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Federal Way Bankruptcy Lawyer | Law Offices of Jason S. Newcombe | Chapter 7 | chapter 13
Bankruptcy attorneys serving Federal Way, Washington. All Chapter 7 and Chapter 13 cases handled. Call now to see if you qualify. (855) 923-3283
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Bankruptcy in Federal Way, Washington.
Federal Way, Washington is a city near in the southern border of King County, Washington. Incorporated in 1990, Federal Way is the home to over 90,000 residences, many of them unfortunately financially strapped in these hard economic times. Many Federal Way residences are hired our law firm to file for bankruptcy to discharge all of a significant portion of their debts they can no longer afford to pay. For many people in Federal Way, filing for bankruptcy is their best financial options to get a fresh financial start.
The Purpose of Bankruptcy
Bankruptcy is a legal right afford under both state and federal law to either discharge (wipe out) qualify unsecured debt and in some cases reorganize unsecured and secured debt into affordable monthly payments.
Unsecured debts are debts that have no collateral (property) attached to them to be turned over to the creditor if the debtor defaults on the payments. If a debt is secured, there is collateral attached to the debt. The most common secured debts are mortgages and car loans.
Chapter 7 Bankruptcy in Federal Way
Filing Chapter 7 Bankruptcy in Federal Way provides both renters and homeowners with a 100% discharge of their unsecured non-priority debts, with the lone exception usually being student loans. This means that credit cards, payday loans, medical bills, unpaid utilities, cell phone bills, broken apartment leases, debts from car repossessions, uninsured motorist debts from car accidents (if they did not originate from a DUI) are all wiped out (discharged) in Chapter 7 Bankruptcy. Also, if your income tax debt, state and federal, is over 3 tax years old, it may be dischargeable by filing for Chapter 7 Bankruptcy. About 80% of a consumer bankruptcy filings are Chapter 7 Bankruptcies.
Chapter 13 Bankruptcy in Federal Way
Chapter 13 Bankruptcy is another legal method to discharge all or a significant portion of unsecured debts. There are many reasons why a person will file a Chapter 13 Bankruptcy instead of a Chapter 7 Bankruptcy. The following are three common reasons why someone would file a Chapter 13 Bankruptcy:
1. The debtor is an above median income debtor who does not pass the “Means Test.” A means test is applied to all consumer bankruptcy cases to determine if filing for Chapter 7 Bankruptcy would or would not create a “presumption of abuse” to charge all qualify debts. The Means Test requires a detailed analysis of the debtor’s last 6 months of total household income, excluding any security income. Other factor such as daycare, court ordered child support and/or spousal maintenance, and higher than average housing costs may allow an above median income debtor pass the Means test for Chapter 7 Bankruptcy eligibility.
2. The debtor has filed for Chapter 7 Bankruptcy Within the Past 8 Years. If a debtors has filed a Chapter 7 Bankruptcy in the past 8 years and received a discharge of his or her debts, the debtor is only eligible to file a Chapter 13 Bankruptcy and must at least repay a small portion of his or her unsecured debts, provided the debtor filed a Chapter 7 Bankruptcy at least 4 years ago.
3. The Debtor is a Home Owner who wishes to Strip and Wipe Out A Second Mortgage. If a debtor can prove that the value of his or her home is worth less the current balance on his or her first mortgage no that the entire second mortgage is unsecured, the debtor can strip and wipe out all debt from the second mortgage at the end of a Chapter 13 Plan. This cannot be accomplished by filing Chapter 7 Bankruptcy.
4. The Debtor Wants to Stop a Foreclosure Sale and Repay the Mortgage. A Debtor can stop a scheduled foreclosure sale and repay the mortgage arrears (the amount behind on the mortgage) for up to 60 months if he or she can also afford to resume the regular monthly mortgage payment. This can be done for both first and second mortgage. The Chapter 13 Bankruptcy plan affords the debtor a repayment plan that a Chapter 7 Bankruptcy does not. A Chapter 13 Plan can also be used to stop a car repossession, eliminate the loan arrears and restructure the car loan for a period up to 5 years, thereby also lowering the car payment in many cases.
Learn More About How to Wipe Out All Or Much Your Debts and Get A Fresh Financial Start!
Call (855) 923-3283 to Speak with One of Our Federal Way Bankruptcy Lawyers Today.
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