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Apr 2012

Virginia Bankruptcy Exemptions

Posted by / in Virginia Bankruptcy / 40 comments

Virginia Bankruptcy Exemptions

“What will they take?”  Your Virginia bankruptcy exemptions answer that question.

When you file a Chapter 7 bankruptcy, the Chapter 7 trustee can take and sell your non-exempt assets.  (The proceeds are used to pay your creditors.)

Most people don’t have “non-exempt” assets, so the trustee doesn’t take and sell anything.  But that happy result often requires careful planning and detailed knowledge of Virginia bankruptcy exemptions law.

Robert Weed explains Virginia bankruptcy exemptions

Bankruptcy law is established by the Federal government. But the law gives each state control of exemptions for your house and car, clothing and furniture.

Bankruptcy is set up by the Federal government, but the law gives each state control of many exemptions.  Here’s a look at the Virginia bankruptcy exemptions–updated with the new law that took effect July 1, 2016.

Will they take my house?

During the real estate crisis, most people in Northern Virginia lost any equity they had in their real estate.  In bankruptcy, bad is often good.  Having no equity is often good, because Virginia is right at the bottom of the real estate equity you can keep.

In June, 2015, Alabama raised their homestead exemption from $5,000 to $15,000.  That leaves Virginia LAST of the fifty states.

 Your “homestead” Virginia bankruptcy exemption is $5000.00.  That’s found in Code of Virginia 34-4.  That compares unfavorably to 100 acres of Texas, Or 160 acres of Florida.  If the bankruptcy trustee can take and sell your house, give you $5000, and have money left over to pay your creditors, that’s what he is supposed to do. (That “homestead” exemption does go to $10,000 for disabled veterans and seniors over age 65.)

Now Virginia does provide much better protection for married couples.  Under “tenancy by entirety,” real estate that belongs to a married couple cannot be taken for the debts of only one.  So a married couple can protect unlimited real estate equity, as long as they are not joint on credit cards or other debts.

What about my car?  Or my truck?  My tools?

Most places, you can’t get to work without a car.  Many people owe more on their cars than it’s worth.  But for those whose car is paid for, or almost paid for, Virginia bankruptcy exemption law allows you to protect $6,000 equity in your car.  (You can also split that $6000 between two or more cars.  That’s important for married couples who have both cars in one spouse’s name.)

Some people can also claim “tool of the trade” protection for a vehicle.  If you are cab driver, your car is a tool of your trade.  If you are a painter, then your truck, along with your ladders and brushes, are your tools.  There’s a $10,000 Virginia bankruptcy exemption for tools.

The Virginia bankruptcy exemptions for cars and tools are pretty good, compared to many other states.

Other stuff

You are allowed to exempt most of your stuff.   Your pets, your wedding and engagements rings, and your family bible.

Clothing up to $1000.  Household furnishings, $5000.  I’ve never seen a bankruptcy trustee be interested in people’s normal clothing–you’d have to sell a lot of it at yard sale prices to get to $1000.  Somebody with a lot of electronics might have more than $5000 in household furnishings.  In Northern Virginia, where I am, the bankruptcy trustees don’t have time to mess with that.  In more rural parts of the state, I’ve sometimes heard of it.

Firearms, $3000.

What about money in the bank, retirements, places where there’s money?

Your retirement funds–401(k), 403(b), 457, IRA’s–are all exempt under Federal bankruptcy law and also the Code of Virginia.  Virginia also exempts the retirements of state and local government employees.

The thrift savings plans of federal employees are protected by Federal law.

Cash value life insurance is protected, beginning July 1, 2016.

Tax refunds?

People with a lot of children and not a lot of money each year receive a “child tax credit” and “earned income credit” as part of their tax refund.  Before July 2015, the Chapter 7 bankruptcy trustee could grab that.  Now, it’s safe.


In the fall of 2014, the bankruptcy judge in Norfolk said that a bankruptcy trustee could wait around and intercept a divorced mother’s alimony payments, each month.  The Virginia General Assembly protected unpaid alimony and child support, starting July 2015.   (Special thanks to Del Scott Surovell, D-Fairfax, and Del Dave Albo, R-Fairfax, for getting this done.)

