Bankruptcy: West Virginia
Filing bankruptcy in West Virginia provides petitioners an option to potentially recover from crippling debt, and provides creditors an opportunity to recover some losses based on the value of the debtor’s property or future earnings. 6,035 bankruptcies were filed in West Virginia in 2010, ranking West Virginia 34th in the nation for the number of bankruptcy filings per capita. 89% of West Virginia’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.
Filing Bankruptcy in West Virginia
Bankruptcy in West Virginia is governed by federal law and West Virginia bankruptcy cases are filed in the US Bankruptcy Courts in:
- West Virginia Northern District Court: Clarksburgh, Wheeling
- West Virginia Southern District Court: Beckley, Bluefield, Charleston, Huntington, Parkersburg
Though federal courts have exclusive jurisdiction over bankruptcy proceedings, West Virginia law prohibits petitioners from choosing the exemptions listed in the U.S. bankruptcy code; petitioners must choose instead from the exemptions provided under West Virginia law. With the counsel of a bankruptcy attorney West Virginia petitioners can determine what personal property the system permits the petitioner to keep in bankruptcy, and what must be sold.
Chapter 7 Bankruptcy, West Virginia
Chapter 7 bankruptcies in West Virginia make up the majority of the state’s bankruptcy filings. Chapter 7 is well-suited to debtors who do not own substantial assets, such as significant investments or equity in a home, given that a Bankruptcy Trustee may liquidate personal property that is not protected by West Virginia’s bankruptcy exemptions. Liquidation occurs when the Trustee converts personal assets to cash for distribution to creditors. West Virginia’s Chapter 7 bankruptcy law allows petitioners to keep some essential property; the exempt assets cannot be accessed by creditors looking for repayment.
The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.
West Virginia Bankruptcy Exemptions
West Virginia’s state laws include detailed property exemptions that let petitioners keep certain personal property and assets so that debtors can rehabilitate their financial situation through bankruptcy and not be rendered entirely destitute. Bankruptcy in West Virginia allows petitioners to choose exemptions from only the state list.
Personal property exemption values may change, so it is suggested that petitioners meet with a West Virginia bankruptcy attorney to discover how bankruptcy will impact their financial circumstances. West Virginia bankruptcy exemptions include:
West Virginia Homestead Exemption
- $25,000 total: Real or personal property used as residence; unused portion of homestead may be applied to any property (Husband and wife may double)
West Virginia Personal Property Exemption
- Health aids
- $8,000 total: clothing, books, musical instruments, furnishings, household goods, appliances, animals and crops; limit $400 per item
- $2,400 total: Motor vehicle
- $1,000 total: Jewelry
- Lost earnings payments needed for support
- Prepaid higher education tuition trust fund and savings plan payments
- $15,000 total: Personal injury recoveries
- Wrongful death recoveries for person you depended on, needed for support
- $25,000 total: Burial plot in lieu of homestead
West Virginia Tools of Trade Exemption
- $1,500 total: Implements, books and tools of trade
West Virginia Wage Garnishment Exemption
- Minimum 30 times the federal minimum hourly wage per week (Low-income debtors may be approved for more)
West Virginia Public Benefits Exemption
- Aid to blind, aged, disabled; general assistance; social security
- Workers’ an Unemployment compensation
- Veterans’ benefits
- Crime victims’ compensation
West Virginia Insurance Exemption
- Health or disability benefits
- Fraternal benefit society benefits
- Group life insurance policy or proceeds
- Life insurance payments from policy for person you depended on or needed for support
- Unmatured life insurance contract, except credit insurance policy
- $8,000 total: Unmatured life insurance contract’s accrued dividend, interest, or loan value, if debtor owns contract and insured is either debtor or a person on whom debtor is dependent
West Virginia Pensions and Retirement Savings Exemption
- Public employees
- ERISA-qualified benefits, IRAs; All deposits in IRAs, SEPs and other individual retirement accounts
West Virginia Miscellaneous Exemption
- Alimony, child support
- Property of business partnership
West Virginia Wild Card Exemption
- $800: Any property, plus unused portion of homestead or burial exemption
Chapter 13 Bankruptcy, West Virginia
In 2010, 11% of petitioners filed for protection under Chapter 13 bankruptcy laws in West Virginia. When a debtor files Chapter 13 bankruptcy in West Virginia, a court-appointed Trustee is responsible for reorganizing debts and executing a 3-5 year repayment plan, by which creditors are repaid using the debtor’s future earnings. Chapter 13 petitioners in West Virginia keep most – or all – of their property.
How to File Bankruptcy in West Virginia
A key consideration for those petitioning for bankruptcy protection is whether the debtor qualifies for essential property exemptions. The ideal outcome of filing for bankruptcy would be for the debtor to keep major assets and for their debts to qualify for discharge. A West Virginia bankruptcy attorney can evaluate a debtor’s individual circumstances and provide counsel as to whether Chapter 7 or Chapter 13 bankruptcy is a practical solution for their financial situation.
Bankruptcy Attorney: West Virginia
It is important for debtors to know their privileges and obligations as bankruptcy petitioners. A West Virginia bankruptcy attorney can counsel petitioners about how the federal laws and state exemptions apply to each individual’s circumstance and advise debtors how to protect their assets and move forward from debt.