Northern Virginia Law Blog

The purpose of Chapter 7 personal bankruptcy is to provide a fresh start for an individual who has fallen behind on obligations to creditors. Most Virginia residents are aware to some degree that certain categories of debt are not dischargeable in accordance with federal law. These include student loans, child support and alimony and government taxes. However, a question remains whether or not a judgment entered against the debtor can be discharged.

At first blush, it may seem inappropriate for a debtor to be released from a judgment that was based in some form of intentional or even negligent conduct. However, in evaluating whether a judgment is dischargeable, legal scholars explain that the bankruptcy court must look to the federal exceptions to bankruptcy and not simply assume that a state case resulting in a judgment met the federal standards. This is true even if the underlying state case dealt with fraudulent conduct.

According to Federal Reserve Data, Virginia residents and others have combined to accumulate $1.05 trillion in revolving consumer debt as of the fourth quarter of 2018. Consumers have accrued $870 billion in credit card debt, which beats the previous record high set in 2008. At the end of 2018, there were about 100 million more credit card accounts than in 2010. Between the final quarter of 2017 and 2018, there were an additional 37 million accounts that were 90 days past due.

The percentage of accounts that are 90 days past due has increased since 2016 to about 5%. However, this is still lower than in 2009 when delinquency rates were above 10%. Research shows that there is not necessarily a correlation between a person's credit score and the amount of debt that he or she has. This is because credit scores generally track whether a person makes minimum payments each month.

Debt collectors in Virginia and around the country have become increasingly aggressive in recent years, and daily calls demanding payment have become the norm for people who are struggling to make ends meet. The tactics used by third-party bill collectors often border on harassment, and they may also violate federal law. The Fair Debt Collection Practices Act was signed into law in 1977 by President Jimmy Carter, and it prohibits debt collectors from engaging in unfair, deceptive, or abusive practices to secure payment.

Under the provisions of the FDCPA, third-party bill collectors are not permitted to contact consumers at their places of work or at certain inconvenient times. They are also not allowed to tell a debtor's friends or family members about unpaid bills and must cease making contact when asked to do so in writing. They are also prohibited from using coercion or harassment to encourage debtors to pay.

For some single people in Virginia, estate planning may seem like more trouble than it's worth. After all, these individuals don't usually have to worry about providing for a loved one, such as a spouse or minor child. However, estate planning is about more than just passing on assets.

For example, every adult should consider making out a power of attorney or health care proxy. These estate documents are used during a person's lifetime to address key medical and financial questions during cases of incapacitation. Single people may want to pay particular attention as hospitals and others will not be able to turn to a spouse to make these decisions. Therefore, estate owners who want to ensure that their wishes will be respected can benefit from naming a trusted person to handle these issues. One may also want to create a health care advance directive to indicate their wishes.