A Chapter 13 Washington State bankruptcy is often called a reorganization bankruptcy. This type of Washington State bankruptcy allows individuals to pay off certain types of outstanding debts over a three to five year period. For those individuals who have non-exempt assets they do not want to liquidate (houses, cars, boats, etc.), the Chapter 13 bankruptcy is the preferred choice. People with predictable income available after their basic expenses are paid each month might also choose this type of Washington State bankruptcy.

Why Should I Choose Chapter 13 Bankruptcy?

With a Chapter 13 Washington State bankruptcy you can prevent a foreclosure on your house, make up missed payments for cars or mortgages, pay back taxes and stop interest accrual on various tax and other debts. Once the plan is established, if you stick to it, your remaining dischargable debt will be released. Repayment amount must be high enough to match or exceed the amount of money a creditor would have received in the case of a Chapter 7 bankruptcy.

You must have a dependable income source in order to file Chapter 13 and you must have enough disposable income left after basic expenses to follow the repayment plan. If you have secured assets like a house or a car that you are not willing to liquidate in order to pay your debts, then Chapter 13 bankruptcy might be the right choice for you. However, for the majority of individuals wanting to clear their debts and start fresh, Chapter 7 bankruptcy is the better option.

What is the Process for Chapter 13 Bankruptcy?

Before you can file for Chapter 13 Washington State bankruptcy, you are required to go through a credit counseling briefing. During this session, you will work on creating a personal budget and discuss alternatives to bankruptcy. Unless you receive an exemption from the briefing, you are required to go or your case will be dismissed.

After you complete your credit counseling, you will work with an attorney and bankruptcy trustee to prepare and file your Washington State bankrupcty paperwork. When all paperwork has been accepted, you will be required to attend a debtor education course. This course will last from 60 to 90 minutes and will help you establish a healthy financial future. Once you have completed this class, your Chapter 13 bankruptcy can be completed.

Qualifying for Washington State bankruptcy – Chapter 7

The reason why Chapter 7 Washington State bankruptcy is referred to as liquidation is because the process will convert your non-exempt assets to cash and use those to pay off some of your outstanding debt. Though this is the first part of the process in a Chapter 7 bankruptzy, the majority of people who apply for Chapter 7 do not actually have any non-exempt assets. For this reason, there is actually no liquidation.

Choosing a Chapter 7 Washington State bankruptcy usually means that your discharge will be received within a few months. There are certain debts that cannot be discharged. These include child support, student loans and certain tax debts. Debts that will be discharged are credit cards, medical, personal loans, judgments regarding car accidents, money owed for repossessed vehicles, some older tax debts, payday loans and wage or other garnishments.

To qualify for Chapter 7 bankruptcy in Washington State, you must go through the means test. Though there has been some negative hype in the media regarding this process, it turns out that the vast majority of bankruptcy petitioners successfully qualify. If you are not qualified, you may still be able to file Chapter 13 bankruptcy.

The means test consists of two sections. First you compare your monthly income to the median monthly income of other families in your state with the same makeup as yours. This is called the median income comparison. If the median income is equal to or greater than your monthly income, you qualify. The second step for Chapter 7 Washington State bankruptcy qualification is establishing the difference between your disposable income (any income you do not use on bills are basics) and your unsecured debts. Currently if your disposable income is less then $6,000 over the next 5 years then you qualify for Chapter 7 bankruptcy. You may still qualify for Chapter 7 Washington State bankruptcy if your disposable income is less than $10,000, but this depends on your allowed expenses.

The Washington State Bankruptcy Process – Chapter 7

There are many calculators online to help you determine if Washington State bankruptcy is the correct choice for you. There are some questions you can ask about your situation to see if you might qualify for Chapter 7 bankruptcy and if it is the right choice for you:

• Do I Have No or Low Income?




• Do I Have Very Little or No Money left each month after paying your living expenses?




• Do I have few or no assets aside from my clothing, furniture and other necessities?




• Do I rent or have little equity in my home?

After you have determined that you want to file for Chapter 7 Washington State bankruptcy, you are required to go through a credit counseling briefing before action can begin. This counseling session must be presented by a certified credit counseling agency. The idea behind this is to discuss alternatives to bankruptcy and go over your personal budget before the Chapter 7 bankruptcy process begins. If you fail to go through the briefing step, your case will most likely be dismissed. However, there are certain exceptions to the rule that can be made based on hardship.

The next step in your Chapter 7 bankruptcy process is to actually file your papers. You will at this point have an attorney assess your financial situation and draft a Washington State bankruptcy petition. You will need to present all of your income, asset, expense and debt information as part of the petition. Whether intentional or not, not disclosing all of your debts during this process could result in negative actions taken against you. Bankruptcy fraud is taken very seriously and you can be prosecuted whether or not you intentionally left out details.

After your attorney has filed your Washington State bankruptcy case with the local courts, you will most likely be given an immediately stay. All credit collections calls should cease. The very last step is for you to complete a Washington State-approved debtor education course. According to the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. This course will teach you how to better manage your personal finances so that you do not end up in the same situation again. These classes are designed to help those who have filed for Washington State bankruptcy have a healthy financial future.

