Is Bankruptcy Right For You In Seattle?
June 16th, 2010Some think of rain and Starbucks when Seattle comes to mind, but many residents think about the piles of debt they have amassed to live in the “Emerald City”.
If you are facing more debt than you could pay off in a five-year period, it may be time to explore the option of bankruptcy.
If you are thinking about filing bankruptcy, it may help to have a clear understanding of what it is. Bankruptcy is defined as, “a legally declared inability or impairment of ability of an individual or organization to pay its creditors.” It is legal insolvency. Bankruptcy is a legal surrender of your remaining assets into the hands of your creditors.
In the United States, bankruptcy is placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8, Clause 4), which allows Congress to enact “uniform laws on the subject of bankruptcies throughout the United States.” The Congress has enacted statute law governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. Federal law is amplified by state law in some places where Federal law fails to speak or expressly defers to state law.
Bankruptcy cases are always filed in United States Bankruptcy Court, which is an adjunct to the U.S. District Courts. However, bankruptcy cases, particularly with respect to the validity of exemptions and claims, are often dependent upon law. Because of this, it is usually not possible to generalize bankruptcy law across state lines.
For this reason, it is important for you to know the laws regarding bankruptcy of the state that you live in. If you plan on filing bankruptcy in Seattle, you need to know the laws as they relate to you in filing a Washington bankruptcy. You will probably need the help of a Seattle bankruptcy attorney who can help you understand how Washington bankruptcy laws will affect your case.
Chapter 7 is the type of personal bankruptcy that is filed most often in Seattle. In Chapter 7, your non-exempt property is liquidated (sold) by a bankruptcy trustee who takes over your property. The proceeds from the sale of your property are then distributed among your unsecured creditors. The benefit for you is that some of your debt is erased.
Chapter 13 is a form of personal bankruptcy that is also often filed in Seattle. With Chapter 13, you get to retain possession and ownership of your assets. Your part is to give some of your future income over a three to five year period to pay back your secured debt.
Chapter 7 is “liquidation” or “straight” bankruptcy. The vast majority of people want to file Chapter 7 because it is possible to have all of your unsecured debts discharged (erased). Unsecured debts are things like medical bills and credit cards.
Another thing that makes Chapter 7 so popular is that even secured debts like your auto and home may be exempt from liquidation. With Chapter 7, nothing is liquidated if you do not have any non-exempt property. This is referred to as a non-asset bankruptcy.
Chapter 13 is referred to as “reorganization”, “debt adjustment” or “rehabilitation” bankruptcy. It is not like Chapter 7. Chapter 13 is a pay back plan called a Chapter 13 plan. It is carried out under Court supervision for three to five years. During this time at least some of your secured debt is paid back.
Chapter 7 is the route that you probably would like to take. Chapter 13, however, may be the best way for you. Chapter 13 is probably the better option if you want to keep property that is not exempt. It is your only way if you are not eligible to file Chapter 7 in Seattle.
You are probably eligible to file Chapter 7 if your income is below the median for a family your size in Washington. If it is over the median you may not be able to file Chapter 7 in Seattle, although in some instances you still can.
Washington state allows you to use either state or federal exemptions when you file Chapter 7. You will have to choose which set of exemptions that you want to use.
So, how do you know if you are eligible to file Chapter 7 in Washington? If you can file Chapter 7, which set of exemptions is best for your situation? How can you tell whether Chapter 7 or Chapter 13 is right for you to file, if you are eligible to file either one?
A Seattle bankruptcy attorney can answer these and any other questions that you may have regarding bankruptcy. The thing to make sure of is that you enlist a Seattle bankruptcy lawyer to advise you.
The reason for this is because Seattle bankruptcy attorneys specialize in the complex area of bankruptcy law. Seattle bankruptcy lawyers work with bankruptcy cases, daily. They are informed about the latest changes and updates to Washington bankruptcy law.
Bankruptcy Home is the website where you can find a Seattle bankruptcy attorney to represent you. Get some information about a Seattle bankruptcy lawyer who offer you a free evaluation of your financial situation, and help you make the right bankruptcy decisions.












