Chapter 7 in Bellevue

For 30 years, we've been helping people understand that bankruptcy is a financial tool, not a product of poor financial choices. In fact, the financially savvy protect their financial interests when the unexpected happens. Job loss, medical bills, or simply trying to stay afloat in a shaky economy push even the most responsible Washingtonians into unmanageable debt.

Filing for bankruptcy isn't giving up. It's taking control of your financial future. With our experience in Western Washington State, we can tell you that staying stuck in overwhelming debt is far more damaging than using the law to get the relief you deserve.

Don't struggle with overwhelming debt any longer. Contact our Bellevue law offices now for a free consultation to learn how bankruptcy can get you back on track.

What Is Chapter 7 Bankruptcy?

Chapter 7 is a bankruptcy protection for individuals under federal law that allows unsecured debts to be dismissed. It's often called "liquidation bankruptcy" because a court-appointed trustee may sell or "liquidate" non-exempt property to pay creditors. However, in many cases, most or all assets are protected by exemptions under Washington State law (like the RCW 6.13 Homestead Exemption). The court will issue a discharge order once approved. According to the United States Bankruptcy Court:

"A discharge releases individual debtors from personal liability for most debts and prevents the creditors owed those debts from taking any collection actions against the debtor."

Chapter 7 bankruptcy is a powerful, legal way to hit reset and get relief from overwhelming financial pressure.

Who Qualifies For Chapter 7 Bankruptcy In Washington State?

In Washington State, you can file for Chapter 7 bankruptcy if you meet specific requirements:

• Means Test (11 U.S.C. § 707(b)): Your household income must fall below the median income for households of the same size in Washington State. If your income surpasses this threshold, you’ll need to show that after covering necessary living costs, you have little or no disposable income left.
• Mandatory Credit Counseling (11 U.S.C. § 109(h)): A credit counseling course must be completed through a U.S. Trustee-approved provider within 180 days prior to filing.
• Prior Bankruptcy Discharges (11 U.S.C. § 727(a)(8) and § 1328(f)): You are not legally able to file for Chapter 7 if you had a Chapter 7 discharge in the last 8 years. You also cannot have had a Chapter 13 discharge in the past 6 years.
• Residency Requirement (28 U.S.C. § 1408 and Washington's Local Bankruptcy Rules): To file in a Washington State district court, you must have lived in the state for at least 91 of the 180 days before filing. Property exemption eligibility follows RCW 6.15.010, which generally applies if you've lived in Washington for the majority of the past two years.
• Meet Washington State's Residency Requirement: You must have lived in Washington State for most of the 180 days before filing. If you moved here recently, you may need to wait before you can file in this state.

Our Bellevue Chapter 7 bankruptcy attorneys will help you determine whether you meet these qualifications.

How To File For Chapter 7 Bankruptcy In Bellevue, Washington State

Title 11 of the U.S. Code governs Chapter 7, and in King County, the Bankruptcy Court for the Western District of Washington will handle your case. Although the court is in Seattle, you can file documents online through the PACER system (www.pacer.gov). When you work with our bankruptcy lawyers in King County, we'll provide legal guidance at every step:

1. Complete a Credit Counseling Course: Within 180 days of filing for bankruptcy, you have to complete a U.S. Trustee-approved credit counseling course. You can find approved providers in Washington State at www.justice.gov/ust.
2. Gather Financial Documents: Documents include recent tax returns, pay stubs, bank statements, a list of debts and creditors, monthly expenses, and any property you own. Your attorney will use these to prepare the necessary forms.
3. Pass the Means Test: This is required under 11 U.S.C. § 707(b) to determine if your income is low enough to qualify. Washington's median income guidelines vary by household size and are updated regularly.
   
4. File Your Petition with the Bankruptcy Court: You must file your Chapter 7 petition and schedules with the Seattle Division of the:
   
   Western District of Washington Bankruptcy Court
   700 Stewart Street
   Seattle, WA 98101.
   
