When someone becomes overwhelmed by debt, they may consider filing for bankruptcy as a way to regain control of their finances. Because bankruptcy is covered by federal law, the filing process is the same everywhere. However, certain aspects are determined by district bankruptcy courts and state law. Read on to find out how a Cheap Bankruptcy Lawyer In Puyallup Wa can provide state-specific guidance.
Bankruptcy Types
Before filing for bankruptcy, a debtor must decide whether to file Chapter 7 or Chapter 13, as the type determines the process and paperwork required. Chapter 7 involves the liquidation of assets to pay creditors, while Chapter 13 forms a partial or complete repayment plan. In all jurisdictions, and with both bankruptcy types, filers must complete credit counseling to gain a debt discharge.
The Means Test for Chapter 7
To be eligible for Chapter 7, filers must pass a means test that involves comparing their income to the median for a household of the same size. If the person’s income is lower than the state median, they can file for Chapter 7 bankruptcy. If not, they can still qualify for Chapter 13.
Chapter 7 Bankruptcy Exemptions
If a person files for Chapter 7, exemption rules determine which property they can keep. In some areas, only state exemptions are available, but Washington’s laws allow filers to choose state or federal exemptions for both bankruptcy types. For instance, a person may be able to keep equity in their car, pension, many . belongings, or home. If a type of property isn’t exempt, the court-appointed trustee is allowed to sell it to pay unsecured debts.
Exemptions for Chapter 13 Cases
In Chapter 13 bankruptcies, exemption rules determine how much a debtor will have to pay to his or her unsecured creditors via a repayment plan. Under Federal rules, debtors typically keep all their property, but exemption rules are used to determine whether the court will accept the repayment plan.
Processes and Paperwork
When the client is ready to file, they and their Cheap Bankruptcy Lawyer In Puyallup Wa will complete a petition and file it with the appropriate bankruptcy court. The petition should include financial documentation for the Chapter 7 means test if applicable. If the client files under Chapter 13, they must provide a repayment plan to the court. As the case progresses, the client must complete personal finance education to receive a debt discharge.
