Can I Qualify?

Prices for everyday necessities are on the rise for Snohomish County families and don't seem to be slowing down anytime soon. As a result, more and more of our Everett neighbors are struggling to make ends meet while facing growing debt. If you are one of the many in our community facing mounting pressure from increasing costs, bankruptcy could offer the financial relief you need.

With legal bankruptcy, you can manage your debts and get your financial health back on track. Our Everett-based law firm can help. Our lawyers specializing in bankruptcy law will review your financial situation and help determine if you qualify for bankruptcy relief under U.S. Code Title 11 and Washington State bankruptcy law RCW 39.64. Get started by contacting our office now for a free consultation and learn if you qualify.

Bankruptcy in Everett is legally and financially complicated. To protect your rights and achieve a favorable outcome for your case, you need to work with a local Snohomish County attorney who specializes in bankruptcy. Our specialized debt relief lawyers will help you with the following:

• Determine If You Qualify: We assess your earnings, outstanding debts, and assets to determine if you qualify for Chapter 7 or 13 bankruptcy under Washington State's median income guidelines.
• Understand Your Legal Debt Relief Options: We break down bankruptcy alternatives under the U.S. Bankruptcy Code 11 U.S.C. Chapters 7 & 13 and Washington State laws.
• Handle All The Paperwork: We ensure all forms comply with Washington State's exemption laws RCW 6.15.010 and federal bankruptcy requirements.
• Protect Your Income And Assets Against Creditors: Filing bankruptcy triggers an automatic stay under 11 U.S.C. § 362, stopping collections, lawsuits, and wage garnishments.

As local Everett bankruptcy attorneys, we understand the challenges our neighbors face. From rising housing costs in Silver Lake to job uncertainties in business districts like downtown Everett, Paine Field, and the Everett Mall area, managing costs is tricky in our area. However, our bankruptcy lawyers have experience in Snohomish County courts. We know the judges, trustees, and local procedures that affect your case and have helped clients in neighborhoods like Bayside, Delta, and Westmont file for bankruptcy and rebuild their finances.

When facing debt in Washington State, you have debt relief options under federal and state bankruptcy laws. Here are the two bankruptcy options in Snohomish County for individuals without a business:

• Chapter 7 Bankruptcy (Liquidation): Governed by 11 U.S.C. §§ 701-784, Chapter 7 allows Washington State residents to clear most of their unsecured debts in a few months. To qualify for Chapter 7, you must pass the means test (11 U.S.C. § 707(b)), which compares your income to Washington State's median.
• Chapter 13 Bankruptcy (Reorganization): Under 11 U.S.C. §§ 1301-1330, Chapter 13 lets you restructure debts into a three-to-five-year repayment plan. It helps prevent foreclosure, catch up on mortgages, and pay priority debts like taxes or child support. Washington State's exemption laws under RCW 6.15.010 and federal rules determine how much of your income goes toward creditors.

Choosing the right bankruptcy path depends on your financial situation, income level, and long-term goals.

According to Washington State law RCW 6.15.010 and federal bankruptcy law 11 U.S.C. § 707(b), you qualify for Chapter 7 bankruptcy if you:

• Have a low enough income to pass the means test
• Have mostly unsecured debts like credit cards or medical bills
• Haven't filed Chapter 7 in the last eight years (11 U.S.C. § 727(a)(8))
• Own a few non-exempt assets

According to RCW 6.15.010 and 11 U.S.C. §§ 1301-1330, you qualify for Chapter 13 bankruptcy if you:

• Have a steady income to fund a repayment plan
• Owe within federal debt limits (11 U.S.C. § 109(e))
• Are current on tax filings for the past four years
• Haven't filed Chapter 7 in four years or Chapter 13 in two (11 U.S.C. § 1328(f))
• Can repay priority debts like taxes and child support

If you are still curious about whether you qualify for bankruptcy relief, contact our Everett law offices now. We'll review your case and let you know right away if you qualify.

Don't face debt alone. Our Everett bankruptcy lawyers will determine if you qualify for legal debt relief. Reclaim your financial future and start rebuilding your credit with our experienced legal support. Call now to schedule your free consultation with our attorneys who know Everett and Snohomish County bankruptcy courts.

In general, any person or business can file for bankruptcy. Businesses can not get a discharge in Chapter 7, but sometimes a business will file a Chapter 7 to allow a trustee to liquidate the business assets so the owners do not have to. If there are no business assets, it makes no sense to file a Chapter 7 – the business is simply dead and can not pay any debts. Most creditors require business owners to accept personal liability for business debts, which can be discharged in a personal bankruptcy after the business closes. Businesses that are in trouble and want to stay open usually have to file a Chapter 11.

The two kinds of consumer bankruptcy are Chapter 7 and Chapter 13. To file a bankruptcy you have to take a credit counseling class within 180 days of filing. This class lasts only two hours, can be taken on line and is fairly cheap. You can only file one Chapter 7 with a discharge every eight years. You can not get a discharge in a Chapter 13 filed within four years of a Chapter 7. The only people who can file bankruptcy together are married couples. Otherwise, anyone can file a Chapter 7 but you may later be disqualified if your income is too high and it is determined that you are abusing the bankruptcy system.

To determine whether a Chapter 7 debtor is abusing the bankruptcy system, you have to complete a “means test.” The means test looks at the income over the past six months. If that income is over the median income for the state and the debtor’s household size, a means test has to be filled out. The means test takes that income and deducts monthly expenses to determine whether the debtor should have some money left in the budget to at least pay some debt back. The means test deducts mortgage payments, health insurance, day care and other actual expenses and also deducts some expenses that are defined by the IRS tax repayment regulations, such as food, clothes, transportation and rent. If someone files a Chapter 7 and there is disposable income left after going through the means test, there is a presumption of abuse. This presumption can be overcome by citing special circumstances. Of course, basing your ability to pay debt by only looking back six months and basing your future ability to pay debts is not always going to work.

To qualify for a Chapter 13, you have to be able to propose a feasible plan. That means you need the income to fund it. If a debtor does not have the money to get caught up on a mortgage within five years, the plan may be deemed unfeasible. In some rare cases people have some property, such as a piece of real estate that is not a residence, that they do not want to lose in a Chapter 7. It can be protected in a Chapter 13 but only if the plan can pay the “liquidation value” of the property. For example, if a person inherited part of a vacation home with their brothers and sisters, and their share is $60,000 and they have no wild card exemption left to cover it, he or she can file bankruptcy and protect that property (and avoid problems with their siblings) if they can pay $1,000 per month for five years to cover what the creditors would get from the sale of that property. If this person just doesn’t have $1,000 per month to pay, he or she can’t file a feasible plan.

There are debt limits in Chapter 13 as well. If the debtor has over $1,081,400 in secured debt or $360,475 in unsecured debt the debt limit has been exceeded and the debtor has to file a Chapter 11. This form of bankruptcy is very expense. There are no debt limits for Chapter 7.