When an individual files for Chapter 7 bankruptcy, an interim trustee is appointed in each case. The interim trustee is charged with liquidating any nonexempt assets that are not burdensome or of inconsequential value. The trustee’s duty is owed to the creditors of the Chapter 7 bankruptcy estate. Fortunately, the Virginia Code protects a number of assets from being liquidated as part of the Chapter 7 bankruptcy process.
The mechanism to protect property from liquidation is to record a homestead deed. For personal property, the homestead deed must be recorded in the jurisdiction in which the personal property is located. For real property, the homestead deed must be recorded in the jurisdiction in which the real property is located. In most cases the filing of only one homestead deed is required, but where personal property and real property are located in different jurisdictions, the filing of two homestead deeds may be required. Additionally, only Virginia residents are entitled to use Virginia exemptions, all others must use the Federal exemptions.
Virginia Code Section 34-26 exempts the following property from liquidation:
- The family Bible;
- Wedding and engagement rings;
- Family portraits and family heirlooms not to exceed $5000 in value;
- Burial plots or futile contract not to exceed $5000 in value;
- Clothing valued in an amount not to exceed $1000;
- Household furnishings valued in an amount not to exceed $5000;
- One firearm valued in an amount not to exceed $3000;
- All animals kept as pets (better defined as animals not kept or raised for sale or profit);
- Tools of the trade, including motor vehicles, vessels, and aircraft, which are necessary for use in the course of the individual’s occupation or trade not to exceed $10,000 in value;
- A motor vehicle, not held as a tool of the trade, not to exceed $6000 in value.
Virginia Code Section 34-4 provides additional exemptions that may be used for real or personal property. 34-4 allows an individual to exempt real or personal property in an amount not to exceed $5000 in value or, if the individual is 65 years of age or older, not to exceed $10,000 in value. Additionally, this exemption is increased by $500 for each dependent.
There are a number of other exemptions available under the Virginia Code or allowed by various Federal provisions. Contact Ronald Page, PLC directly in order to schedule a consultation regarding protecting your assets. Ronald Page, PLC services the Virginia Capitol area including Richmond, Henrico County, Chesterfield County, Hopewell, Petersburg, Hanover County, Caroline County, Powhatan County, Prince George County, Goochland County, New Kent County, and Amelia County.