Chapter 7 Attorney in Edmonds, WA

 

Chapter 7

A Chapter 7 bankruptcy has many names. It is at times referred to as "straight bankruptcy" and this is the type of case that likely comes to mind when most people think of bankruptcy.

It is designed to help people get a fresh start, to start over and give individual consumers and families a chance at a new financial beginning. The great thing about a Chapter 7 is it wipes out your unsecured debts, that is, it wipes out your obligation to pay certain debts such as credit cards and medical bills. By filing a Chapter 7 all collection activities against you stop as well as harassment from your creditors or their legal actions against you.

Certain debts however are not wiped out in bankruptcy. This includes, for example, student loans, traffic fines, child support and some taxes. These debts will survive a Chapter 7 bankruptcy.

Another name for Chapter 7 bankruptcy is liquidation. This is because when you file a Chapter 7 the court appointed trustee in your case temporarily owns all of your property until it is determined whether your assets are or are not exempt from liquidation. If you own too much property the trustee can liquidate or sell the property to raise money for payments to your creditors. However, if you have an experienced bankruptcy attorney presenting you, in most cases you can keep all of your property. This does vary with the facts of each client's case, but an experienced bankruptcy attorney can protect your property using exemptions of the bankruptcy law.

We use Chapter 7 bankruptcy when a client has a great deal of unsecured debts such as medical bills or credit cards and their income is low and their property is minimal. If an individual earns more than a certain amount, as set forth in certain census bureau statistics, the Court may require that they file a Chapter 13 bankruptcy repayment plan rather than a Chapter 7 as the Court and Congress feel they can afford to repay at least a portion of their debts. This also may apply if you own a great deal of property, like a home with a large sum of equity. The Court, Congress and even the State of Washington Legislature feel that you should pay back a certain portion or percentage of your debts. That percentage will vary depending on your income, the size of your family, and the amount of non-exempt property you own among other factors.

As you can see, a bankruptcy filing is complicated and I urge you to seek an experienced attorney who regularly practices in the U.S. Bankruptcy Courts for help with your current financial situation.

To determine which Chapter of bankruptcy is most appropriate for you will require an involved investigation into your financial affairs, including income (current and several prior years), the members of your household and the property you own now and over the past 10 years. The new bankruptcy laws have made filing even more complicated so I urge you to only seek counsel from attorneys concentrating in the practice of bankruptcy law.

Any bankruptcy filing will stop creditor harassment and stop collection actions, but you must be sure you are filing under the correct Chapter and that all options have been explained to you.

 

Don't file chapter 7 until you've considered chapter 13 and all the benefits that it can give you.

Call us for a free consultation at (425) 771-8230 to find out more about our practice areas.