Chapter 7 Bankruptcy Washington State | Bankruptcy Attorneys & Lawyers
A Washington State Chapter 7 bankruptcy is a federal case. And your right to seek protection under the Bankruptcy Code is actually guaranteed in the US Constitution. States do not operate bankruptcy courts. The final order that cancels your debt in a bankruptcy, called the “discharge injunction”, is automatically valid all over the country.
The basic process for filing a Washington State Chapter 7 bankruptcy is very similar to what it is throughout the county: you file a petition with the bankruptcy court, a trustee is appointed to administer your case, you meet with the trustee at a hearing called a “meeting of creditors”, if you have any property that can be liquidated to pay your debts, the trustee can do that, three months after filing your case, you get a discharge and your case closes.
However, there could be some important differences depending on what state you live in. In a Chapter 7, you have to show that you can’t pay your debts based on the income you earn. The bankruptcy law that the US Congress passed in 2005 sets out standards for determining who can and who cannot file a Chapter 7. These standards are based on the median household income of the debtor (t he person who owes debts). The median income is determined by what state you live in. Washington has a higher median income than most states.
If you make over the median income, you may still qualify for a Chapter 7 by showing that your expenses use up all that income. You can deduct some of your actual expenses, such as mortgages, taxes and child support payments; but some expenses are strictly defined, such as food, clothes, rent, utilities and transportation. Rent and utility standards are based on what county you live in.
Another important difference from state to state is the definition o f the kind of property you are allowed to keep by law. The property you can keep is “exempt” from being liquidated. These exemptions vary from state to state. In some states, such as Washington, you can choose either state or federal exemptions. If you have moved to Washington in the past two years, you may have to use the exemptions from your old state.
It is important that you take to an experienced bankruptcy attorney to choose the best exemptions for your situation – you cannot choose a mix of state and federal exemptions, which have some important differences.
There are two federal districts in Washington – the eastern and western districts. The locations for meetings of creditors are spread out all over the state. Most likely, you will not have to travel far to attend your court date.
You must have lived in Washington the majority of the past 180 days to be able to file here, though you still may be able to file here if you have some property located in Washington.
There are also many aspects to filing a case in Washington that an attorney learns from practicing in the local courts for a while. It is important that you hire an attorney who knows the local trustees, judges, clerks, etc. and who knows the ins and outs of the local courts. Our Washington State bankruptcy attorneys have years of experience of working with the state and federal bankruptcy laws. We can advise you about some important local practices that are not written down in the bankruptcy code.