The poor economic conditions in the U.S. over the past several years have put a great deal of financial strain on many individuals and families causing some to seriously consider bankruptcy.
The discharge of debt available through a Chapter 7 bankruptcy may provide the means for a fresh start for individuals suffering with otherwise unmanageable financial burdens, but because a Chapter 7 bankruptcy may result in the loss of assets, it is very important for a debtor to take the necessary steps to adequately protect their assets. While there are numerous exemptions in Virginia that allow individual filers to protect and retain specific assets up to a certain value, for those assets that the Virginia Code does not specifically address there is the Homestead Deed exemption. Under Virginia Code Section 34-4, otherwise known as the Homestead Deed exemption, an individual can protect up to $5,000.00 worth of personal or real property, while senior citizens aged 65 or older are allowed to protect up to $10,000.00. Furthermore, individuals with dependants can protect an additional $500 worth of assets per dependant on their 34-4 Homestead Deed. Be aware also that unlike other exemptions the $5,000.00 homestead exemption is considered a lifetime limit, so individuals who have previously filed may not have the entire $5000.00 exemption available. The exemption available through 34-4 is not automatic and requires the filing of a Homestead Deed in the land records of the county or city in which the debtor resides. Unprotected assets may be forfeited in a Chapter 7 bankruptcy and protecting assets can be a bit complicated so consulting and retaining an attorney before filing a bankruptcy is highly recommended. Discharging debt is a debtor’s main goal in a Chapter 7 bankruptcy, losing your assets is not.