**UPDATED COVID POST - IT MAY BE TIME TO RE-EXAMINE YOUR CHAPTER 13.
So with all of the economic uncertainty, for people who have been in longstanding Chapter 13 cases, it might be a good time to re-examine your circumstances.
There are a number of reasons why someone might file for a Ch. 13, such as:
I was ineligible for a Ch. 7 at the time.
My house was going into foreclosure.
I was being garnished and I couldn't afford to pay the attorney's fees for a Ch. 7
I was making too much money to qualify for a Ch. 7
There are a number reasons why someone might file for a Ch. 13, but because the Chapter 13 plan lasts for several years (3 or 5 years in most cases), people's circumstances might change.
One option, if your circumstances change, is to convert your case to a Ch. 7 Bankruptcy. The Ch. 7 Bankruptcy usually completes in a few short months. You will not have monthly payments to the Court, and it will discharge most common types of debt.
Converting your Ch. 13 Bankruptcy case to a Ch. 7 Bankruptcy case is a great option to explore if your circumstances have changed.
For example, if you were making good money when you filed the Ch. 13 case, but have since lost hours, or lost your job altogether, you might qualify for a Ch. 7 case.
If you filed for a Ch. 13 case to save your house or your car, and your needs have since changed, a conversion to a Ch. 7 might make a lot of sense. I have been talking to a client today who needed a Ch. 13 for a number of reasons, one of which was in order to keep her car. The original reasons for her Ch. 13 Bankruptcy case have largely resolved themselves and she no longer wants to keep her car, or the car loan, so conversion to a Ch. 7 makes a lot of sense.
A conversion can be a powerful tool, but it is not for everyone. Remember that if you are dealing with long term debt, after the Ch. 7 Bankruptcy case concludes, you will have to address that debt. For loans where there is secured collateral (such as a car or a house) and there are still outstanding arrears on the loan, you will have to address those arrears soon after the Ch. 7 case concludes. If you had monthly payments that were reduced as a result of your Ch. 13 plan, you can expect those payments to go back to normal.
Despite the shortcomings of conversion to a Ch. 7, this solution can be a great relief to a lot of people and it can help many people start their post-Bankruptcy life off sooner than if they had completed their Ch. 13 plan. Only an experienced Bankruptcy attorney can advise you as to whether or not a conversion from a Ch. 13 to a Ch. 7 makes sense for your circumstances, but it is worth looking at as a potential option.
**UPDATED COVID POST - GARNISHMENT AND STATUTE OF LIMITATIONS FOR OLD DEBTS
Lately, we have had a lot of clients who have receiving wage garnishments for very old debts. Many of them thought that their debts had passed the statute of limitations and were shocked to see their pay check be hit by a garnishment.
Statute of Limitations can be a bit confusing. First there are multiple statutes of limitations based upon the nature of the transaction. In Washington State, the most applicable statute of limitations for debt is six years, because most financial transactions involve a written contract.
Even within the six-year statute of limitations period there are some complexities. For example, on a credit card, the six-year statute of limitations applies from the last time that you made a charge (which makes sense) or the last time you made a payment (which makes no sense). So lets say that you got a credit card in 2010. You charged on it for a couple of years and stopped making charges in 2012, but you continued to make monthly minimum payments until 2015. Most people would assume that since they stopped charging on the card in 2012, and we are now in 2020, that eight years have elapsed, and that the debt is no longer collectible. Unfortunately, those payments up through 2015, keep the debt within the six-year statute of limitations period and the debt is one that can be litigated. It might feel like you are being punished for doing the right thing (i.e. making payments), but unfortunately that is the state of the law.
Things get even more complicated when you get sued and a judgment is entered against you. Remember, that in order for a creditor to garnish your wages, they must have previously sued you and gotten a judgment. When a judgment is rendered against you in court, it is good for 10 years and renewable for another 10 years. Because the typical statute of limitations is six-years, most people are very confused to find out that they are being garnished over a very old debt. Lets take the previous example…if you stopped paying in 2012, but the creditor sued you and got a judgment against you in 2014, you might think that you are out of the woods because six years has elapsed, but the truth is that the judgment would be good (and collectible) until 2024, and renewable for a further 10 years.
