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.
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 (e.g. clothing, household goods and furnishings, motor vehicles,
retirement funds, etc.). 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
(e.g. calls, lawsuits, wage garnishment, etc.). The entire Chapter 7 process
may take up to 6 months.
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.
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.
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.