Washington state… home to 23 National Wildlife Refuges, 9 National Forests, 3 National Parks and 2 National Monuments. The birthplace of the Starbucks coffee chain and home to citizens suffocating under a mountain of credit card, medical and other assorted bills.
Rather than taking to the trees to hide from creditors, consider filing a Chapter 7 bankruptcy. A Chapter 7 will liquidate your bills, wiping out a good portion of them, so you’ll be able to enjoy that fresh mountain air again.
Do You Feel like You’re Sinking? File for Bankruptcy, Chapter 7
Instead of spending sleepless nights worrying about how you’re going to pay all of your bills, panicking about the constant barrage of collector’s calls and waiting for the day that your bank account and paycheck will be hit with garnishments, do something about it. A Washington bankruptcy attorney will help you determine whether or not you qualify for bankruptcy, as well as let you know which debts the Chapter 7 will take care of.
Although a Chapter 7 bankruptcy will erase most debts, for example medical bills, old tax liens, credit card bills and other debts, it won’t take care of them all. Some that you’ll be left with include:
- Student loans
- Recently filed tax debts
- New liens
- Child Support
- Money owed as a result of illegal activities
Don’t Just Sit There Drinking a Latte – Check to See if you Qualify
The first step is to find a Washington bankruptcy attorney. Your attorney will know every aspect of bankruptcy law and can check to make sure that you qualify for a Chapter 7 bankruptcy. The income limits, dependant on family size for the state of Washington are as follows:
- Family of 1 - $49,930
- Family of 2 - $63,224
- Family of 3 - $72,524
- Family of 4 - $82,602
- Family bigger than 4 - add $7,500 for each person
The good news is that if your income is within the limits, you can file for a Chapter 7 bankruptcy. If not, you may still qualify under the provision of the Bankruptcy Abuse Prevention and Consumer Protection Act that calls for a means test. A means test is a mathematical process performed by your bankruptcy attorney. It examines your level of debt, and compares it to your income. If your debt level is deemed excessive, you’ll qualify for a Chapter 7. If not, a Chapter 13 bankruptcy may be just the thing for you.
The Basic Bankruptcy Process
Here’s a quick rundown of how the process works. At your first meeting with your Washington bankruptcy attorney, you’ll need to bring the following information:
- Deeds and titles to real estate and vehicles
- A listing of all of your assets and major belongings, including things like furniture and jewelry
- A list of every single one of your debts. Whether they qualify for dismissal or not, you’ll need a list of all creditors. In some cases, you may also need past statements and other information.
- Your last six month’s worth or paystubs.
- Last year’s filed tax return (and your spouse’s tax return)
After it has been determined that you qualify, your attorney will help you with the Chapter 7 petition. You’ll need to take two debtor’s education courses; one before you file and one after. It’s required by law. This program will teach you important information about credit and budgeting to ensure that you’ll be fiscally responsible once the bankruptcy goes through.
After you complete the course, your Chapter 7 petition will be filed with the courts, and a trustee will be appointed to represent all of your debtors. Also, your creditors will no longer be able to contact you. They’ll have to go through your attorney and the trustee. Once everything has been deemed satisfactory and all questions have been answered, a judge will sign the petition and you’ll be officially bankrupt and you, depending on the types of debts that you carried, will be debt free.
Concerned about Your Assets?
The good news is that the Bankruptcy Protection Act allows debtors to keep some assets and property. Some states, including Washington let debtors choose between federal or state exemptions. This allows debtor’s greater customization when claiming which assets will benefit them the most during and after a bankruptcy filing. The exemptions can vary in amount, and may change to reflect economic factors.
Debtors using the state exemptions expect to retain the following assets:
- Home exemption: Your house is exempt up to $125,000 in value.
- Personal property – Up to $3,000 is exempt in physical property as well as:
- $3,5000 worth of clothing and jewelry
- $3,500 worth of books
- 100% keepsakes and family heirlooms
- Office furniture and similar supplies - $10,000
- Farming equipment: $10,000
- Pensions – 100% of the following:
- Federal pension benefits
- Interests in pension or profit sharing plans--Foreign Service employees
- Medal of Honor exemption (special pensions for persons on Army, Navy, Air Force or Coast Guard Medal of Honor roll)
- Veterans Administration benefits (includes pensions, life insurance and disability benefits)
- Interests in pension or profit sharing plans--CIA Employees
- Benefits – 100% of the following:
- Judges retirement benefits
- Federal pension benefits
- Police & Firemen's retirement benefits
- Teacher’s retirement benefits
- State employee’s retirement benefits
- City employee’s retirement benefits
- Disability insurance benefits
- Fraternal Benefit Society benefits
- Unemployment compensation benefits
- Industrial insurance benefits
- Other assistance and exemptions:
- 100% Earnings from work release
- 100% Public assistance grants & payments
- 100% Funds of children placed with child welfare services
- 100% Property of incompetent individuals
Depending on your financial situation, you may qualify for additional exemptions. While you have the option to file without an attorney (called a pro se filing) a bankruptcy lawyer can ensure you are retaining the most of your assets in bankruptcy. Without his or her help, you could run the risk of losing hard earned money.
Talk to a local Washington bankruptcy attorney today. Don’t make your life miserable with a pile of unpaid debt.
Washington Bankruptcy Courts
United States Courthouse
700 Stewart Street, Room 6301
Seattle, Washington 98101-1271
Phone: (206) 370-5320
United States Post Office
904 West Riverside Avenue, Suite 304
Spokane, Washinton 99201-1011
Phone: (509) 458-5300
1717 Pacific Avenue, Suite 2100
Tacoma, Washington 98402-3234
Phone: (253) 882-3900
The Chinook Tower Building
402 East Yakima Avenue, Suite 200
Yakima, Washington 98901-5407
Phone: (509) 576-6100