For that reason it is not unusual for very old debt to rear its ugly head and chase you down many years later. Many clients are really confused about why a creditor took so long to come after them. The reason lies a bit in the amount of the original judgment. When a civil judgment is rendered against you the interest rate is 12%, but if the original amount is relatively low, there is not a lot of incentive to start collection activity. On the other hand, if they wait a few years, that small figure will balloon up and then coming after you makes all kinds of sense.
So just because a debt is old, doesn't mean that it is forgotten. Be smart about your old debts and don't assume that they will never haunt you again, just because they don't show up on your credit report any more, or because you stopped getting calls & letters from them.
**UPDATED COVID POST - COLLECTION MORATORIUM
So we've been having some people reach out to us about the confusion related to the temporary Covid-19 moratorium on collections.
While it is true that many creditors are offering a welcomed short-term forbearance on regular payments, each program is a little different. Some offer 0% interest, while others just suspend payments for a short period of time.
This is by no means universal, and it may not be available to people who were already in default prior to the forbearance programs.
Because many civil courts have reduced services, or are placing restrictions on certain civil actions, this has led some people to erroneously believe that their debts are either being written off, or are not collectible in the future.
While you may be experiencing some temporary relief from collection activity such as evictions, foreclosures, or garnishments, this is not going to last forever, and we have already being seeing a spike in garnishment activity by collection agencies.
A good rule of thumb is to regularly pull your credit report and see what is appearing. Since not everything shows up on a credit report, you should try to keep a good record of any collection agencies that send you correspondence in the mail. Sometimes multiple collection agencies are working the same account, but it is a good idea to keep at least one current letter from each one to show your attorney.
By all means, you should take advantage of any relief from collection, but without a written statement from the creditor forgiving the loan, or a Bankruptcy discharge, you should consider all of these debts active and collectible
**UPDATED COVID POST - STUDENT LOANS
So there has been a lot of activity over the past few days in Washington DC attempting to bring relief for the American people.
On the issue of student loans, according to Forbes, the President signed an executive order suspending student loan payments through the end of the year (December 31, 2020), and making your existing student loans 0% interest for that period of time.
While this seems like great news for those saddled with student loan debt there are some caveats.
First, there is some legal question about the extent to which executive orders are legal and unless Congress comes up with an interim solution that the President is willing to sign, there is a very good chance that this executive order will be challenged in the courts.
That means that you need to go to your student loan provider directly and verify any changes to your current repayment plan. Whatever you do, make sure that you do not go into default.
Your student loan provider will have the most up to date information on how they are affected by the actions in Congress and from the President. Usually they have a web portal with good information on your account and notifications on how they plan to treat your repayment. You should plan on checking that web site at least monthly.
For those of you lucky enough to have a steady job, consider paying during the 0% interest phase as each dollar paid will be directly applied to interest.
If you have lost work, then take this opportunity to reach out to your student loan provider to see what "income based repayment plans" they have available.
Things in this area are changing rapidly so the worst thing that you can do is rely upon old information. Stay on top of the latest developments by going directly to your student loan provider because notwithstanding what might be reported in the news, your loan provider is the best source of information on your loan.
Due to the COVID-19 outbreak, we are offering Facetime or Zoom options instead of a live consultation. We still offer live consultations for anyone who wants one.
Stop Garnishments · Stop Creditor Calls · Stop Foreclosure
Unexpected job loss? Increasing medical bills? Are you falling behind on your mortgage payments but want to keep your home? Using your credit cards to buy groceries? We understand the stress that financial hardships can cause to you, and the confusion about choosing the right solution. We have helped thousands of clients decide on an affordable solution that works. We allow clients to get on a payment plan that works for them. We have helped all sorts of people across Western Washington get out of debt, save their homes, reinstate their driver's license, fix tax problems, and get on track to a fresh start.
