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Chapter 7 Bankruptcy

chapter 7 bankruptcy

Debt can accumulate quickly, and before you know it, you are beyond any ability to manage it. Debt impacts your credit history as much as it does your quality of life. Creditors and third-party collection agencies can cause serious stress. Fortunately, even when you think a solution does not exist to your debt problem, there very well may be one. Filing for Chapter 7 bankruptcy in Washington State is the quickest, easiest, and most affordable way to discharge debts and get a clean slate.

At Hallaq Law, our Chapter 7 bankruptcy lawyer in Pierce, King, Snohomish county will review your overall finances, debt, and life circumstances to help you determine if filing for bankruptcy is right for you. Then, we will guide you through the process so you never have to worry about deadlines or paperwork. Contact our bankruptcy attorney today at (206) 751-6643 to schedule a Free initial bankruptcy consulation. 

What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy is a type of bankruptcy that can benefit individuals, partnerships, or corporations. If you or your business have qualifying assets, they are liquidated to pay off debt. The court appoints a Trustee to review your assets and determine if any are worth liquidating. Each state allows for a certain amount of assets to be exempted, which means those assets are shielded from liquidation. You should consult with a bankruptcy attorney in Washington State to make sure you know what applies in your case.

Even though Chapter 7 bankruptcies are a means to liquidate assets and pay off debts, these types of bankruptcies are often referred to as “no assets.” Most people who apply for bankruptcy under Chapter 7 do not have assets that would qualify for liquidation. Nonetheless, debts are still discharged, so you get a fresh start. 

Chapter 7 bankruptcy is very common––much more common than people know. That said, there are a few caveats to keep in mind. First, not all debts are eligible for bankruptcy. Second, not all individuals, partnerships, or corporations will qualify. These caveats are reasons why you should consult with a bankruptcy lawyer to make sure Chapter 7 is right for you.

This is the most common way to get a fresh start from overwhelming debt with a minimum investment of time and money.  Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under chapter 7. The purpose of filing a chapter 7 case is to obtain a discharge of the debts existing as of the date you file a case. However, not all debts are dischargeable.

A Chapter 7 Bankruptcy:

  • Can eliminate credit card debt.
  • Can eliminate medical bills.
  • Can eliminate old apartment bills/evictions costs.
  • Can help you get a fresh financial start in about three months.
  • Can help you qualify for a car.
  • Can help you qualify for an apartment.
  • Can help you move forward with your life.
  • Can stop wage garnishments.
  • Can stop harassing bill collectors.

Eligibility for Chapter 7 Bankruptcy

Qualifying for Chapter 7 bankruptcy typically means being able to pass what is known as the Means Test. The Means Test determines whether you can pay off your debts. To pass the Means Test, your income must not exceed the income limits set by your state. 

State income limits vary because the cost of living differs from state to state. Your state's income limit depends on the number of earners and people in the household.

For example, in Alabama, the income limit for

  • One earner is $52,138
  • Two people is $63,401
  • Three people is $70,250
  • Four people is $85,687
  • Each person in excess of four is an additional $9,000

In California, however, the income limits are set much higher. California's income limit for

  • One earner is $70,952
  • Two people is $92,321
  • Three people is $100,744
  • Four people is $120,898
  • Each person in excess of four is an additional $9,000

The income numbers for the Means Test are updated every six months.

Reasons You Should File

Even though you can file for Chapter 7 bankruptcy, it does not mean you should. You should consider Chapter 7 bankruptcy if

  • You need to stop a wage garnishment
  • You want a fresh start
  • You want a reasonably fast process to discharge debts
  • You have a lot of debt
  • You have a lot of debt, but you also have income or assets creditors can take
  • You cannot keep up with making ends meet at the end of the month
  • You will not be able to pay off your debt within five years
  • You do not want a debt repayment plan

Reasons Not to File

On the other hand, you may not want to file for bankruptcy in Washington State if

  • You are not presently working
  • You have no assets a creditor can garnish

Speaking to a Chapter 7 bankruptcy attorney can provide you the insight you need to make informed decisions about how to address your debt.

How Much Does It Cost to File for Chapter 7 Bankruptcy in Washington State?

The cost to file Chapter 7 bankruptcy in Washington State depends on whether you file on your own or retain a bankruptcy attorney. Filing fees must be paid, and they are mandated by the U.S. Bankruptcy Court. The total filing fees for Chapter 7 will include

  • Filing fee 
  • Credit counseling fees

These fees are subject to change periodically. For Chapter 7, the sum of all fees is just over $400.

Retaining legal representation adds to the cost. Much of it depends on the geographic location, experience, skill, and total sum of the services provided. 

Due Diligence Checklist for Chapter 7 Bankruptcy

There are quite a few documents you need when you file for Chapter 7 bankruptcy in Washington State. At Hallaq Law, we gather a majority of the documents for our clients.  Unlike other Bankruptcy firms who have lengthy questionnaires and a long checklist of documents that clients have to provide, the Bankruptcy attorneys at Hallaq Law does most of the work for you.

What Happens When I File for Chapter 7 Bankruptcy in Washington State?

After you file for bankruptcy, three important and immediate things happen:

  1. You are given a case number; 
  2. An automatic stay takes effect, which means creditors can no longer garnish wages or take collection action against you; and 
  3. A bankruptcy trustee is assigned to your case––the trustee reviews all documents, verifies information, and oversees the meeting of creditors.

Oftentimes once a Chapter 7 bankruptcy case is filed, you will see your credit score affected by it, and for some of our clients, the credit scores increases slightly.

Contact a Bankruptcy Lawyer in Pierce, King, or Snohomish County Today

At Hallaq Law, we know how debt can impact an individual, a family, or a business. If you have difficulty paying bills because of the debt you or your company have accumulated, speak to a Bankruptcy attorney  today by filling out our online form or calling/texting us at (206) 751-6643. We will schedule a Free initial bankruptcy consultation so that you get the answers you need to all your financial questions.

We are happy to discuss your Chapter 7 options!

Contact Us Today

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.

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Phone: 206-423-9592
Phone: 206-751-6643

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