Chapter 7 Bankruptcy in Vancouver, Washington

Vancouver is the largest city in Clark County, Washington, and sits in the picturesque Pacific Northwest. It is an area well known for its rich history, local businesses, and amazing views of the Columbia River.

The city offers a high quality of life to its residents. However, like in any community, some may face financial hardships due to unforeseen circumstances like job loss or medical emergencies. If you find yourself overwhelmed by debt, Chapter 7 bankruptcy can provide a fresh start by getting rid of your unsecured debts and offering relief from creditor harassment.

Consult a Vancouver bankruptcy attorney with decades of experience to get started if you’re considering filing for bankruptcy.

Chapter 7 bankruptcy, is also known as “liquidation bankruptcy,” this allows you to remove most unsecured debts, such as medical bills, personal loans, and credit card debt. In exchange, you might need to surrender certain non-exempt assets, which are sold to pay off your creditors.

Washington’s bankruptcy laws provide specific exemptions to protect essential assets like your home, car, and even your retirement accounts.

Eligibility for Chapter 7 is determined by the means test, which compares your income to the median income in Washington for a household of your size. If your income happens to fall below the median, you will most likely qualify. However, if your income exceeds the median, more calculations will be needed to determine your eligibility status.

You will find that Chapter 7 is primarily governed by federal law under Title 11 of the United States Code, specifically in sections 701-784. The statutes listed here outline a trustee’s role in the process and the procedures involved when filing, claiming exemptions, and understanding dischargeable debts.

In Washington, you can choose between state and federal exemptions. Some of these are highlighted below:

• Homestead Exemption: Up to $125,000 of equity in your primary residence (RCW 6.13.030)
• Vehicle Exemption: Up to $3,250 of equity in one vehicle (RCW 6.15.010)
• Personal Property Exemptions: Household items, clothing, and tools of the trade, up to specific limits
• Public Benefits: Social security, unemployment, and workers’ compensation benefits

Here are the steps you can take to file for Chapter 7 bankruptcy in Washington:

1. Credit Counseling: You are required to complete an approved credit counseling course, which must be done within 180 days before filing.
2. Prepare Your Bankruptcy Forms: Gather all of your required forms, including the petition, schedule, and statement of your financial affairs.
3. File With Bankruptcy Court: Now, you will submit all of this paperwork to the US Bankruptcy Court for the Western District of Washington. They are the ones that handle all the cases for Vancouver and the Clark County area.
4. Automatic Stay: Once you have filed, an automatic stay goes into effect and will stop all collection activities, including lawsuits, wage garnishments, and creditor phone calls.
5. Meeting of Creditors: This is also known as a 341 Meeting, in which you will meet with the trustee and creditors so they can review your financial situation.
6. Discharge of Debts: After this process is completed, most of your unsecured debts are discharged. This typically happens within four to six months.

A court-appointed trustee oversees the Chapter 7 process. They will review your assets, liquidate non-exempt items, and distribute the funds to your creditors.

While Chapter 7 is a way to discharge most of your unsecured debts, certain obligations you may have, like child support, alimony, student loans, and tax debt, are usually non-dischargeable.

A Chapter 7 bankruptcy will stay on your credit report for up to 10 years. However, many people begin rebuilding their credit soon after discharge.

Yes, you can file without an attorney in a process known as pro se filing. However, since these laws can be complex, even a small mistake in your paperwork or the procedures can lead to a delay or even a complete dismissal of your case. Hiring a Vancouver bankruptcy attorney helps ensure your case is handled correctly and efficiently.

The filing fee for Chapter 7 bankruptcy is $338 as of 2024, which is payable to the court. Additional costs may include credit counseling and debtor education courses, which typically range from $20 to $100 each. Attorney fees in Washington vary but often range from $1,000 to $2,500, depending on the actual complexity of your case.

The process typically takes 4-6 months from filing to discharge. However, delays can occur if there are issues with your paperwork, disputes over exemptions, or challenges from any of your creditors.

Your employer is usually not notified about your bankruptcy unless there is a wage garnishment that needs to be stopped. Bankruptcy filings are public records but aren’t typically accessed by employers without cause.

If you and another person, like your spouse or a co-signer, for example, are jointly responsible for a debt, your bankruptcy discharge only applies to your part of the obligation. The co-signer or joint account holder remains liable unless they also file for bankruptcy.

While Chapter 7 bankruptcy is certainly a good way to eliminate overwhelming debt, it isn’t always going to be the best solution or the only one. Consider these alternatives before filing, as they may be a better fit for your financial situation or goals.

This involves combining many debts into a single loan or credit account with a lower interest rate or more manageable monthly payments. This option works well if you have good credit scores and can still afford to repay your debt, even if you are struggling at the moment.

With this option, you would take out a consolidation loan or use a balance transfer credit card to pay off high-interest debts. This can simplify your payments, reduce interest rates, and protect your credit scores. However, it doesn’t reduce the amount of your debt and may still require some kind of collateral for a secured loan.

Debt settlement involves negotiating with your creditors to reduce the total amount owed. This is often an option if you have funds but can’t afford to pay the full balance. You would work with a debt settlement company or negotiate directly with the creditors.

Your creditors might agree to accept a lump-sum payment that’s less than the full amount owed, which reduces the total debt amount and avoids the long-term impact of bankruptcy on your credit. However, settled debts may appear on your credit report, and forgiven amounts can be taxed as income.

If you have a steady income and want to avoid having to liquidate your assets, Chapter 13 bankruptcy might be a better option than Chapter 7. Chapter 13 involves creating a court-approved repayment plan to pay off your debt over three to five years.

You would file for Chapter 13, propose a payment plan that best fits your income and expenses, and start making monthly payments to a bankruptcy trustee once approved. This protects your assets, stops foreclosure, and discharges some of your debts after the repayment plan if the payments are made as agreed on.

However, this option requires a regular income and a longer commitment and can be more expensive due to attorney and trustee fees.

In addition to these alternatives, you can consider credit counseling and debt management plans, loan modification, or personal loans from friends and family.

If you want to successfully navigate the Chapter 7 process, you must have a thorough understanding of federal and state laws. An experienced bankruptcy attorney in Vancouver can:

• Evaluate your eligibility and recommend the best course of action
• Protect your assets by maximizing exemptions
• Handle paperwork and represent you in court
• Negotiate with creditors and ensure compliance with legal procedures

So, if you find yourself struggling with overwhelming debt, Chapter 7 can be the answer you have been looking for. The process may seem a bit complicated, but you don’t have to go through it alone. A skilled bankruptcy attorney in Vancouver, Clark County, Washington, can guide you through every step of the process and ensure your rights and assets are well protected.