   Filing fees are currently $338, but you may qualify for a fee waiver or payment plan.
5. Attend The 341 Meeting of Creditors: The 341 meeting is a required hearing held approximately 30 days after filing, where a trustee will ask you questions under oath. For Bellevue residents, these meetings are typically held remotely or in Seattle.
6. Take a Debtor Education Course: After filing, you must complete a second financial management course before the court will issue your discharge under 11 U.S.C. § 727(a)(11).
7. Receive Your Discharge: If your case goes smoothly and there are no objections, you'll receive a discharge order in about 3 to 4 months, wiping out most unsecured debts under 11 U.S.C. § 524.

Because we live and work right here in Bellevue, our team understands both the legal process and the unique financial challenges people face in King County. From Factoria to Bridle Trails, Crossroads, Newport Hills, Lake Hills, and Wilburton, we've helped neighbors across Bellevue get a fresh financial start. We're just minutes from Downtown Park, Bellevue Square, and the Bellevue Transit Center.

FAQs About Chapter 7 Bankruptcy In King County, Washington State
Bellevue Attorneys Help You Receive Debt Relief Through Chapter 7

Make smart financial decisions. Call our Chapter 7 bankruptcy attorneys in Bellevue today for a free consultation and get the relief you deserve.

A Chapter 7 bankruptcy is generally for lower income people who need to get a fresh start quickly so they can start rebuilding their lives. If creditors are paid anything in a Chapter 7, it is from the liquidation of assets or selling some of the debtors property right away to pay at least part of the debt back. A trustee is appointed to take these assets, sell them and divide the money evenly among creditors. Sometimes the trustee can go back in time to undo payments of debt or transfers of property, recover the money, and pay that to creditors if the laws says that would be fair. However, it is fairly rare for property to be sold or for transactions to be undone and creditors do not receive anything. At least they know where they stand because they would have been unlikely to receive anything without bankruptcy anyway and, if they did, only the most aggressive creditors would receive some of what they are owed at the expense of great financial hardship to the debtor.

Most property is not taken in a Chapter 7 because the law defines it as exempt from liquidation. Debtors are allowed to keep their necessities as a part of the fresh start bankruptcy provides. In Washington, a debtor can choose between federal or state exemptions (but they must choose one or the other). In some situations, it makes more sense to choose Washington’s exemptions, in some it makes more sense to choose the federal exemptions.

Most people who file a Chapter 7 only have to attend one hearing called a meeting of creditors. This hearing is very informal but very important to the process. Creditors rarely appear. The debtor and his attorney meets with the trustee and is sworn in to testify about the bankruptcy documents filed in the case. The debtor must file a list of property, debts, income and assets with the bankruptcy court. The debtor also provides pay stubs, bank statements and tax returns to the trustee. At the meeting of creditors, the trustee looks over all these documents and asks follow up questions to get additional information in person, make sure the debtor is telling the truth, make sure the laws are being followed and investigate assets.

The whole Chapter 7 process usually only lasts about three months. At the end of the case, the debtor receives a discharge. The discharge basically cancels debt by making it illegal for a creditor to try to collect them ever again. The Chapter 7 is reported for 10 years on a credit report. Some debt, such as student loans, some back taxes, spousal maintenance, child support and fines are not discharged. If a debtor wants to keep property they are making payments on, such as a car or a house, this can be done if the debtor can keep making the payments.

Because a Chapter 7 is so easy, a debtor who files Chapter 7 must show they are not abusing the system by filing a means test. The means tests measure the average of the last six months income. If this income is higher than the average income for a household the debtor’s size, they must show that they still have no money in their budget to pay debts by deducting expenses on the means test. Some expenses are what the debtor actually spends, such as car payments, mortgage payments, child support, day care and health insurance. Some expenses come from an IRS table that is set by regulations, such as food, clothes, transportation and rent. Because the means test is imperfect, a debtor can still show their special circumstances make it impossible to pay back any debt. The means test is just a jumping off point to determine whether the debtor is abusing the bankruptcy system by filing a Chapter 7. If the means test shows some money in the budget to pay at least some of the debt, the debtor may have to file a Chapter 13 repayment plan.