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How to File for Washington State Bankruptcy

If you are only paying the minimum payments on your bills and can't foresee yourself getting out of debt within the next five years, then filing for a Washington State bankruptcy may be your best option.

The process for filing for bankruptcy in Washington State can be complex. Although it helps to have an understanding of bankruptcy basics, you will probably want to seek out the expertise of Washington bankruptcy lawyers. Whether you live in Seattle, Spokane or Tacoma, you can use to find a Washington bankruptcy attorney in your area.

Types of Washington State Bankruptcy

There are two types of consumer bankruptcy in Washington State.

The first is known as Chapter 7. Chapter 7 bankruptcy allows the debtor to liquidate his debts. A Washington State bankruptcy court appoints a trustee who then seizes all of a debtor's non-exempt property. Non-exempt property includes items such as televisions, jewelry worth more than a certain amount and computers. This property is then sold off to pay back creditors, or the various people and entities owed money. A debtor is allowed to keep what is known as exempt property. Exempt property includes alimony, child support, health aids and tools of your trade up to a certain monetary limit.

The other type of consumer bankruptcy in Washington State is known as Chapter 13. Chapter 13 bankruptcy allows the debtor to reorganize his debt and pay back creditors over an agreed upon amount of time.

Generally speaking, Chapter 7 bankruptcy is reserved for those individuals who don't earn enough money to pay back their debts within about five years. Chapter 13 bankruptcy, on the other hand, is reserved for those who do have some amount of disposable income, which they can apply to their reorganized debt to pay back their creditors.

Filing for Chapter 7 Bankruptcy in Washington State

When an individual decides to file for Chapter 7 bankruptcy in Washington, he has to make sure he meets the legal requirements. To be eligible to file Chapter 7, you must pass what is known as a means test. If your income is below the median income for families in Washington State, you are eligible for Chapter 7 under the means test.

You will then need to file an official petition with the Washington State bankruptcy court along with a document known as the Statement of Financial Affairs. This document contains detailed accounts of all your debts and finances.

Next, there will be what is known as a 341 hearing, in which a court-appointed trustee asks you questions pertaining to your debts. Your creditors also will be present and have the opportunity to ask you questions. After this hearing, assuming there are no objections from the creditors, the trustee will seize all non-exempt property and sell it.

You will be allowed to keep all exempt property. There are two types of exemptions you may opt for in Washington State. One is the list of federal exemptions, while the other is the list of Washington State bankruptcy exemptions. Which one is best for you will depend on the type of property you own and what you think is best for you and your family.

Filing for Chapter 13 Bankruptcy in Washington State

Filing for Chapter 13 bankruptcy allows you to pay off your debts in a span of three to five years. To file for Chapter 13, you must have some amount of disposable income (or money left over each month after paying all of your expenses) to use to pay off your creditors. If you do not want to lose your home due to a default on your mortgage, Chapter 13 may be a good option for you.

When you file the bankruptcy petition with the Washington State bankruptcy court, you will also need to include a proposed payment plan that extends for three to five years. This plan should outline how you will pay all priority claims in full. Priority claims include such debts as child support, unpaid wages and taxes.

A court-appointed trustee will review the plan and then pass it around to your creditors for approval. If approved, you will keep all your assets as long as you make good on your payments as outlined in the plan. If you successfully make all your payments on time, any remaining debts will be discharged at the completion of the plan.

Hiring a Washington Bankruptcy Lawyer

Whether you are filing for Chapter 7 or Chapter 13, you will most likely want to rely on the expertise of a Washington State bankruptcy lawyer. Set up consultations with a number of attorneys prior to making a hiring decision, and use these meetings as a way to screen each one.

Ask the lawyers about their experience and their fee arrangements. Discuss your case with the bankruptcy attorney and ask him about your options. He should be able to assess your situation and explain the consequences of each option available to you.

Once you have taken the time to meet with attorneys, choose the one whom you trust the most and with whom you feel most comfortable.