Bankruptcy in Washington
When you file for bankruptcy in Washington, you should be aware of the following information. The more information you know about bankruptcy before filing, the better you will perform during the procedure. The two methods of filing for bankruptcy in the state of Washington include: Chapter 7 and Chapter 13. Chapter 7 is liquidation bankruptcy; it’s when you liquidate your possessions and your past debts are discharged. Chapter 13 is also known as Wage earner bankruptcy. All of your debt won’t be forgiven, but you will be able to work with your creditors so that it is paid off within three to five years.
Chapter 7 bankruptcy
When you declare bankruptcy in Washington, it will probably be under Chapter 7. As previously stated, this method will discharge all old debts. There are a few exceptions to the rule that should be mentioned however. These include: alimony, child support, recent back taxes, student loans, recent purchases of at least $550 for luxury goods, fines or other penalties form the government, debts that were incurred by fraud, and recent cash advances of $825. When you file for Chapter 7, you must make less than the median annual income for your state or you will have to file for Chapter 13.
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Chapter 13 bankruptcy
You have another option besides Chapter 7 when declaring bankruptcy in Washington: Chapter 13. This method will not discharge your old debts, but will instead require you to have it paid off within three to five years. Your creditors will forgive you of some of the debt in order to make this feasible. The best thing about this form of bankruptcy is the fact that if you are in danger of having your home foreclosed upon, your creditors will no longer be able to do so. In fact, any lawsuits against you having to do with your debt will have to be dropped under penalty of law.
Exemptions in Washington
The most important thing that you need to know about when declaring bankruptcy in Washington is what exemptions you will be allotted. This is property that your creditors will not be able to take from you when you file for Chapter 7. Some examples of exemptions in the state of Washington include: your home up to $20,200, life insurance payments, alimony, child support, pensions and retirement benefits, health aids, jewelry to $1,350, health aids, lost earnings payments, your motor vehicle up to $3,225, tools of your trade up to $20,200, etc.