One paradox some people in Virginia may face if they are considering bankruptcy is that while filing is a thing they need to do because they lack money, filing for bankruptcy costs money. There is usually a surge in bankruptcies in March and April as people get their tax refunds and use that to pay for bankruptcy.
However, even this option may be out of reach. This may lead to some people not filing at all and hoping that there are not such repercussions as having their wages garnished. Others may fall victim to unscrupulous companies that file fake bankruptcies, or they file for a Chapter 13 bankruptcy, which puts them on a payment plan, when they should have filed for a Chapter 7. The latter issue disproportionately affects African-American debtors.
The American Bankruptcy Institute, an organization of professionals including judges and attorneys, issued a report with suggestions about how the bankruptcy process could be improved with some legislation from Congress. One major recommendation is making it less difficult for people to discharge student loans in bankruptcy. This is currently only possible if a person can demonstrate extreme hardship. The report also recommended that professionals be trained about implicit bias to address some of the issues faced by African Americans.
People who are struggling with bankruptcy may want to talk to an attorney about the options for debt relief and the types of bankruptcy that are available. While Chapter 13 is not right for everyone, many people successfully file for it and are able to protect a home from foreclosure or keep other assets as long as they are able to stick to a payment plan. The payment plan lasts for three to five years. Filing for bankruptcy will also immediately stop creditor harassment.