Chapter 7 Bankruptcy Attorney with 3 Decades Experience
Serving Clients in Tacoma and Throughout Pierce County
A fundamental goal of the federal bankruptcy laws enacted by Congress is to give debtors a financial “fresh start” from burdensome debts. The Supreme Court made this point about the purpose of the bankruptcy law in a 1934 decision:
[I]t gives to the honest but unfortunate debtor…a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt.
Local Loan Co. v. Hunt, 292 U.S. 234, 244 (1934). This goal is accomplished through the bankruptcy discharge, which releases debtors from personal liability from specific debts and prohibits creditors from ever taking any action against the debtor to collect those debts.
Anyone who is under a great deal of debt, but has inadequate income to repay that debt, could find financial relief under Chapter 7 of the U.S. Bankruptcy Code. Also known as liquidation bankruptcy, Chapter 7 bankruptcy allows a consumer to keep their exempt property. Because there is usually little or no nonexempt property in most chapter 7 cases, there is usually not an actual liquidation of the debtor’s assets; most individuals who file for bankruptcy keep all of their assets. Unsecured debts, together with secured debts where the consumer wants to surrender the collateral, are then discharged. Washington Fresh Start can provide exceptional counsel and guidance in this particular bankruptcy process.
Qualifying for Chapter 7 Bankruptcy in Washington
In order to file under chapter 7 of the Bankruptcy Code, a consumer must first pass the means test. If your gross income is within the median for a household of your size in your area, you will qualify for Chapter 7 bankruptcy, which allows you to eliminate your excessive debts quickly and to begin restoring your credit as soon as possible. You can sometimes qualify even if your income is beyond the median, or if your debts are primarily business related debts, so be sure to consult a bankruptcy attorney in Tacoma, Washington before jumping into the process of Chapter 7 bankruptcy.
A chapter 7 case begins with the debtor filing a petition with the bankruptcy court. In addition to the petition, the debtor must also file with the court: (1) schedules of assets and liabilities; (2) a schedule of current income and expenditures; (3) a statement of financial affairs; (4) a schedule of executory contracts and unexpired leases; and (5) a certificate of credit counseling. Debtors must also provide the assigned case Trustee with a copy of the tax return or transcripts for the most recent tax year, a recent bank and retirement account statement, and paystubs from employers received 60 days before filing. It is important for the debtor to cooperate with the Trustee and to provide any financial records or documents that the Trustee requests. The Bankruptcy Code requires the Trustee to ask the debtor questions at the meeting of creditors to ensure that the debtor is aware of the potential consequences of seeking a discharge in bankruptcy such as the effect on credit history, the ability to file a petition under a different chapter, the effect of receiving a discharge, and the effect of reaffirming a debt. In the normal bankruptcy case, the debtors will receive their order of discharge four to six months after the case is filed.
Among the schedules that an individual debtor will file is a schedule of “exempt” property. The Bankruptcy Code allows an individual debtor to protect some property from the claims of creditors because it is exempt under federal bankruptcy law or under the laws of Washington State. In most consumer bankruptcy cases, most assets fall into the exempt category and are kept by the debtors, subject to any secured claims of creditors, such as a mortgage or car payment. The process may seem complicated, but hiring Tacoma bankruptcy attorney David Yando simplifies the process for clients of Washington Fresh Start
Filing a petition under chapter 7 “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. The stay arises by operation of law and requires no judicial action. As long as the stay is in effect, creditors may not initiate or continue lawsuits, wage garnishments, or even telephone calls demanding payments. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor.
Contact a Tacoma Washington Bankruptcy Lawyer for a Fresh Start
Your best interests lie in your choice of a bankruptcy lawyer. Do not hesitate to speak with Attorney David Yando, who has over 30 years’ experience working with the Bankruptcy Court and Trustee’s, to discuss your situation and learn what we can do to help you find financial freedom. Bankruptcy has many benefits and could be your means of finding relief from overwhelming amounts of debt. Washington Fresh Start can help you make the best decisions and guide you through each step of the means test and of Chapter 7 bankruptcy. Contact us now to set up your initial consultation and learn more about how we can help!