Individuals who reside, have a place of business, or own property in West Virginia may file for bankruptcy in a federal court under Chapter 7 (liquidation). Clagett Law Office serves individuals and small businesses within the counties of the Northern District of West Virginia. Chapter 7, as with other bankruptcy chapters, is not available to individuals who have had bankruptcy cases dismissed within the prior 180 days under specified circumstances. Eligibility is partly determined by the Bankruptcy Means Test.
In a West Virginia Chapter 7 bankruptcy, the individual is allowed to keep certain exempt property. Most lien, such as real estate mortgages and security interests for car loans, survive. Other assets, if any, are sold (liquidated) by the interim trustee to repay creditors. Many types of unsecured debt are legally discharged by a bankruptcy proceeding in West Virginia, but there are various types of debt that are not discharged in a Chapter 7. Common exceptions include child support, income taxes less than 3 years old and property taxes, student loans, and fines and restitution imposed by a court for any crimes committed by the debtor. Spousal support is likewise not covered by a bankruptcy filing, nor are property settlements made through divorce. Despite their potential non-dischargeability, all debts must be listed on bankruptcy schedules.
Bankruptcy discharge stays on an individual's credit report for up to 10 years for most purposes. This may make credit less available and/or terms less favorable, although high debt can have the same effect. That must be balanced against the removal of actual debt from the filer's record by the bankruptcy, which tends to improve creditworthiness. Consumer credit and creditworthiness is a complex subject, however. Future ability to obtain credit is dependent on multiple factors and difficult to predict.