Chapter 7 Bankruptcy in District Of Columbia

Home of the Washington monument, the Lincoln memorial, the White House, and numerous other political buildings and memorials, Washington DC is also home to a number of residents who have debt. Not just a little debt either. Thousands of residents find themselves unemployed, without the prospects of another job, and mounting bills. Years ago, many people filed for bankruptcy as a result of spending money of frivolous items or an inability to keep track of finances. Today, the struggle is one of mere survival. Those who file for bankruptcy often do so just to keep food on the table.

Get Rid of Debt Now

The good news is, if you qualify, a Chapter 7 bankruptcy can eliminate nearly all of your debts. If you have one or more of the following, you may want to consider filing for bankruptcy, Chapter 7:

• Medical bills
• Old tax liens
• Personal loans
• Vehicle repossession
• Bank or wage garnishments
• House foreclosure
• Judgements

Some debts like school loans, alimony or child support payments, and certain tax debts are non-dischargeable. However, if you are able to get rid of 90% or more of your debt, paying off a couple of bills won’t be as difficult as it once was.

You still can Keep Your Assets

Those who wish to file bankruptcy in the District of Columbia won’t lose everything once they file. On the contrary, the Bankruptcy Reform Act of 2005 allows debtors to keep some assets and physical property such as a home or vehicle. In DC, residents may also choose between federal or district exemptions. This lets filers maximize on what property they are able to keep.

District exemptions include:

• Homestead exemption: Your home is 100% exempt. If you purchased your home less than 1,215 days of filing for bankruptcy the value is limited to $146,450.
• Household items:
• Clothing - $300
• Mechanic’s tools - $200
• Tools of trade - $1,625
• 1 vehicle - $2575
• Other property - $850
• Household furnishings, pets, appliances, and musical instruments – Group limit of $8,625, Per-item limit of $425
• Benefits – includes 100% of the following:
• Retirement benefits (police officers, firefighters and teachers)
• Retirement benefits (judges in D.C. judicial system)
• Uninsured motorist compensation benefits
• Disability insurance benefits
• Group life insurance benefits
• Workers' compensation benefits
• Unemployment compensation benefits
• Federal civil service disability and death benefits
• FEMA benefits exempt from garnishment
• Insurance – includes 100% of the following:
• Any un-matured life insurance contract other than a credit life insurance contract
• Wrongful death award or life insurance payment resulting from death of individual of whom debtor was a dependent
• Proceeds and avails of life insurance policies payable to person other than the insured
• Disability insurance benefits
• Crop insurance proceeds
• Other miscellaneous benefits:
• 100% Annuities payable for service in the General Accounting Office
• 100% Medal of Honor exemption (special pensions for persons on Army, Navy, Air Force or Coast Guard Medal of Honor roll
• 100% Cash or collateral deposit or sinking fund for taxicab
• 100% Cemetery lots held by cemetery associations
• 100% Residential condominium escrow deposits

Other benefits are available. You bankruptcy attorney will help you decide which exemptions to take advantage of.

The Process of Filing for Bankruptcy in Washington DC

Bankruptcy, Chapter 7, is a relatively short process. From the time you walk into your attorney’s office until your receive your discharge, the duration of the bankruptcy lasts around 6 months. In the beginning you will need to meet with you attorney to see if you qualify for bankruptcy. He can determine this by examining your financial status. At your first meeting you should bring the following information with you:

• Last six months of pay stubs
• Your last filed tax return (and that of your spouse’s if applicable)
• A list of your creditors and all debts owed
• Information regarding judgments, garnishments, or repossessions
• A list of your assets

To qualify, you need to fall under the median income level for the District. If you exceed these levels, you still may qualify, however, you will need to pass the means test. This procedure mathematically determines if your debts are excessive enough to qualify for a Chapter 7 bankruptcy, even if your income is higher than the average rate. The income levels, based by family size are as follows:

• 1 individual - $48,822
• 2 individuals - $80,172
• 3 individuals - $80,172
• 4 individuals - $80,172
• Families larger than 4 must add $7,500 per member to the income base

After qualifying you will be required to take two short debtor’s education courses and file them with your petition. Your attorney will file your petition with the bankruptcy court, and within 10 days of filing, you will be sent a “Meeting of Creditors.” The hearing itself is short; lasting only a few minutes, but a trustee who represents your creditors may ask you a few questions. Once your bankruptcy has been approved by the courts (which may take approximately 90 days) you will receive notification by mail of your discharge.  

A Chapter 7 bankruptcy can mean the difference between providing for your family or running from creditors. Why live with the anguish of creditor harassment? Contact your local Washington DC bankruptcy attorney today to find out how you can get rid of your debts, and move on to more enjoyable parts of your life. Your bankruptcy attorney will do the heavy lifting; you just need to supply the information. 

District of Columbia Bankruptcy Court