Tonya L. Janney

Here is a situation that no adult ever wants to come face to face with. For some time now, you haven’t been able to keep up with your bills and other credit repayments. This is a scary situation to be in as you may not know the way forward. You may not be able to turn to the people around you. They may not be of much help to you in this situation. You could be facing a foreclosure.


Luckily, the law does have provisions that can help you through this crisis. What, or rather, who, you can turn to, however, is a bankruptcy lawyer. Bankruptcy attorney Rocky Mount VA can help you get back on track.

Chapter 13 


In Chapter 13 you can restructure your debts: you can stretch them out over a longer period of time, lower your monthly payments, pay some creditors in full, pay other creditors zero, or pay some of them a percentage of their debts.


When you file for Chapter 13 bankruptcy, you and your attorney will prepare a repayment plan that details what debts you want to keep and pay over the next 3 – 5 years. The minimum amount you will have to repay depends on how much you earn and how much you owe.


If you have secured debts, such as a mortgage or vehicle, Chapter 13 gives you an option to make up the missed payments to avoid repossession or foreclosure. You can include these past due amounts, as well as past-due child support and taxes, in your repayment plan to stretch them out over a 3 – 5 years. If you have unsecured debts such as credit cards, medical bills, payday loans, Chapter 13 allows for these debts to be wiped out. If you are facing a garnishment, a Chapter 13 stops the garnishment. My law firm can help stop the phone calls from your creditors.

Chapter 7

Chapter 7 bankruptcy is known as the “fresh start” bankruptcy because it typically only takes about 6 months to completely close. In Chapter 7 you decide what debts you want to keep and what debts you want to wipe out.


The key difference between a Chapter 13 and a Chapter 7 is how you treat the items you wish to keep. If you have secured debts such as a mortgage or vehicle that you wish to keep, they will pass through the Chapter 7 and the note will remain the same.


If you have unsecured debts such as credit cards, medical bills, payday loans, etc. a Chapter 7 will discharge these debts, meaning your obligation to pay these debts is eliminated. If you are facing a garnishment, filing a Chapter 7 will stop the garnishment.  


A bankruptcy releases you from your responsibility for most debts and stops creditors from taking any collection actions against you regarding those debts. There are many exceptions to Chapter 7 discharge, so you should consult an experienced bankruptcy attorney before you file.  We can help stop the phone calls from your creditors, My law firm can help stop the phone calls from your creditors.


Foreclosure is a legal process that a mortgage company takes to repossess your home when you get behind on payments.


In the Commonwealth of Virginia, the mortgage company does not have to file a lawsuit against you to foreclose on your home. The mortgage company does not have to send you a letter telling you they are foreclosing.


All the mortgage company has to do to foreclose on your home is to run an ad in the newspaper for 3 weeks, on the 4th week, an auction to sell your home will take place on the courthouse steps.  


If the mortgage company gets a deficiency judgment against you, they can use all of the legal remedies available, including the garnishment of your wages, garnishment of your bank accounts, and levying other property to collect.


If you wish to keep your home, Chapter 13 bankruptcy can stop the foreclosure process as long as you file bankruptcy before the auction date. If you do not want to keep the home, or a mortgage company already has a deficiency judgment against you, Chapter 13 or Chapter 7 can wipe the debt out. Be sure to speak with an experienced bankruptcy attorney to decide which type of bankruptcy is best for you and your situation.  


Repossession is when a creditor comes to your house and tries to take property from you. Repossession happens most often with vehicles. If you fall behind in your payments or let your insurance lapse the finance company will come and get the vehicle.


There is no law that says you must be 2 or 3 payments behind before they can repossess your car. If your payment is due on the 5th and you do not pay it, then you are late and your vehicle can be repossessed. Most finance companies have company policies that say they won’t repossess until you are several months behind, but each company is different.


Once repossessed, the law says a creditor must notify you in writing that the property will be sold and they must give you 10 days to get it back before it is sold. 


If the vehicle is repossessed and then sold, the creditor will send you a letter demanding the balance of the money you owe after the sale. This is called a deficiency. If you do not pay the deficiency, a lawsuit may be filed against you which can be used to garnish your wages or bank accounts in your name.


The quickest way to get your vehicle back if it is repossessed is to pay payments owed. If you cannot catch up the back notes, a Chapter 13 bankruptcy can get you the vehicle back, but you must act quickly. If you do not want to keep the vehicle, Chapter 7 could help you get rid of the deficiency, but speak with an experienced bankruptcy attorney to understand the best option for you.  

Judgments and Garnishments

A judgment is an official court order that states you owe money to a creditor. A judgment can include the original debt, court costs, interest and attorney fees, usually adding up to a lot more money than you originally owed.


Once your creditor has a judgment against you, it will attach it to any land or homes you own in the same county. They can garnish your wages or bank accounts. A wage garnishment is an order from the court or a government agency sent to your employer telling them to hold money out of your paycheck. When your employer receives a garnishment order, they are required to withhold 25% from your paycheck each pay period and send this money to your creditor.


