Personal Bankruptcy Attorneys in Seattle
Are you struggling to make ends meet because of the level of debt you have
accrued? Whether you made understandable mistakes or experienced substantial
misfortune, you may be considering bankruptcy as a way of attaining financial freedom.
Henry & DeGraaff, we have spent
more than three decades assisting individuals and families through personal bankruptcy. Congress
created the Bankruptcy Code to allow honest, hardworking debtors to obtain
new financial beginnings, and we have the experience and knowledge needed
to help you take full advantage of these state and federal laws.
Ready to learn more? Call our personal bankruptcy attorneys in Seattle at
(206) 483-0505 or
contact us online today.
What Is Chapter 7 Bankruptcy?
In Chapter 7 bankruptcy (also known as liquid or straight bankruptcy),
the trustee accounts for any exemptions you are entitled to before determining
which assets, if any, should be auctioned off to pay your creditors.
Exemptions are assets (or certain levels of equity) you can elect to protect
from the liquidation process. Whether you can claim a certain exemption
depends on applicable state and federal laws.
Exemption law allow you to keep certain assets deemed necessary to lead
a normal life, such as:
- Household goods and furnishings
- Motor vehicles
- Retirement funds
- And other similar items
In some cases, exemptions can even allow you to avoid foreclosure on your
home. If all your assets are exempt, your creditors will receive nothing
from you. The court will then discharge any unsecured debt that was not
covered by the liquidation process.
If debt is discharged, you are no longer liable, and your creditors are
no longer permitted to pursue collection actions, such as:
- Wage garnishments
- And more
The entire Chapter 7 process may take up to 6 months.
Qualifying for Chapter 7
To qualify for Chapter 7 bankruptcy, you generally must make less than
your state’s median income. This is called the means test. Chapter
7 is typically best for those with a low income and minimal assets.
What Is Chapter 13 Bankruptcy?
Unlike Chapter 7, Chapter 13 involves debt reorganization. Rather than
undergo asset liquidation, you will propose a plan to fully or partially
repay your creditors over time, subject to the approval of the bankruptcy trustee.
While Chapter 7 bankruptcies take place immediately, bankruptcies under
Chapter 13 last from 3-5 years, during which you will make regular payments
to the trustee using all your disposable income. Individuals typically
choose Chapter 13 for a few reasons.
They may not qualify for Chapter 7 because they don’t pass the means
test. Alternatively, they may qualify for Chapter 7, but they don’t
want to risk losing high-value assets. Many people use Chapter 13, in fact, to
save their homes from foreclosure. Ultimately, Chapter 13 is best for individuals with a steady income and
more assets than they could protect through exemption claims.
What Is Chapter 11 Bankruptcy?
Like Chapter 13, Chapter 11 bankruptcy involves reorganization rather than
liquidation. Although Chapter 11 is primarily used by
businesses, some high-income or high-asset individuals may file Chapter 11 because
they don’t qualify for Chapter 13 and don’t want to lose property
through Chapter 7.
Through Chapter 11, you are allowed to develop your own plan for reorganization
and partial or full repayment of creditors, subject to the approval of
the trustee. Chapter 11 plans usually involve a portion of earnings going
directly to creditors for a period of time after the filing, as determined
by the details of the plan.
Need help deciding which type of bankruptcy is right for you? Give our
office a call at
(206) 483-0505 today.