What about money in the bank?

The protection for your money in the bank depends on where it came from.

Your “wages’–including commission, bonus, almost anything–is three quarters exempt under Virginia law.  That protection follows the money when it hits your bank account–as long as you can trace it.  Having direct deposit really helps with that tracing.

Your Social Security is exempt, and keeps that exemption when it hits your bank.

Disability payments are protected under Virginia law exempting sickness insurance.

Money you receive as a result of a personal injury, typically a car accident, is exempt in Virginia.

If you have cash or investments that don’t fall into any of these categories, you can use that Virginia $5000 “homestead” if you don’t need it to cover your real estate equity.

College Savings plans

Money that’s been in a 529 college savings plan for your child or grandchild (not yourself) is exempt if it’s been there for more than two years.  If it’s been there for more than one but less than two years, $5000 is exempt.

However, Virginia gives better protection for money in the Virginia 529 Plan–the specific 529 set up by the Commonwealth of Virginia.  There’s no waiting period for the bankruptcy exemption to take effect under the law for the Virginia 529 plan.

PS:  My mom “put my name on” her bank account

Under Virginia law, money in the bank belongs to the person who put it in.  (Except husband and wife are 50-50.)  So if mom put the money in, then it’s still protected, even if mom put your name on the account.  (Now if mom is giving you the money, that would be a different story.)


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Robert Weed has helped fifteen thousand people file bankruptcy in Northern Virginia. Robert Weed is a frequent panelist and speaker at the meetings of the National Association of Consumer Bankruptcy Attorneys. He is one of Northern Virginia’s most experienced personal bankruptcy lawyers. As an expert on changing consumer bankruptcy laws, Robert Weed has been interviewed on local and national TV and quoted in newspapers across the country.

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    Exemptions in Bankruptcy « Charleston Bankruptcy Lawyer Blog | South Carolina Bankruptcy Law

    June 22, 2012, pm30 9:27 PM

    […] where legislators have done a poor job at protecting their constituents from creditors.  In Virginia, residents can only protect $5,000 in equity in their homes, but can protect $6,000 in a equity in a motor vehicle.  (Who thinks this stuff up anyway? Maybe […]

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    Mike Harris

    December 3, 2012, pm31 6:58 PM

    Our home has been forclosed on and we are living in our Rv. I want to move
    to an area that has more opportunity. We has one car valued at 2500.00.
    The Rv is valued around 20,000. In bankruptcy, can they take the RV that
    we are living in?

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      Robert Weed

      December 4, 2012, am31 6:19 AM


      Well, maybe. You say “we.” If the RV is in joint names–and if you are moving INTO Virginia from MOST other states, you’d have $22,000 in exemptions to cover the RV. That is if you didn’t have much cash or anything else, which is sounds like you don’t. (You’d also be ok on the car.)

      Now if you are moving from one place in Virginia to another, and the RV is joint, you have $22,000 to cover the RV and the car, which is close enough.

      I(f the RV is only in one name, you’re going to have a problem.

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    brian whiting

    June 21, 2013, am30 1:33 AM

    If you bought property overseas but you owe more than it is worth. What do you do?

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      Robert Weed

      June 21, 2013, am30 1:39 AM


      If you owe more than its worth, there’s no problem. Show what it’s worth and show what you owe on it.

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    August 15, 2013, pm31 2:25 PM

    I am single homeowner, who has been out of work since APril this year. I was three months away from paying my ch 13, had no problems until I was laid off. Now, I am and have been searching for full-time employment since being laid off, have a temporary job 18 hour/week @7.25, provided though the AARP foundation ( senior initiative) Only receive 184.00 pension, no unemployment.. I had not been able to pay trustee for three months, and have been working with the clerk who suggested I send in something which I did. I received a call to day that they may have to dismiss the case. I have explained my situation to the trustee and to the clerk, who suggested I leave a message for the trustee, with details, which I have. Part of the details is that my attorney will not go the hearing ( if there is one) until I give her money, which I donot have. I been told that dismissal is a good thing, by the clerk, but the atty office is insisting that I go into a chp7, I cannot lose my home it’s all I have I am going through loan mod as suggested by the atty three months ago, my car, i have to get back and forth to work and interviews. And I am afraid to talk to the atty. I am so confused.