The law has a provision which allows you a 30 day grace period, which prevents your employer from taking any money out of your paycheck for 30 days after the garnishment order is served on the job. However, most employers never tell the employee that they received the garnishment. Usually the first time you know about a garnishment on your paycheck is when you see 1/4th of your paycheck missing. The 30 day grace period is there to allow you time to contest the garnishment or to stop it. What if you never received notice of the lawsuit? What if the debt was for someone else with a similar name? There are a lot of reasons why a garnishment might not be valid.


Generally, once the garnishment goes into effect, your employer cannot take more than 25% of your disposable earnings. Disposable earnings are what is left over after your employer has taken out taxes and deductions required by law.


If you have more than one garnishment, the total amount that can be taken from your pay is 25% however this does not include child support. Any other garnishment you have will just have to get in line and wait for the first garnishment to finish.


Bankruptcy can stop garnishments. Some of these debts may be wiped out and others may be paid over a 5 year period to bring it down to an affordable level. Make sure you speak with a knowledgeable bankruptcy attorney to find out what applies to your situation and which bankruptcy is best for you.

Taxes, Student Loans, and Child Support

Dealing with taxes, student loans, and child support can get complicated and you will need an attorney to guide you through the process and the relief available for your specific situation.


There are numerous ways to deal with tax debt. The main thing you need to understand is that you do not go to jail for not paying your taxes – you can go to jail for not filing your tax returns. It is important to note that all tax returns must be filed with the IRS before you can file bankruptcy. There are options for dealing with tax debt. Some taxes can be wiped out in bankruptcy. For taxes that must be paid, bankruptcy can stretch out the payments for up to 5 years, when the IRS may only offer a 2-year payment plan. Also, bankruptcy can stop the penalties and interest during your repayment period.


Whether you are concerned about your personal student loan debt, protecting the person that co-signed for you, or you co-signed for someone and are now experiencing collection calls – this type of debt can feel overwhelmingly complicated leaving you feeling hopeless. When you take a very general look at bankruptcy law, student loan debt cannot be wiped out, but as with most rules, there are exceptions. If you can establish a substantial undue hardship, you may qualify to wipe out this debt in a bankruptcy case. Chapter 7 bankruptcy can stop and then delay any collection actions such as taking your tax refund, garnishments, etc. while your Chapter 7 case is open. Chapter 7 may be what you need if you have substantial debt in other areas and by wiping those out you could handle your student loans. Chapter 13 bankruptcy can stop any collection activity for up to 5 years.  Your attorney can calculate a monthly amount you can pay towards your student loans that work within your budget.


If you are past due on child support, alimony, or other support obligations, you could face garnishment, loss of your driver’s license, jail time, etc. Domestic support obligations such as these cannot be wiped out in any type of bankruptcy. You can get help catching up on the past due amount through Chapter 13. You can spread out the amount you are behind for up to 5 years and still remain under the protection of the court during this time period. Non-support debts, which are any other debts arising out of a divorce decree, separation agreement, or similar court order, cannot be discharged in any type of bankruptcy except a Chapter 13. For example, attorney fees, sanctions for contempt, costs, fees, payments to third parties like a mortgage or car notes, etc. may be eligible for discharge in a completed Chapter 13, but not Chapter 7.


These laws are complicated when it comes to debts that can or cannot be wiped out. It is important to have the documents that layout your obligations with you when you consult a bankruptcy attorney.  

Business Bankruptcies

If your business is seeking relief, Chapter 11 may be a better choice for businesses that may have a realistic chance to turn things around. Chapter 11 business bankruptcy is usually used for partnerships and corporations.  It is also used by sole proprietorships whose income levels are too high to qualify for Chapter 13 bankruptcy.


Chapter 11 is a plan where a company reorganizes and continues in business under a court-appointed trustee. The company files a detailed plan of reorganization outlining how it will deal with its creditors. The company can terminate contracts and leases, recover assets, and repay a portion of its debts while discharging others to return to profitability.  It presents the plan to its creditors will vote on the plan. If the court finds the plan is fair and equitable, it will approve the plan.


Reorganization plans provide for payments to creditors over some time. Chapter 11 bankruptcies are exceedingly complex and not all succeed. It usually takes over a year to confirm a plan. 

Debt Collectors

If you have been harassed by debt collectors you know how horrible it can be. They will lie, shout, threaten, and verbally abuse you. They call your friends, family, and job. You don’t have to put up with this treatment. These methods work so well that there are scammers and con-men out there collecting on debts that you may not really owe.


Threatening to file a lawsuit against you is also a tactic and is often followed through. Sometimes it is beneficial to fight that individual lawsuit if you are financially ok otherwise. Other times it’s more beneficial to file bankruptcy to stop the lawsuit and clean up all your debt problems for the price of fighting just one lawsuit on its own.

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