Bankruptcy in West Virginia
The beauty "Wild and Wonderful" West Virginia catches the heart of all those who step foot within the state's 24,231 square miles. Even New Mexico native, John Denver, was captured by its beauty.
Almost heaven, West Virginia,
Blue Ridge Mountain, Shenandoah River,
Life is old there, older than the trees,
Younger than the mountains, blowing like a breeze
Take Me Home, Country Roads
Denver was born in Roswell, New Mexico, home to mystery, secrets, military, and aliens. Yet, he chose to write about the beauty of West Virginia. One need only travel a few miles of highways 79 or 77 to understand why. Or better yet, take Denver's advice and travel West Virginia's the country roads.
But, we digress; this article is being written to guide the people of West Virginia, who, like many others, may be struggling financially. If bankruptcy is a consideration, then this article is for you and you are not alone. In 2011, 4,664 West Virginians filed bankruptcy.
In this article, we'll show you how West Virginia bankruptcy law differs from the laws other states; discuss whether you should file Chapter 7 or Chapter 13 bankruptcy; show you how to find and select a bankruptcy lawyer; and help you to prepare to work with a bankruptcy attorney.
How West Virginia Bankruptcy Law Differs from the Laws of Other States
Some states allow their residents to choose between the federal and state bankruptcy exemptions; however, West Virginia is not one of them.
Here are some of the West Virginia exemptions. This is how much property you can protect. (Double these numbers if you are married and will be filing bankruptcy jointly with your spouse.)
- A house with equity of up to $25,000.
- A motor vehicle with equity of up to $2,400.
- Household and personal items up to $8,000.
There are additional exemptions as well and your bankruptcy attorney will know how to best apply the exemptions to your property. Most folks don't lose any property during the bankruptcy process.
Your Choices in Filing Bankruptcy in West Virginia: Chapter 7 or Chapter 13
When you file for bankruptcy protection, you must tell the court whether you're filing under Chapter 7 or Chapter 13 of U.S. bankruptcy laws. Both provide an end to creditor harassment and a fresh start.
- Chapter 7 takes about 6 months to complete and many unsecured debts are discharged.
- Chapter 13 takes about 3 to 5 years because some debts must be repaid.
- Most folks prefer to file under Chapter 7 because it's faster and credit card, personal loan, and medical bills are automatically wiped out. You never have to pay them back.
- To qualify for Chapter 7, you must pass the "means test", meaning that your income must be under the state median income. But don't get discouraged if you don't immediately qualify. There is more than one path to filing Chapter 7. Get good legal advice before you disqualify yourself.
- The median income for a single West Virginia resident with no dependents is $42,178. The median income for a family of 4 is $63,638.
- Chapter 13 is likely appropriate if Chapter 7 is not because of the "means test" or because you have high debts that can't be discharged (i.e. student loans, most taxes, child support, and alimony).
How to Find and Select a Bankruptcy Attorney
You likely have loved ones and neighbors who have filed bankruptcy. If you feel comfortable, ask them for a referral to their attorney.
Otherwise, you can get referrals from the Internet (enter "Find a West Virginia Bankruptcy Attorney" into your search engine), a professional advisor, or the local bar association.
There are 3 prongs to choosing an attorney:
- First, he or she must focus his practice on bankruptcy law.
- Second, the attorney must be licensed in West Virginia.
- Third, you must feel comfortable working the attorney and be able to trust and take advice.
How to Prepare to Work with a Bankruptcy Attorney
This part of the article may have you singing the blues, instead of John Denver songs. The lyric is "paperwork", but it will be worth every ounce of effort and every minute of your time.
Your bankruptcy lawyer needs to have a list of and documentation for your credit card bills, medical bills, all debts, all assets, all expenses, and all debt payments made in the last year. Collect tax returns, contracts, and creditor information as well.
Preparing to work with a bankruptcy attorney may take you a day or two, but if you have $50,000 of debt wiped out during bankruptcy, you're getting "paid" $25,000 per day. Think about that and how good a fresh start will feel.