Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
Hi - my name is XXXXX XXXXX I'm a Bankruptcy litigation attorney here to assist you.
Yes, this is possible if she is not behind on her house and car payments. If that is the case, she can file chapter 7 and receive a discharge for all debts - except those that she reaffirms (agrees to continue to pay in order to keep the property), such as the house and car.
It is quite common for people to file bankruptcy and reaffirm the debts on their shelter and means of transportation.
If she is behind on her house or car payment, the lender would be able to agree to allow her to catch up and reaffirm the debt OR it could refuse to allow her to bring the payments current and foreclose/repossess based on her default. Even if she files bankruptcy, the creditors can proceed with their collection once it asks the court for permission to be relieved from the automatic stay, which is a common request.
Your mother's vehicle would be exempt if she owes nothing on it and it is worth less than $6000 ($10,000 if she uses it for work).
Here's a good link that outlines the bankruptcy process in Va: http://www.virginia-bankruptcy.com/process.html.
If she's serious about filing, she should see a local bankruptcy attorney to handle it for her to make sure her voluntary petition is correct and that she is able to get all of her debts discharged except her mortgage.
The initial filing is the voluntary petition, which can be viewed here: http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Current/B_001.pdf. Also, there are several schedules and forms that must be filed, which are listed here: http://www.uscourts.gov/FormsAndFees/Forms/BankruptcyForms.aspx
Usually, simple bankruptcies can be done for less than $1000, and it's well worth the money to make sure it gets done right.
I would certainly recommend that she hire an attorney to handle this. Again, the expense usually isn't that great for a simple filing like this.
The best way to find a local bankruptcy attorney is to visit www.martindale.com. You can locate an attorney by area of practice and location.