Seattle Bankruptcy Lawyers Help Debt-Ridden WA Residents File

Filing Bankruptcy: Protecting the Assets of Washington State Consumers

Washington State Bankruptcy | Meet with an Experienced Seattle Attorney

The first step you should take in filing for WA bankruptcy is to meet with an Seattle bankruptcy attorney.  The reason is that you may need to file for bankruptcy protection, but that’s not necessarily the only way to proceed.  If you meet with a professional who understands how to help people work their way through these problems, you’ll soon understand that all hope is not lost.

During this meeting, you need to bring every piece of information that relates to your financial situation, including documentation regarding your income, your assets, and all of your bills and long-term liabilities.  It could result that all you need is help negotiating to eliminate debts, and it’s always worth the effort to analyze this possibility.

However, if a bankruptcy filing is necessary, you need to keep in mind that you would only be one of millions of people in the United States who take this path every year.  Below is how a typical bankruptcy procedure works.

Decide on the Appropriate Chapter for Filing Bankruptcy in WA

For consumers, there are different choices in terms of bankruptcy petitions.  Which one would work best for your situation will depend on the particulars of your finances, your assets on-hand and your current income.  This is an important choice, as if you begin the process of filing under one chapter of the Bankruptcy Code and then move to change it, you could waste time and money.  Below are the two most common choices for bankruptcy petitions for consumers.

Chapter 7 Bankruptcy in Washington State

A bankruptcy filing under Chapter 7 of the Bankruptcy Code is commonly known as a ‘liquidation’ bankruptcy, because what basically happens is that the petitioner lists all of his or her assets and sells them off minus the exemption levels in order to at least partially satisfy the creditors involved.

Exemptions are levels of value assigned to certain items that cannot be surpassed when the liquidation occurs, as the intent behind bankruptcy law is to make sure that the petitioner is not left in a situation where he or she is completely destitute.  For example, in Washington, the homestead exemption is $125,000.  This means that when all assets are sold, the home cannot be sold if it’s worth less than $125,000.  If it’s worth more, that value will be added to your petition in your favor.

When the initial petition is filed with the US Bankruptcy Court, which includes all assets, liabilities and exemptions, it is sent to the Bankruptcy Trustee and distributed to the creditors named on the petition.  The trustee sets a date for a hearing in which the petitioner and the creditors meet and where creditors can object to items on that petition.

Additionally, when the trustee receives the petition, he or she issues an Automatic Stay that’s sent to the creditors, which means that as of that date, the creditors can no longer continue collection attempts on the person filing the petition.

After the creditors’ meeting and assuming the petition is valid, the bankruptcy court will usually issue a Discharge of Debt a few weeks afterwards, thereby collecting the non-exempt assets, paying the creditors at least a portion of what they’re owed and discharging the debts altogether, which means they are wiped clean.

Chapter 13 Bankruptcy in WA

The Chapter 13 filing is generally known as the ‘wage earner’s’ bankruptcy.  The reason is that instead of filing for liquidation-style protection, the petitioner instead files a plan with the bankruptcy trustee that proposes a certain amount of payments every month for a period of between three and five years.

When the bankruptcy trustee receives the plan, he or she distributes it to the creditors named and calls for a creditors’ meeting to object to, amend or accept the petition as-is.  If the plan is confirmed, the bankruptcy trustee takes the amount to be paid to creditors every month and distributes it.  When the plan is complete, any remaining unsecured debts are discharged and the petitioner starts over.

How to Proceed | Retain a Seattle Bankruptcy Lawyer Today

If you are facing financial difficulties, you need to act now to move beyond them, as they will not simply go away by ignoring them.  You need to analyze your options, and you need the help of an experienced seattle bankruptcy lawyer to help you make the proper choice.  Contact the Wasington State bankruptcy attorneys at  Phillips Webster today to schedule an initial consultation.