Legal Question in Bankruptcy in Virginia

Re: Homestead deed

You should consult with a Virginia lawyer to discuss the application of the law to the facts of your particular situation. The following is general legal information on the Homestead Exemption in Virginia.

There are a number of state and federal laws that allow persons to hold property exempt from creditor process, meaning that property cannot be attached by creditors to satisfy judgments or debts. In bankruptcy, the debtor�s exempt property is not subject to liquidation by the trustee.

One exemption in Virginia is the homestead exemption:

"Section 34-4. Exemption created. � Every householder shall be entitled, in addition to the property or estate exempt under �� 23-38.81, 34-26, 34-27, 34-29, and 64.1-151.3, to hold exempt from creditor process arising out of a debt, real and personal property, or either, to be selected by the householder, including money and debts due the householder not exceeding $5,000 in value. In addition, upon a showing that a householder supports dependents, the householder shall be entitled to hold exempt from creditor process real and personal property, or either, selected by the householder, including money or monetary obligations or liabilities due the householder, not exceeding $500 in value for each dependent..."

Disabled veterans with a service-connected disability of 40% or more may be able to claim an additional $2,000 in value under Section 34-4.1.

Sections 34-6 and 34-14 set forth the form of the deed used the claim the homestead exemption in real or personal property in Virginia.

Section 34-17 sets forth when the exemption may be claimed in bankruptcy:

"A. The real or personal estate which a householder is entitled to hold as exempt may be set apart at any time before it is subjected by sale under creditor process, or, if such creditor process does not require sale of the property, before it is turned over to the creditor. To claim an exemption in bankruptcy, a householder who (i) files a voluntary petition in bankruptcy or (ii) against whom an involuntary petition in bankruptcy is filed shall set such real or personal property apart on or before the fifth day after the date of the meeting held pursuant to 11 U.S.C. � 341, but not thereafter. A householder who converts a case from Chapters 11, 12, or 13 to Chapter 7 shall set such real or personal property apart on or before the fifth day after the date of the meeting held pursuant to 11 U.S.C. � 341 in the Chapter 7 case, but not thereafter. Nothing in this section shall affect the right of the trustee in bankruptcy, with the approval of the court, to proceed immediately with the sale or other disposition of personal property which the trustee determines to be perishable or particularly susceptible to price deterioration...