    Thank you for your assistance.

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      Robert Weed

      August 15, 2013, pm31 4:48 PM


      Sorry that your lawyer is not answering your questions.

      Whether you want to convert to Chapter 7 or dismiss depends on a complete picture of your situation, which I don’t have. Your lawyer might be right that you want to convert. Obviously the clerk doesn’t know, but dismissal sometimes is better. It depends.

      Don’t know where you are. But the judges here would GO CRAZY if there was a lawyer in Chapter 13 who refused to go to a dismissal hearing unless you paid them more. That kind of BS is NOT allowed in this court. Don’t know what the judges think where you are.

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    August 24, 2013, am31 4:22 AM

    My husband has been fighting cancer for over 11 years. His situation has been very serious many times. He is the soul bread winner for our family. In between relapses he has worked part time. That is all he can work sue to the disability he receives. He is working only three days a month. I am looking for employment but not working right now. We have two college aged kids; a large house payment, two paid for old cars and one newer car. our house is relatively nice but needs things like a new roof and a few cosmetics. We do not have the funds to do anything to the house. So my questions are can we declare bankruptcy and in few years sell the house and keep all the money we make off the sell or can we only keep 10,000 if we made 50,000 from the sell? Thank you so much.

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      Robert Weed

      August 25, 2013, pm31 12:12 PM


      Let me back up before I answer your question. If you file bankruptcy, can you keep your house Now?

      There are two answers to that question. You can keep it from your mortgage company, if you keep making the payments. And you can keep it from the bankruptcy trustee, if it’s exempt. Exempt if there’s less than $10,000 in equity today. Or exempt if it belongs to a married couple and there are no joint debts, other than the house.

      Is that works, then, yes, you can “sell the house and keep all the money you make.” The amount of money you make when you sell the house in a few years could be more than today–because you pay the mortgage down, and because the value (we hope) goes up. Yes, all that belongs to you.

      Julie, for sure you need to go talk to a good lawyer. Your husband has been fighting cancer for 11 years, he’s on disability, you can’t find work, you need to protect your house….it’s time to talk to a bankruptcy lawyer.

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    October 18, 2013, pm31 11:18 PM

    I filed Ch. 7 in 2011 and it was discharged in November 2011. Is it possible to file a Ch. 13 because of a civil lawsuit currently pending against me? There is no way that I could pay this debt and my wife was non-suited in the case. I filed the Ch.7 as an individual.

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      Robert Weed

      October 19, 2013, pm31 12:04 PM


      First, what is this civil lawsuit. Was it something that happened before the 2011 bankruptcy that you didn’t know you’d get sued for. Then maybe the 2011 bankruptcy covers it.

      If it happened after, then yes you probably need a Chapter 13. Now since it’s less than four years since the Chapter 7, at the end of the Chapter 13, you will still owe the rest of the money! Then it would be more than your years, so you would have to file ANOTHER chapter 13 and that would get rid of the debt at the end. That’s a terrible solution, but it may be your best choice.

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    July 24, 2014, pm31 11:39 PM

    my two sons and my deceased husband are on the title of their home loan in Virginia.. I have been helping them keep up with payment and now have to move out of state to take care of my ill mother. I will have to quit my job and only have Social Sercurity. My sons do not make enough money to pay for the house and plan to move with me. What can they do so they wont have to suffer from this problem

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      Robert Weed

      July 25, 2014, pm31 1:20 PM


      I’d need to know a whole lot more to begin to answer that question. They should put together complete information and see a bankrutpcy lawyer to see if bankrutpcy can help.

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    August 11, 2014, am31 1:44 AM

    I recently filed chapter 7 bankruptcy in Woodbridge VA. I want to marry my fiance. Can I do that without causing any problems for him? Also I’m trying to save my house which was included in the bankruptcy. Is that possible?

