Seattle | Tacoma | Everett | Mount Vernon | Olympia

Chapter 7 Bankruptcy Attorneys

Experienced WA State bankruptcy lawyers

Is a Chapter 7 bankruptcy the best option for me and my family?

No on intentionally sets out in life to experience great financial hardship and have to choose between paying their rent, putting food on the table, putting gas in their car and paying their creditors.  The Federal and Washington Chapter 7 bankruptcy laws are here for your protection. 

We are Chapter 7 bankruptcy attorneys and WA State debt relief lawyers.  We provide help, information, and legal advice on filing for Washington Chapter 7 bankruptcy debt relief and protection.  If your income and expenses enable you to qualify, it's an option probably worth considering, especially if you have no reasonable chance of turning things around in the near future.

For the majority of our clients, their current financial crisis is not even their fault.  With our up and down economy, our current housing market, and our ongoing unemployment problems many of our Washington state friends and neighbors are hurting. 

Whether through the loss of employment, an unexpected medical crisis, the unscrupulous practices of most credit card companies, or a combination of these and other factors, the Federal and WA State Chapter 7 bankruptcy laws are here to help people get back on their feet and be able to move on with their lives.  

What exactly is a Chapter 7 bankruptcy?

The Chapter 7 bankruptcy laws give honest and hard working folks a way to get a fresh financial start so that they can become productive and contributing members of our economy again.

WA State lawyers in Seattle, Everett, and Tacoma.

A Chapter 7 bankruptcy gives good people a second chance.

Chapter 7 bankruptcy is a legal process under federal law that gives individuals and families a chance to start over.  There are few opportunities in life to truly wipe the slate clean.  If you qualify, however, a Chapter 7 bankruptcy is one of them.  It actually allows you to hit the reset button on many of your debts and bills.

A brief overview of Chapter 7

A Chapter 7 is a liquidation bankruptcy.  Liquidation means talking some property and selling it for cash to pay part of your debts.  Because the point of bankruptcy is to provide you with a meaningful fresh start, you are allowed to keep your basic necessities (as defined by your legal “exemptions”).  In a Chapter 7, the only way creditors get paid is through “property of the estate”, not income.

To succeed in Chapter 7 without being accused of abusing the bankruptcy laws, you have to show your income is too low to make at least partial payments in a Chapter 13 plan.  The bankruptcy law that passed Congress in 2005 set up a formal way to show you are not abusing the system.  If your income is over the average income in Washington, you have to show your expenses are too high to pay your debt through a “means test”.  The means test lets you deduct certain expenses, like  for food and clothes, defined by a budget set out by the IRS, and deduct other real-world expenses such as health insurance and child support.  If your expenses eat up all your income in the means test, there is no presumption that you are abusing the system.

You have to take a credit counseling class before you file.  This class can be taken on line and only lasts about two hours.  You also have to take a second class, called a debtor education class, before your case is over.

Once you file a Chapter 7, a trustee is appointed to administer your case.  The trustee looks over your bankruptcy papers to see if there is any property of the estate to liquidate.  Property of the estate can also include property you’ve transferred out of your name in the past few years, especially if it was to an “insider”.  The trustee is not a judge – final decisions about your case are made by bankruptcy judges.

The one hearing you have to attend is called a meeting of creditors.  Creditors usually don’t show up at this meeting but they might.  The hearing is very informal but it is important and conducted under oath.  You testify to the trustee who asks you follow up questions based on your petition and financial documents you must provide directly to the trustee.  Sometimes the trustee finds assets – or suspects there are assets – and the case is held open a while.  In most cases everything wraps up about three months after you file.

If you are making payments on a car, house or other property, you may want to sign a reaffirmation agreement.  That puts you  back on the hook for the loan but it lets you keep your property.  Because you want the best fresh start possible, you should discuss whether reaffirming any particular debt makes sense with an attorney.

The end result of your case is a discharge – an injunction that wipes out “dischargeable” debt.  Talk to your attorney about what debt cannot be discharged, for example, you cannot discharge student loans, back taxes, child support and criminal fines in most cases.