Personal Bankruptcy Attorneys in Seattle, WA

Qualifying for Chapter 7

To qualify for Chapter 7 bankruptcy, you generally must make less than your state’s median income. This is called the means test. Chapter 7 is typically best for those with a low income and minimal assets.

What Is Chapter 13 Bankruptcy?

Unlike Chapter 7, Chapter 13 involves debt reorganization. Rather than undergo asset liquidation, you will propose a plan to fully or partially repay your creditors over time, subject to the approval of the bankruptcy trustee.

While Chapter 7 bankruptcies take place immediately, bankruptcies under Chapter 13 last from 3-5 years, during which you will make regular payments to the trustee using all your disposable income. Individuals typically choose Chapter 13 for a few reasons.

They may not qualify for Chapter 7 because they don’t pass the means test. Alternatively, they may qualify for Chapter 7, but they don’t want to risk losing high-value assets. Many people use Chapter 13, in fact, to save their homes from foreclosure. Ultimately, Chapter 13 is best for individuals with a steady income and more assets than they could protect through exemption claims. 

Need help deciding which type of bankruptcy is right for you? Contact us at (206) 483-0505 today to schedule a consultation with a bankruptcy attorney in Seattle, WA.

How Does Personal Bankruptcy Work in Washington? 

No matter which chapter you choose, bankruptcy provides powerful legal and financial tools you can use to take control of your finances and keep creditors at bay.

The following is a general overview of the bankruptcy process, and our attorneys at Seattle Consumer Justice can help you understand how this process may change depending on your unique situation.

Preparing to File for Bankruptcy

Before filing your bankruptcy petition, you will need to complete Consumer Credit Counseling. As of October 17, 2005, all consumers must complete and obtain a certificate from an approved credit counselor before filing for bankruptcy.

We can help you find an approved credit counselor and provide any additional information you will need to prepare.

Like most legal proceedings, bankruptcy comes with its share of paperwork, including:

• The bankruptcy petition
• Schedules
• A Statement of Financial Affairs
• The bankruptcy plan

Our office helps you compile and review all documents so you can feel comfortable signing them under penalty of perjury. Once we file your case, you will be assigned a case number, and this commences your case.

The Automatic Stay

One of bankruptcy’s most powerful benefits comes right when you file.

An automatic stay is an injunction that takes effect immediately after filing a bankruptcy case, effectively freezing all debt collection attempts by creditors, including:

• Repossessions
• Garnishments
• Foreclosure actions
• And more

As long as the stay is in effect, creditors cannot continue a lawsuit or even call you on the phone to demand payment.

The Meeting of Creditors

This mandatory meeting is often colloquially called a 341 meeting. You and your attorney will meet with the bankruptcy trustee, an independent person who is automatically appointed when the case is filed.

The trustee works for the United States Trustee Program (an administrative branch of the U.S. Department of Justice) and is charged with administering a bankruptcy estate, accounting for your non-exempt property, and safeguarding the interests of all parties according to the law.

This is generally a routine hearing where you will provide evidence of your identification, such as your Social Security card, and testify that you reviewed, signed, and understand the documents you filed with the court.

There may be additional questions about your asset valuations, non-exempt assets, plan of reorganization, or any property you sold within the two years before the bankruptcy filing.

Our Seattle consumer bankruptcy lawyers are here to help. Give our firm a call at (206) 483-0505 or contact us online today.

Objection Periods

After the 341 meeting, the trustee will have 30 days to file an objection to any exemptions you have claimed. This is rare, and we will work with you to minimize the chances of this happening. Additionally, your creditors will have until 60 days after the date of your meeting with the trustee to file a motion objecting to the discharge of your debt.

Here are a few examples of potential grounds for objection:

• Lying on a credit application
• Committing willful or malicious injury to a person or their property
• Committing other types of fraud (e.g. incurring a debt you did not intend to repay or did not have a reasonable ability to pay at the time)

Usually, no one files an objection, and you can proceed with your case. If a creditor does file an objection, a trial is scheduled, and you must decide whether to offer a defense, negotiate a settlement, or choose not to contest the complaint. We can help you decide which is the best option to take.

Financial Management Course

One of the new requirements imposed in 2005 is that bankruptcy filers must complete a financial management course before receiving a discharge.

The course is offered through a number of institutions. It takes about 2 hours to complete, typically costs around $25–50, and can be done over the phone, on the internet, or in person.

We can help you get the course scheduled and ensure the court receives your certificate of completion within the period of time required.

Discharging Debt

If you complete all requirements and no one objects to your discharge, you will receive a Notice of Discharge in the mail, signifying that you are clear of all dischargeable debts accounted for in the bankruptcy process. Depending on the nature of your case, the bankruptcy trustee may continue to work with your estate for some time after you receive your notice.

Some debts (e.g. child support, alimony, certain taxes, and some student loans) are not dischargeable. We can help you figure out what non-dischargeable debts you have and develop a plan for resolving them.

Additionally, bankruptcy does not discharge any debts owed to creditors who did not receive notice of your filing. If such a creditor later learns of your case, they may be able to reopen the case and challenge your discharge. Working with our team at Seattle Consumer Justice can help you avoid these types of issues.