Consumer Bankruptcy 7 or 13?

What is the name of your state? VA

I have a few questions. I'm on the verge of declaring bankruptcy as the quality of my life has been severly impacted due to the events of 9/11 and the tremendous downturn in our economy. Business has been almost nonexistent.(Technology Sales Rep.) I need to know what my rights are for my state (VA) since my jurisdiction does'nt acknowledge Federal guidelines.

We have a house and a car and unsecured debt (credits cards to the max used to survive) and things have gotten out of control. If and when I file how long will this stay on our credit reports and will it ruin us?

Which option will allow us to keep our car and home? Chapter 7 or 13?

In addition, would we be required to terminate all of our major credit card relationships?

Please advise.

Thanks for the life line and the listening ear.

Sincerely,

An honest hard working citizen!!!

[Ladynred]

Both 7 and 13 would allow you to keep your car and your home. If you are current on the two and you want to wipe out everything else, then Ch 7 is probably better. Ch 13 will force you to pay back at the secured creditors over a 3-5 year period.. ALL disposable income for that period goes to the trustee to pay back your debts. In Ch 7, as long as you're current, you can reaffirm the house and car, but equity in them becomes an issue.

Here's the homestead exemption for VA:
"$5000 plus $500 per dependent; may also claim rents & profits; sale proceeds exempt to $5000 (husband and wife may double), Cheeseman v. Nachman, 656 F. 2d 60 (4th Cir. 1981); unused portion of homestead may be applied to any personal property

May include mobile home

Must file homestead declaration before filing for bankruptcy

Property held as tenancy by the entirety may be exempt against debts owed by only one spouse"

Ch 13 stays on your credit for 7 years, Ch 7 stays for 10.
It won't ruin you, but credit will be tough for at least 3-4 years following a discharge of Ch 7.

As for the credit cards.. you'll lose them all. You can request to keep one or two, but its likely that even if you're allowed to keep them, the accounts will be closed anyway. Besides, if they're all maxed out, why would you want to burden your fresh start with a maxed out card ???

Here's a link to the VA Bankruptcy exemptions:
[url]http://www.thebankruptcysite.com/exemptions/virginia.htm[/url]