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      Robert Weed

      August 11, 2014, am31 10:51 AM


      Recently filed chapter 7–like last week; or like a couple months ago? Getting married after you file Chapter 7 should NOT affect your eligibility, but to avoid unnecessary questions I’d sure wait at least until after you “meeting of creditors” hearing.

      Getting married should not cause any problems for him.

      Trying to save your house from whom? Is the Chapter 7 trustee trying to sell it because you have too much equity? Then you need to buy it back form the trustee. Is the bank foreclosing? You need to catch up the payments. Maybe with a chapter 13.

      I’m wondering what you lawyer is telling you–it seems like parts of this story are missing.

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    gary steele

    November 24, 2014, am30 5:45 AM

    are my social security disability benefits protected if i file a chapter 7 or 13.

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      Robert Weed

      November 24, 2014, am30 11:53 AM



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    February 9, 2015, pm28 3:55 PM

    My wife and I have about $25,000 in credit card debt. I’m about to begin having to repay student loans later this year (around $80,000) and not sure if I will be able to get a job anytime soon where we live in rural Virginia. I’m 28 and my wife is 25. My wife has a job with the state (32,000/yr) but we’re finding it hard to keep paying our bills…let alone when I have to being paying back the student loans. Right now we live in a house that was built by my father and I in 2012 (is in his name and we pay no rent), and my wife and I each have one vehicle (both in my name and are completely paid for; older 1998 and 1999 models). If it gets to the point where we can no longer pay the credit card and student loan bills, we may need to consider bankruptcy. Which bankruptcy would be best and what would be the effects? Would one of the two vehicles have to be sold? I assume the house my father owns wouldn’t count but we would need to sell most of our possessions? What about the student loans…would they be eliminated or reduced since I can’t find a job? Please let me know.

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      Robert Weed

      February 9, 2015, pm28 6:27 PM


      I know that seems like a simple question, but I’d spend at least on hour going over the details of my clients’s situation before I’d answer that question. It depends on too many things.

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    June 4, 2015, am30 3:07 AM


    How would I go about filing a declaration of homestead for security deposits and a future tax return? Are there any examples you can point me to along with blank forms? I was also wondering if the additional $500 per child exemption is doubled with a married couple.


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    July 10, 2015, pm31 4:58 PM

    Great Article. Thanks for the info, super helpful. Does anyone know where I can find a blank “Declaration of Homestead Form” to fill out?

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    December 18, 2015, pm31 9:10 PM

    I really like your writings! Extremely informative. I have some questions so here are the facts:
    -Va resident in nova
    -married with 2 children
    -i have ~$177,000 in IRS federal income tax only. I filed separately (I am married) so the debt is all mine. This includes all penalties and interest and all times lines make it eligible for Chapter 7 (debt is for 2008 and filed Oct 15, 2009) Until now it was “case closed- currently not collectible”. I am now receiving letters to pay up which I cannot. Without getting an irs transcript I believe my time line for statutes of limitation for collection will fall sometime close to 4 yrs from now- adding a few months tolling from an OIC that of course did not work. Federal tax lien is on since the Oct 15, 2009 file date.
    -my car is in my name and old -~$2,000-good to go for exemption. Wife’s car in her name- good to go.
    -Since married and house is under both our names but irs debt is only under me I should be with safe with Chapt 7 and not worrying about trustee going after any equity, not that there really is much. (House value $340,000 and mortgage for $290,000 with a $30,000 second heloc- heloc access closed).
    -I have about $11,000 in cc debt that I feel I can handle along with survival debts (mortgage, food, clothes, medical, etc)
    -Lately I have struggled to get mortgage in on time but never 30 days late. I am working every which way I can every day as well as my wife. I am self employed. She has a “job”.
    -Great grandmother-in-law set up 529 for kids over 2 years ago and I think last contribution was over 2 years ago.
    If I choose to file Chapter 7 Bankruptcy:
    -Can I choose to just put the taxes owed into Chapter 7 or do I have to include all debt? I am thinking all debt. I would rather just get the irs debt gone and done.
    -Am I correct in thinking that our house would be protected no matter what the equity? (Married, house in both names, irs debt only in my name, cc’s only in my name, we do have a second mortgage heloc in both, however.)
    -Would it in any way affect my wife’s credit as her name is on the house, too but it’s only me filing. (tenants in entirety?)
    -Thought about trying to get back into Case Closed CNC with IRS to stop collections temporarily but eventually with 4 years to go I will be paying the house down as expected along with all cc debt AND the home may go up as economy improves- I am afraid the irs may simply take the house if there’s enough equity in it just prior to their statutes of limitation, etc. I will have a Bankruptcy on my record but my wife will not. There will only be 4 years left to get the lien withdrawn if not sooner after bankruptcy. Most importantly I can move on and sleep at night- priceless. Your outside the box thoughts? I know you are giving concrete literal legal fact here but thought I would ask.
    Little note- I have never not paid taxes- ever- except this one time in 2008. My clients were all financial industry clients and we all know what happened back then. I kept up with all state and payroll and every other tax out there and still continue to do so.
    I might even consider writing the irs telling them to consider wiping the slate for what it would cost me to file for chapter 7 and lift my lien. Ya never know, right?