Bellevue Bankruptcy Attorneys Who Get Results Quickly
Nothing makes us happier than to hear from our clients years later and seeing how their lives have improved after we were able to help them. Most people who work in this field never plan on developing a long term relationship with Bankruptcy clients. On the other hand, we cherish the fact that our clients are completely satisfied with their outcome and are willing to recommend our services to their friends, family members and co-workers.
We make the process as easy as possible
While filing for Bankruptcy has become more complicated since we started over twenty years ago, through the use of technology we have been able to make your experience much easier. First, we no longer use large support staff. An attorney is preparing your paperwork and working directly with you. We do not put a buffer between us and you. Second, we do a lot of the leg work in preparation for your case. In the old days, clients had to do most of the work in tracking down who they owe money to, the existence of lawsuits, former addresses, and employment information. Today, we gather much of that information and streamline the process for you to minimize your stress level. There are still some things that you must do, but we lay all of that out in a clear manner so you are never confused about the process.
Finding out your options will cost you no money
Your consultation with our office is always free. The only thing that you have to lose is a little bit of time. We will evaluate your situation and give you an honest assessment of your options, even if that means that we might not recommend our services. We know that you will appreciate our candor and honesty, and we never want you to feel pressured to commit to a course of action. We want you to have all the facts and the time to make a reasoned decision that works best for you and your family.
Are you considering bankruptcy?
Call us for a quick and free consultation. Our office(s) are in King County, located in the heart of downtown Bellevue and SeaTac. We have plenty of free parking, and are located conveniently near Seattle, Lynnwood, Kent, Federal Way, and Renton.
Unfortunately, there are costs associated with any legal process, however we charge a reasonable flat fee for our services. We offer payment options that are flexible to your budget, and while we are not necessarily the cheapest law firm, we offer rates that are very affordable. We never overcharge you, but we charge a fair rate based upon our experience, and the quality of service that we provide you.
Go with a firm that you can trust
In any attorney-client relationship you need to go with an attorney that you can trust. Don't feel pressured to sign up with any law firm if you do not feel absolutely comfortable with who you are working with. We are local attorneys. We do not split our fees with out-of-state companies that farm you as a “lead”. We don't send your file to a room full of paralegals to do the hard work and then just meet with you briefly to get your signatures. Beware of mass mill operations especially out of state law firms that over promise and under deliver. We have been in practice long enough to see those law firms come and go. You are not just a number to us. If you place your trust in us, we will work to make sure that this process accomplishes your goals.
Situations beyond my personal control lead me to contact Hallaq Law, Brian and Diem where amazing, during the entire process, as well as after paperwork was filed. They continue to offer support after the process, which shows their dedication to their clients. I would strongly recommend Hallaq Law to anyone and everyone who is going through tough times. They explained everything in great detail with me from the initial contact over the phone, through all our in person meetings, as well as during the court proceedings. Could not be happier with the results and could not have asked for a better team of attorneys. Thank you both so much, and I can't express how grateful I am to have had your help.
AMAZING! Incredible! Unsure if I wanted to file; I called several law firms. The MOMENT I spoke to Mr. Hallaq, he became my attorney. Any question I had was answered honestly! The response was always prompt. I can only say great things about the Hallaqs… Accommodating, kind, honest, responsive, gets the job done and absolutely had my best interest at heart. I am extremely thankful for your service! THANK YOU!!! - C. Joiner
I contacted Brian to discuss my options. He was very kind and met with me that day to lay out my options for me. I decided to hire him and proceed with filing. He even stayed late with me to get it taken care of that day. Our meeting of the creditors has been pushed back due to current world events but Brain and Diem have been very responsive and helpful with all my questions (even on the weekend. Sorry guys). I would highly recommend them to anyone considering this hard decision. Brian is very knowledgeable, caring and understanding.