A chapter 7 bankruptcy is the best debt solution for most people.  When you file a chapter 7 a few things happen immediately:

• You don’t have to make any more debt payments, unless you want to.
• The phone calls stop.
• Lawsuits and garnishments stop.
• You can get your discharge in a matter of months.
• Your discharge means that you are not required to pay any of your discharged debts.

Most people qualify for a chapter 7:

• Many people think that personal bankruptcy is gone because the law changed.  That’s just not true.  Personal bankruptcy is still available to most people.
• In order to file a chapter 7, you have to pass the Means Test
• If you received a chapter 7 discharge in the last 8 years, you cannot file chapter 7 again.  But, if you received a chapter 7 or chapter 13 discharge more than 4 years ago, you can file a chapter 13.

You won’t lose your property in a chapter 7

• First of all, the Bankruptcy is meant to give you a fresh start.  For that reason, the Bankruptcy Code provides many protections for you and for your property.  The drafters of the Bankruptcy Code realized that if people lost all of their property, then bankruptcy would not do them any good.
• If you are making payments on something - like a car - and you can afford to keep making the payments after bankruptcy, then you can keep the property.
• If you have fallen behind on the payments, then you can ewalk away from the property and have the debt discharged, work out a repayment plan with the lender, or file a chapter 13.
• The bankruptcy code allows you to “exempt” property, so that you can get a fresh start.  Unless you have something that is very valuable - like a 4 carat diamond ring - your property is most likely exempt.  When your property is exempt, it means that you get to keep it during and after the bankruptcy.
• If you have a piece of very valuable property, then you still may be able to exempt it.   I can structure the unused portion of your homestead exemption and use a wild card exemption to protect the property.
• If a piece of property is so valuable that you can’t exempt it, then you can file a chapter 13.  In a chapter 13, you get to keep all of your property, no matter how valuable it is.

Once you file bankruptcy, the creditors stop harassing you.

• You get protectiono from your creditors as soon as you file the bankruptcy petition.  This is called the automatic stay.  The automatic stay means that creditors must stop calling, writing, or doing anything else to try and collect a debt from you.
• If a creditor does not obey the automatic stay, then you can get damages from them.

You are not required to appear before a judge.

• You donj’t have to go to court and appear before a judge, unless your case is unusual.  The only requirement is that you attend the 341 meeting.  The 341 meeting is often held in a courthouse, but it is in front of the trustee not the judge.
• The 341 meeting usually lasts about 5-10 minutes.  You are required to swear under oath that the information in your bankruptcy petition is true and that you have no changes to make.  Most people spend more time waiting for the meeting to start than they actually spend in the meeting.  I will represent you in the meeting and be there with you.
• Of course, if you want to bring a matter before the court, that is your right.

Once you get your chapter 7 discharge you are done.

• The discharge is automatic in most cases.  As long as you disclose everthing on your bankruptcy petition, you have nothing to worry about.
• The discharge relieves you of the obligation to pay old debts.

• The vast majority of debts are dischargeable, but some are not.  The important thing is that even if you can’t get rid of a debt, I can create breathing room so that you can actually make the payments on that debt.
  • You can’t get rid of child support or spousal support obligations in bankruptcy.
  • Certain tax debts can’t be discharged in chapter 7, but they can be taken care of in a chapter 13.  It depends on the type of tax and how old the debt is.  Talk to me and I can help you find a way to take care of your old tax debts.
  • You still have to pay debts for things you want to keep like your house and your car.
    • If you can’t afford to keep something, then you can surrender it and wipe out the debt.
    • If you surrender your house, you don’t have to give it up that day.  The lender still must foreclose on the deed of trust, a process that takes at least 120 days from start to finish.  That gives you plenty of time to find a new place to live.
  • Credit card debts are dischargeable, you if you have used your credit cards recently, then let me know so that I can make sure those recent credit card charges are included in the discharge.
  • Student loans are also tricky, but there are ways to deal with them as well.
  • There are other non-dischargeable debts for things like fraud, criminal penalties, damages caused by driving drunk, and things like that.  These don’t arise very often and can sometimes be dealt with, so that you are included in the discharge.
• Most people get all the relief they need from a chapter 7 discharge, but if you don’t, then we can talk about a chapter 13.

If you need a bankruptcy lawyer, contact David H. Fuller.

David H. Fuller is a Washington State bankruptcy lawyer representing individuals and business in the Seattle and Tacoma area, including Kent, Renton, Tukwila, Federal Way, Auburn, Bellevue, and all parts of King and Pierce County.   I am a debt relief agency.  I help people and businesses file for bankruptcy under the United States Bankruptcy Code.  No part of this website constitutes legal advice or creates an attorney client relationship.  If you wish to establish an attorney client relationship, you can contact my office for a free consultation.