Legal Guidelines for Filing Bankruptcy in Washington State

Filing for bankruptcy in Washington State involves adhering to specific legal guidelines designed to protect both creditors and debtors. Understanding these regulations can help individuals navigate the complex process and ensure compliance with state laws.

Types of Bankruptcy Available

In Washington, individuals can file for two primary types of bankruptcy: Chapter 7 and Chapter 13. Chapter 7 allows for the discharge of most unsecured debts like credit card bills and medical expenses, while Chapter 13 involves a repayment plan that reorganizes debt over three to five years.

Eligibility Requirements

To file for bankruptcy, you must first determine your eligibility. For Chapter 7, you must pass the means test, which compares your income to the median income for households in Washington. If your income is below the median, you may qualify. If it’s above, you may still file for Chapter 13.

For Chapter 13, you must have a regular income and your unsecured debts must be less than $419,275, while secured debts must be less than $1,257,850. These limits can change, so it’s crucial to check for the most current figures.

Mandatory Credit Counseling

Before filing for bankruptcy, you are required to complete a credit counseling session from an approved provider. This session must be conducted within 180 days before you file, and you will receive a certificate that you must submit along with your bankruptcy petition.

Filling Out the Bankruptcy Petition

The next step involves filling out the bankruptcy petition and schedules. This includes detailed information about your debts, income, expenses, and assets. Accurately completing these documents is essential, as any discrepancies could lead to your case being dismissed or your discharge being denied.

Filing Fees

Filing for bankruptcy in Washington incurs fees. For Chapter 7, the filing fee is around $335, and for Chapter 13, it is approximately $310. If you cannot afford these fees, you may request a fee waiver or apply to pay in installments.

Automatic Stay

When you file for bankruptcy, an automatic stay goes into effect, preventing creditors from pursuing collections, foreclosures, or repossessions during the bankruptcy process. This protection is generally effective until the bankruptcy case is resolved.

The Bankruptcy Trustee

Once your case is filed, a bankruptcy trustee will be appointed to oversee your case. The trustee’s role includes reviewing your petition, assessing your assets, and ensuring compliance with the bankruptcy laws. For Chapter 7, the trustee may liquidate non-exempt assets to pay creditors, while for Chapter 13, they will manage your repayment plan.

Meeting of Creditors

Approximately 30 days after filing, you will attend a meeting of creditors, known as the 341 meeting. During this meeting, the trustee will ask questions about your financial situation, and creditors may also appear to ask questions regarding your assets and debts. It's important to be prepared and provide honest answers.

Completion of Bankruptcy Process

After fulfilling all requirements, including making payments in a Chapter 13 plan or completing the process in Chapter 7, you will receive a discharge of debts. This discharge releases you from personal liability for most debts, giving you a fresh start financially.

Legal Assistance

Given the complexities involved in filing for bankruptcy in Washington State, it can be beneficial to seek legal assistance. A qualified bankruptcy attorney can guide you through the process, help you understand your rights, and ensure that you comply with all legal requirements.

Being well-informed about these legal guidelines is crucial for anyone considering bankruptcy in Washington State. Taking the time to understand the process can simplify your experience and lead to a successful financial recovery.