Bankruptcy in Washington State
How does the process work?
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Chapter 7 Bankruptcy is about a three month process from beginning to end. The Chapter 7 bankruptcy process begins with the filing date. This is when your bankruptcy petition is actually filed with the bankruptcy court.
At the time of filing your bankruptcy petition, an “Automatic Stay” is in place. This “Automatic Stay” forbids any creditors from contacting you during the bankruptcy period. If you are currently being hounded and harassed by creditors, this will stop when we file our petition.
Many people are also surprised to learn that they will keep most, if not all of their personal property when they file for their Chapter 7 bankruptcy here in WA state. It's true. The overwhelming majority of our clients do not lose ANY of their personal property in their Chapter 7.
After I file my Washington State Chapter 7 Bankruptcy Petition is filed, what happens at my 341 Meeting of Creditors?
After a bankruptcy is filed, a Chapter 7 Trustee will be appointed over the debtor’s entire estate during the bankruptcy period. Roughly 20-40 days after the filing date, debtors will be required to attend what is called a 341 Meeting of Creditors. In the vase majority of cases, however, no creditors actually appear at this hearing.
At the 341 Meeting of Creditors, the debtor will appear before the Chapter 7 Trustee who will ask several questions pertaining to the bankruptcy petition. The Chapter 7 Trustee will determine whether or not there are any assets that they can recover to pay creditors. When you retain our firm, it is very important to disclose all financial matters and assets to your attorney. Many Chapter 7 Trustees either are or employ forensic accountants.
What happens after my 341 Meeting of Creditors' Hearing?
After the Meeting of Creditors, there is a period of about 60 days. During this time, the Trustee can investigate the debtor’s estate. If financial issues needing clarification or additional documentation are raised at the Meeting of Creditors, those issues are clarified and followed up on during this period. After this period is up and the Trustee has found no assets that he can legally go after, the Trustee will grant an Order of Discharge and close the case. After the discharge, all unsecured, non-priority debts are forgiven. Creditors are no longer allowed to attempt to collect on these pre-petition debts. They are fully discharged along with any additional fees and never have to be repaid.
For most people, especially those who do not own their own home, it is always preferable to try and file a Chapter 7 bankruptcy. The primary qualifying factor for being eligible to file a Chapter 7 is your income, or the income of you and your spouse if you are married. In most cases, we are able to determine if you will qualify for a Chapter 7 during your initial consultation.
The Chapter 13 Bankruptcy Process in Washington State
A Chapter 13 bankruptcy is commonly known as the “house-saver” bankruptcy. Chapter 13 bankruptcies stop foreclosure sales and place the mortgage arrears in a re-payment plan. A Chapter 13 bankruptcy can also reinstate a driver’s licenses if it is suspended due to unpaid tickets.
In some cases, it can also facilitate reinstatement if the suspension was due to auto accident liabilities. A Chapter 13 bankruptcy is also used in many other ways, such as managing tax payments or child support arrearages.
The Chapter 13 bankruptcy is a three to five year process where a portion of your total debt is actually paid back to your creditors. As with the Chapter 7 bankruptcy, the “Automatic Stay” begins with the filing of your petition. There is also a 341 Meeting of Creditors within 20 to 40 days after your petition and your schedules are filed.
When a Chapter 13 is filed, your attorney proposes a repayment plan to the Chapter 13 Trustee. Once your repayment is accepted, the Chapter 13 Trustee collects payments from you and administers payments to creditors who file claims. The plan may also be adjusted for feasibility until the Confirmation Hearing date.
The first Confirmation Hearing is the date that determines whether or not the proposed Chapter 13 Plan is feasible. There is no need to attend this Confirmation Hearing. This is simply the date when the judge looks over the proposed plan and will either order it confirmed or continued.
Confirmation Hearings are continued on a monthly basis until all matters are resolved. It is a normal part of the Chapter 13 bankruptcy process. When the Chapter 13 Plan is confirmed, the creditors who filed claims will begin to receive monthly payments from the Chapter 13 Trustee.
For additional information about filing a Chapter 13 bankruptcy, please see our web page devoted specifically to the Chapter 13 bankruptcy process here in Washington State.
At the end of the three or five years, a discharge will be granted and the case closed. As with the Chapter 7 discharge, most, if not all of your unsecured debts are forgiven and completely discharged. Creditors are no longer able to attempt to collect on these debts.
Call Our Washington State Bankruptcy Law Firm for a Free Confidential Phone Consultation Today!
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(206) 624-9605 (425) 653-4337 (253) 591-9191