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Everett Chapter 7 Bankruptcy Attorneys
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Experienced Everett Chapter 7 bankruptcy attorneys
The basics of a Chapter 7 bankruptcy.
A Chapter 7 case is a “liquidation bankruptcy”. That means, if creditors receive any money in the process, it comes from liquidating assets – converting property into cash to pay your creditors. The creditors have an opportunity to file a claim with the bankruptcy court and they get paid a pro rata share based on the percentage of the overall debt they have.
This may seem complicated. In reality, however, it's not. One of our Everett Chapter 7 bankruptcy lawyers can explain the process to you in more detail when you call our offices. Most of our Chapter 7 clients are able to successfully "discharge" or wipe out all of their debts. At the same time, we are often able to "exempt" all of their personal property and assets, which means that they get to keep everything they own.
Lose your debts. Keep your property.
Most people in Chapter 7 do not lose any property. Most basic property is “exempt” from being taken. Don't worry, most everything you own is probably safe. Our Snohomish County Chapter 7 bankruptcy attorneys can fairly easily determine what property you have, if any, that might not be exempt.
Once a Chapter 7 case is filed, a trustee is appointed to investigate if there are any assets. Your bankruptcy forms include a list of all your property, your debts, your income and your budget along with other financial details. You also have to provide supporting documentations to the trustee before your “meeting of creditors”, which is the only hearing you are likely to have to attend. And, don't worry. It's almost always a very painless hearing. Plus, one of experienced Everett Chapter 7 bankruptcy lawyers will be with you at this hearing with you.
This hearing takes place about a month after you file your case. The trustee examines your petition and other documents and asks you follow up questions. Creditors rarely appear. Your petition needs to include a list of exemptions to your property. If the trustee thinks there is some property that isn’t exempt, he or she might investigate further. Of course, your attorney will be at the hearing with you and assist you in providing the documents to the trustee. In the majority of cases, there is no follow up after the hearing and debtors get to keep all their property.
How do I qualify?
To qualify for a Chapter 7, you must show that you don’t have enough income to pay your debts. If your household makes over the median income for its size in Washington, you are subjected to a “means test”. The means test determines whether you are presumed to be abusing the bankruptcy system by filing a Chapter 7. One of our Everett Chapter 7 bankruptcy lawyers will help you determine if you can pass the means test.
Basically, it tests your ability to pay your creditors by deducting certain actual expenses, such as mortgage payments, taxes and health insurance and other standard expenses, such as food, clothes and gas, taken from the IRS rules for paying back delinquent taxes. If there is money left over in this means test budget to pay something to your unsecured creditors (such as medical bills and credit cards), then you may have to file a Chapter 13 bankruptcy with payments lasting five years.
Before filing a Chapter 7, you have to take a credit counseling class, which usually lasts about two hours and is available on the internet or by phone. After filing your case, you have to take a debtor education class, which also lasts about two hours and can be taken on the internet or over the phone.
About two months after your meeting of creditors, or about three months after filing your case, you should receive a discharge. The discharge prevents creditors from trying to collect a debt from you ever again. Not all debt is discharged – some debt, such as back alimony or child support, some back taxes and student loans cannot be discharged. Most debt can be discharged, but you should talk to an attorney to be sure what debt you can discharge and what you can’t.