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      Robert Weed

      December 18, 2015, pm31 9:50 PM


      You absolutely need to meet with a bankruptcy lawyer and go over everything very carefully. Make sure there isn’t an important factor that you have overlooked in what appears to be a complete analysis of your situation.

      On your first legal question: when you file bankruptcy, you file bankruptcy. People, most people, think you pick and chose what you file bankruptcy “on”–but that’s not right. You just file bankruptcy. So you can’t put the taxes “in” and leave the credit cards “out.”

      On your second question, the equity in the house–based on what you said, tenants by entirety, wife is alive and you are still married, cards only in your name–the credit cards cannot reach the real estate equity. Nor can the taxes. BUT…

      BUT, the Supreme Court has said the the IRS, using Federal power out to its tippy-toes, can attach a lien to real estate that’s t/e. So there is a line, that is ATTACHED to the real estate equity. Last time I checked, I was unable to determine what the IRS could DO with that kind of lien. But you need to find out before you do anything. (Or if still nobody knows, you need to know that.)

      You definitely need to talk to a lawyer who is a dual specialist in bankruptcy and tax.

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    December 18, 2015, pm31 9:58 PM

    -an added question to my above post…..
    -can I just file for chapter 7 bankruptcy and include all debt that is mine alone and not have to include that is joint, for instance:
    1. irs fed income tax (it qualifies as stated above for chapter 7)
    2. credit card debt in my name only
    -all while leaving my first and second mortgage alone which is in both my wife and myself’s name?
    Thanks again,

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      Robert Weed

      December 18, 2015, pm31 10:29 PM


      Most people would say I’m one of the two or three top bankruptcy lawyers in Northern Virginia. If you came into see me, I’d likely tell you I was NOT the best guy to handle your problem, because the tax issues are so big. But I’d only make that decision after you spent at least an hour with one of my paralegals, and another hour with me.

      Based on what I know about you, you need to talk to somebody who is qualified BOTH in bankruptcy and in tax law.

      Now we are getting into what I call Texas Hold’em, consultation. You are turning over the cards one at a time, and I’m trying to guess what you have in your hand. That’s not a good way to proceed.

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    November 2, 2016, am30 6:34 AM

    I have $13,000 cash surrender value in a life insurance and I am thinking of filing for bankruptcy in Fairfax County Virginia.
    Will it be exempt from Chapter 7 bankruptcy?

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      Robert Weed

      November 2, 2016, am30 9:43 AM


      Well probably; your lawyer will want to know the exact details of the policy to be sure.

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    December 13, 2017, am31 10:18 AM

    Good morning, Mr. Weed. My mother had a whole life insurance policy on my father. When my mother passed away, my father made me the owner of the policy. So I am the owner of a whole life insurance policy on my father, and I’m now the beneficiary.

