A good Kent bankruptcy lawyer knows how to properly determine what bankruptcy chapter is right for you and your family. Our bankruptcy attorneys will help you determine your eligibility for bankruptcy protection in order ensure that you and your family obtain the maximum amount of financial relief allowed under the Bankruptcy Code. The simple truth is that many factors affect your eligibility to file for bankruptcy in Washington State, whether you are seeking to file a Chapter 7 or a Chapter 13 bankruptcy.
Eligibility for a Chapter 7 is determined by a means test that measures your income and expenses to see if there is any room in your budget to pay unsecured debt. If you are not eligible for a Chapter 7, the vast majority of people can still file a Chapter 13. The few people who cannot file Chapter 7 but have too much debt (approximately $1,184,000 in secured debt or $394,000 in unsecured debt) have to file a Chapter 11. A Chapter 11 is usually reserved for businesses and is very complicated.
The best way to determine what type of bankruptcy chapter might be best for you and your family is to speak with an experienced Kent bankruptcy lawyer. Our attorneys are very familiar with the eligibility requirements of the Washington State and Federal bankruptcy laws. The bankruptcy laws are complex, and it's important to ensure that your bankruptcy is filed under the right chapter.
If you live in Kent, Washington and have questions about your ability to seek bankruptcy protection, we encourage you to call our offices and speak with one our debt relief lawyers. We offer a free initial consultation. Get yours now!
What do I have to do in order to be eligible to file for bankruptcy?Before you file any case, you have to take a credit counseling class. This class is available on line, is only about $25 - $50 and takes about two hours. You can only file one Chapter 7 and get a discharge every eight years. If you got a Chapter 7 discharge, you have to wait four years before you can file a Chapter 13 and receive a discharge (though you can file a Chapter 13 without qualifying for a discharge for other reasons, such as catching up on a mortgage).
If you have higher income and file a Chapter 7 with disposable income in your means test, there is a presumption that you are abusing the bankruptcy system. Only those who have a higher than average income for their household size need to fill out the means test. The rest of the means test deducts secured debt, taxes, child support, health insurance and other actual expenses.
It also deducts assumed expenses set by the IRS debt repayment regulations, such as rent, food, clothes and transportation. If money is left over in your means test after deducting these expenses from the last six months average, that amount is paid to general unsecured creditors in a Chapter 13 plan. Otherwise, there is a presumption that you are abusing Chapter 7.
You can overcome this presumption by claiming special circumstances. The means test only looks back at your last six months of income to make a determination of whether you can pay into a Chapter 13 plan for the next five years. Obviously, if there is a compelling reason to believe your last six months of income is not typical for you or you have experience some other significant change, you stand a chance of overcoming the presumption.
The US Trustee, a division of the Department of Justice, objects to Chapter 7 bankruptcy petitions that show a presumption of abuse. The final decision is made by a bankruptcy judge, though most objections start out as informal and may be resolved long before a judge hears the case. If an issue comes up with your bankruptcy petition after we file it, one of our Kent bankruptcy attorneys will be there to fight for you and your family.
Another consideration is filing in the proper district. You have to have resided the majority of the past six months in the district where you file. You may also be able to file in a district where you own major property. If you have not lived in the same location for the last six months, it is especially important to consult with a good bankruptcy lawyer. This is because the type and amount of relief to which you may be entitled could be dramatically impacted by the specific state bankruptcy laws that apply in your case.
Overall, any person or business in the United States may file bankruptcy. The question is whether you are filing the best chapter for you and what the consequences may be if you initially misfile under the wrong chapter. And, in certain cases, there is no clear cut answer. This is why it's absolutely critical to consult with an experienced and knowledgeable bankruptcy lawyer before you file. A good Kent, WA bankruptcy and debt relief lawyer will help minimize the risk of your case being filed under the wrong chapter and ending up being something a judge must decide.