By John G. Merna, Esq.
Bankruptcy is more powerful than most people realize. In fact, it is one of the most misunderstood legal tools available to Virginia families. Here are five facts that might surprise you.
1. You Can Buy a Home Just Two Years After Bankruptcy
Many people assume bankruptcy ruins their chances of ever owning a home. That is simply not true. FHA loans are available just two years after a Chapter 7 discharge. In addition, some lenders offer financing even sooner after a Chapter 13 filing. As a result, bankruptcy can actually accelerate your path to homeownership — not delay it.
2. You Can Keep Your Property
Most people who file bankruptcy in Virginia keep everything they own. Virginia’s exemption laws protect your home equity, your car, your retirement accounts, and most personal property. Therefore, bankruptcy eliminates your debt — not your assets. You do not have to give up your car or your house to get a fresh start.
3. Bankruptcy Stops Collection Calls Immediately
The moment you file bankruptcy, the automatic stay takes effect. This is a federal court order. It immediately stops all collection calls, wage garnishments, lawsuits, and foreclosure proceedings. Creditors must stop contacting you. However, if they violate the stay, they can face sanctions. The relief is real — and it starts the day you file.
4. Bankruptcy Does Not Ruin Your Credit Forever
A Chapter 7 bankruptcy stays on your credit report for ten years. However, most clients begin rebuilding credit within 12 to 18 months of their discharge. In fact, many clients report credit scores in the 680–700 range within two to three years. That is because eliminating debt immediately improves your debt-to-income ratio. As a result, lenders often view discharged borrowers as lower risk than those still drowning in debt.
5. Most People Qualify for Chapter 7
Many people worry they earn too much to file bankruptcy. In reality, most working families in Virginia qualify for Chapter 7. The means test compares your income to Virginia’s median income. If you fall below the median, you qualify automatically. Furthermore, even those above the median often qualify after allowable expenses are deducted. A free consultation with Merna Law takes about 30 minutes and tells you exactly where you stand.
Free Consultation — No Obligation
If debt is weighing on you, do not wait. Call Merna Law at 757-490-3800 for a free phone consultation. We serve clients throughout Virginia with a fully virtual process — no office visit required.
