Virginia Debt Relief Laws

If you are a Virginia resident overwhelmed by unpaid credit card accounts, medical bills and other debts, you potentially qualify for informal or formal debt relief. Paying your debts on time or making alternative arrangements is important, because Virginia law 8.01-246 allows most creditors to sue you for unpaid debt. Generally, creditors have from three to 10 years to sue you, depending on the type of debt incurred and any contracts you signed.

Credit Counseling

A number of non-profit credit counseling services offer debt relief for Virginians. You can attend a workshop and learn more about managing your money or sign up for a credit counseling session. During these sessions, you and a certified credit counselor can discuss your finances and decide which repayment options work within your budget.

Debt Management Plans

If you have some disposable income, you can usually sign up for a debt management plan. Your credit counselor will renegotiate your debts and attempt to reduce the payments owed. Once you agree to a debt management plan, you must stop using credit and make one monthly debt payment to your selected Virginia credit counseling agency. Most debt management plans charge a monthly service fee.

Chapter 13 Bankruptcy

Local branches of the United States Bankruptcy Court offer a partial debt repayment plan to Virginia residents with regular income under Chapter 13. It usually takes three to five years to finish repaying a Chapter 13 case; during this time you cannot legally get any new credit without a Virginia bankruptcy judge's consent. Also, the fact that you filed Chapter 13 will harm your credit rating for seven years from the date you requested this debt relief. You cannot include most tax debts, most federally-backed student loans, child support, alimony or court fines in any type of case, warns the book "How to File for Chapter 7 Bankruptcy."

Chapter 7 Bankruptcy

As of 2011, if you are a single Virginia resident earning less than $50,296 a year you can file Chapter 7 bankruptcy. The income level for a two-member household is $63,613, while the eligibility figure for a family of four is $86,990, according to the U.S. Trustee Program. Chapter 7 permanently liquidates many of your preexisting debts, but harms your credit rating for 10 years. You also risk losing some of your assets; but if you have lived in Virginia for at least two years you can retain some of your property, such as $5,000 of jewelry and $5,000 of real estate equity, under state asset exemption laws.