Though it is a process that you should seriously consider before beginning, Chapter 7 bankruptcy may be the right avenue for you to give you a fresh start financially. You can rebuild your credit after the Washington State bankruptcy and live a healthier financial life by following the tactics and tips you have learned during your debtor education course.

Alternative to Washington State Bankruptcy: Debt Consolidation

The type of debt consolidation that is right for you will depend upon your assets, employment and overall financial situation. The main circumstance that will determined the type of debt consolidation that is best for you is whether or not you have equity in your home.

If you have equity in your home, you might consider a secured debt consolidation loan using your home as collateral. Other options if you have home equity include taking out a second mortgage or applying for a home equity loan. A second mortgage or home equity loan may be all you need to lower your credit debt and improve your financial situation. The major drawback of using your home as equity is that if you cannot make the payments, you run the risk of losing your home. You will also want to explore Washington State bankruptcy exemptions before you consider what route is best for your financial situation.

The second type of debt consolidation loan you may consider is unsecured. In this case, a company loans you money, allowing you to pay off your debt without putting up any collateral.

Alternative to Washington State Bankruptcy: Consumer Credit Counseling

Aside from debt consolidation, another alternative to Washington State bankruptcy is consumer credit counseling. You will work with a credit counseling service to create a plan to lower or eliminate your debts. The counseling service can often make deals with your creditors to lower or reduce your payments that you would not be able to make on your own. Once the plan is in place, you will make scheduled payments to the Washington State credit counseling service and they will pay your creditors according to the predetermined plan.

In most cases, a debt consolidation will stop hounding from creditors and wage garnishments. The payment process can last two years or longer, but your time will differ depending on your situation. Your timeline will most likely be firmly established while you are creating your repayment plan with the credit counseling service. While you are paying off your debts, you cannot apply for additional credit.

The cost of working with a Washington State credit counseling service can range anywhere from nothing to a monthly fee that eventually adds up to quite a significant cost. Before entering into an agreement, you will want to do research on all credit counseling services you consider to be sure they are a reliable, trusted service. In many cases, these services are not-for-profit and receive at least partial funding from creditors.

Unlike a Chapter 7 Washington State bankruptcy, debt repayment plans do not allow you to start over with a clean slate. You are still responsbility for all your debts – both those included and not included in the repayment agreement. It is also your responsbility to keep track of all your creditors during the process to be sure that they are receiving payment from the credit counseling service as agreed. Your credit history is not erased by any agreements made during a credit counseling process, but your payments to creditors will be reported to credit bureaus. These reports may include that the account is in financial counseling, that regular payments are being made or other types of information. It is important to watch your credit reports during this time to make sure your credit counseling is reflected on outstanding and delinquent accounts.

Though a Washington State bankruptcy might be the best way for you to improve your financial situation, for some credit counseling or debt consolidation prove to be better, less extreme options. This article is provided as information only and should not be considered professional advice in any way. To make the right choices for you, be sure you do the research and speak with an attorney as necessary.

The very last step in filing for Washington State bankruptcy is the debtor education course. This course will be taken after you have filed for bankruptcy and all stops are in place, but before the discharge is official. Debtor education may be performed in person, on the phone or on the internet. Sessions typically cost between $50 and $100, but fee waivers are available for those unable to pay the price.
During the Washington State bankruptcy debtor education course, you will learn how to create a personal or family budget, manage your finances and use credit wisely in the future. This course is mandatory and you will not receive your discharge if you do not complete it. This course is separate from the Credit counseling briefing you attend prior to filing for Washington State bankruptcy, but it is just as important.

The purpose of the debtor education course is to help you avoid financial issues in the future and take full advantage of the “clean slate” that your Washington State bankruptcy has provided for you.

There are a few different options when it comes to completion of your Washington State bankruptcy credit counseling briefing. Though it is required, you may be able to complete the session in person, over the phone or online. The bankruptcy credit counseling briefing will include a review of your financial situation, discussion of alternatives to Washington State bankruptcy and will also help you to begin designing a budget plan. These sessions average between 60 and 90 minutes in length.

The average cost of a credit counseling session is, according to the U.S. Trustee’s Office, about $50. Your fee will depend upon where you live and what type of session you attend. The agency must disclose all fees up front and you may request a fee waiver if you cannot afford to pay. This session is mandatory for those filing for either Chapter 7 bankruptcy or Chapter 13 bankruptcy.

There are very few exceptions to completing the Washington State bankruptcy credit counseling requirement. Exceptions can only be provided by statute and you will want to discuss your possible exception reasons with your attorney way before your filing date. He or she can help you decide if you might qualify for an exception and what documentation you will require. Bankruptcy attorneys and court judges are rarely able to wave the credit counseling requirement.

Once you have completed your Washington State bankruptcy credit counseling course and received your certificate, you will need to give that to your attorney so it can be included with the rest of your paperwork.