    If I have to file for Chapter 7, will the bankruptcy court count any surrender value of that policy as an asset to me? Or is that life insurance policy protected under the new law you mentioned above, §38.2-3122?

    Thank you for your help.

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      Robert Weed

      December 17, 2017, am31 10:56 AM


      I’ve told you ads much as I can say about the law. To be positive how it applies to you, you need your own lawyer to look at it very carefully.

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    March 23, 2018, pm31 9:33 PM

    I have a newer model camper (29 ft travel trailer bunkhouse) that is in my name only. It is paid for. Is it covered under the exemptions or can they take it in a chapter 7 bankruptcy?

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      Robert Weed

      March 24, 2018, pm31 5:45 PM


      I’m not an expert on campers. Does it have a DMV title? If it does depending on what else you have, you could probably protect it up to a value of $11,000. I have no idea what the book value of your trailer is. And other things you own could cut down on how much protection you have available for the trailer.

      You are your lawyer need to go over your complete info to decide what to do.

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    August 29, 2018, pm31 8:16 PM

    I have a question… Our dog was bought through a payment plan. And we are looking at chapter 7. Will they take our dog since the loan hasn’t been paid off or would they want just the money? They ended up switching companies with it and we never heard anything since last year in July. I don’t want to lose our dog. Please help.

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      Robert Weed

      August 30, 2018, am31 10:09 AM

      Sandra, I think it depends on state law. If you haven’t heard anything in over a year, I doubt anyone will make an issue about it, but how expensive was the dog?

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    Jeff Tank

    September 20, 2018, am30 4:50 AM

    I have a car worth $5500 per blue book in fair condition, due to $900 body damage and mileage, and two motorcycles, worth around $2500~$3000 if sold privately. All are paid for. I also have another motorcycle still being financed with $2000 left in payments and worth around $4000~$4500 if sold privately (if loan was paid off). I am 68 years old, retired and down’ own much else as all home furnishing and house is solely owned by my partner. I work part-time to supplement my SS income so need my car to get to work. If i state a willingness to sign a reaffirmation agreement to kept the payments on the one motorcycle still being financed and can show I could afford to do so with my my debt cleared, what are the chances I could keep all three motorcycles, or at least the two fully paid for which are in total sale value $2000 less than the one being financed? One is a 43 old un-restored vintage 125cc and the other is a small displacement, kick start single no longer being made for which there isn’t really any for sale listing except some 2014 to 2017 models still sitting un sold in dealers showrooms at deep discounts since there is really no market in the US for small displacement, air cooled singles with no electric start.

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    Jeffry Tank

    September 20, 2018, am30 5:02 AM

    Let me rephrase my recent post in more simple terms, (I tend to be long winded, sorry!). If I don’t have any home furnishing to speak of since everything is owned by my partner, including mortgage, could I use the $5000 personal property credit for my three motorcycles? Or at least the two fully paid for worth no more than $2500~$3000 resale? My car is worth around $5,500 due to condition and year (2011). And would showing I would be willing to sign a reaffirmation agreement allow me to keep the one still being financed.

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      Robert Weed

      September 27, 2018, pm30 5:23 PM


      You cannot use your furniture allowance to protect the motor cycles.

      But you have $6000 for motor vehicles and $5000 for anything you want at all. That comes to $11,000 which seems to protect all the paid for vehicles.

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    July 15, 2019, pm31 2:25 PM

    Hi Mr. Weed,
    I was considering filing chapter 7, as I am a single mom who just purchased a home as a short sale last year in VA. The house has about 50k in equity due to me purchasing it as a short sale. Is that too much equity to have, and will the trustee force me to sell my home? I don’t really have the money each month to pay a payment plan for Chapter 13, so I’m feeling stuck about what to do, but need to come up with a solution sooner than later.

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      Robert Weed

      July 15, 2019, pm31 4:05 PM


      You need to meet me or another BK lawyer in person to look at your situation in detail and figure out the best plan. You are right that in most of America you would file Chapter 7 with no worries and here there’s a lot to worry about. W.ay too much to try to cover by email

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