/span> Protects You From Creditors<\/h2>\n

Whether you file under Chapter 7 or Chapter 13, the court will issue an automatic stay<\/span><\/a> when you file. The automatic stay<\/span> is a powerful tool that forces creditors to stop trying to collect their debts while you resolve your financial issues through bankruptcy.<\/p>\n

The automatic stay<\/span> will stop almost all collection activity against you, including foreclosures<\/span> and lawsuits. If a creditor contacts you to collect payment while the stay is in place, the court can order it to pay damages, including attorneys\u2019 fees<\/span>.<\/p>\n

Secured vs. Unsecured Debt<\/span><\/h2>\n

Not all debt is treated the same during bankruptcy. When you declare bankruptcy, your debt will be categorized as either secured<\/a> or unsecured<\/a>. How your debt is classified will often determine how much you can eliminate through bankruptcy. Let\u2019s explain each type.<\/p>\n

Unsecured Debt<\/span><\/h3>\n

Creditors seeking payment for your unsecured debt<\/span> can\u2019t seize your property to collect. Credit card<\/span> debt, court judgments, and medical debt are among the most common types of unsecured debt<\/span>.<\/p>\n

Unsecured creditors have no collateral for their debts, making them the most likely to be eliminated in bankruptcy. Some priority unsecured debts<\/span>, like child and spousal support, can\u2019t be discharged.<\/p>\n

Secured Debt<\/span><\/h3>\n

When debt is secured, a creditor can repossess your property if you fail to pay. Most secured debts<\/span> come from a loan transaction in which you signed a contract giving the lender the right to place a lien on the property you put up as collateral if you don\u2019t repay the loan. Home mortgages and car loans<\/span> are the most common types of secured debt<\/span>.<\/p>\n

Filing for bankruptcy may force secured creditors to pause collection activities for a time, but most\u00a0secured debt<\/span>\u00a0can\u2019t be discharged. You\u2019ll either need to give up the property or work out a payment plan<\/span> with the creditor.<\/p>\n

Secured and Unsecured Debt<\/span> in Bankruptcy<\/h3>\n

When you file for bankruptcy under Chapter 7, you can often discharge most of your unsecured debt<\/span>. Secured debt<\/span> can rarely be eliminated, leaving you with three options:<\/p>\n