Stop All Lawsuits and Repossession Actions

When you are face to face with lawsuits, repossession actions, or creditor harassment, it can sometimes feel like there’s no way out. Fortunately, Washington State offers several legal options for Tacoma residents to stop these actions.

One of the most effective ways to do so is by filing for bankruptcy. In doing so, you can protect yourself from all of this and find a solid financial footing in the process.

The right Tacoma bankruptcy attorney can explain how bankruptcy can stop all lawsuits and repossession actions and will guide you through the entire process.

The moment you file for bankruptcy, an automatic stay goes into effect and stops all collection actions, including lawsuits, repossession, wage garnishments, and creditor calls. Here is a brief breakdown of what this means for you:

• Automatic Stay (11 U.S. Code § 362): The moment you file for bankruptcy, an automatic stay stops your creditors from pursuing legal action against you. This includes lawsuits, collection calls, and repossession efforts.
• Repossession Protection (RCW 6.15.010): If you’re facing a repossession of a vehicle or other property, bankruptcy can prevent that from happening. The automatic stay stops repossession actions temporarily, and it might even be permanent in some cases if you can catch up on payments through Chapter 13.
• Legal Actions (RCW 19.36.020): The Washington State Bankruptcy Code says that all lawsuits, including judgments, stop when you file for bankruptcy. Creditors can’t continue current lawsuits or initiate new ones during the bankruptcy process.

In Tacoma, Washington, you will find two main types of bankruptcy: Chapter 7 and Chapter 13. Here’s how both can help you stop lawsuits and repossession actions against you:

Chapter 7 bankruptcy, also commonly known as a liquidation bankruptcy, provides the opportunity to discharge your unsecured debts, such as credit card bills, medical bills, and personal loans. It can also stop lawsuits and repossession actions.

• Quick Process: It is usually resolved in approximately three to six months, and then you can get your fresh start.
• Debt Discharge: Most of your unsecured debts are completely discharged, and you will no longer be responsible for paying them.
• No Repayment Plan: Unlike Chapter 13, Chapter 7 doesn’t require that you create any kind of repayment plan. So, once your debts are discharged, you’re free.
• Exempt Property (RCW 6.15.010): A lot of your personal assets, like your home, car, and household items, may be exempt from liquidation. This means you can keep your essential belongings.
• No Ongoing Payments: Once your debts are discharged, that’s it. You will have no more ongoing payments to creditors, and you have the chance to start rebuilding your financial future.
• Temporarily Protects Against Foreclosure: Chapter 7 can delay foreclosure actions, so you have the time to explore other options like selling or refinancing.
• Reduced Stress: When you eliminate overwhelming debt and stop creditor actions against you, you will find great emotional relief.

The means test is a big part of the bankruptcy process and determines whether you qualify for Chapter 7 or Chapter 13. It compares your household income (an average over the last six months) to the median income for a household of your size in Washington.

• If your income falls below the threshold, you should qualify for Chapter 7.
• If your income is above the median, you may still qualify, but you’ll need to go through a more detailed means test.

If your income is above the median, there will be a calculation of disposable income. This takes into account your monthly income and essential expenses.

• Allowed Expenses: You can deduct housing costs, utilities, transportation, healthcare, and child support payments.
• Disposable Income: After deductions, you need to file for Chapter 13 if you have significant disposable income left.

Chapter 13 Bankruptcy, also known as a reorganization bankruptcy, allows you to retain your property while reorganizing all of your debt.

• Debt Repayment Plan: Chapter 13 gives you the chance to reorganize and pay your debt over three to five years, making it easier to manage your payments and catch up.
• Keep Your Property: Unlike Chapter 7, Chapter 13 lets you keep your home, car, and other valuable property by including them in your repayment plan. You can do this even when you’re behind on the payments.
• Cure Defaults on Secured Debt: If you have fallen behind on your mortgage or car payments, Chapter 13 lets you catch up, preventing foreclosure (RCW 61.24) and repossession.
• Discharge Unsecured Debts: After you complete your repayment plan, the remaining unsecured debt is discharged, giving you a clean slate.
• Creditor Protection: Chapter 13 provides you with strong legal protection from creditors. This ensures they can’t pursue collection actions against you during the repayment period.
• Flexible Payment Terms: The payments are based on your income and expenses, meaning you can probably reduce your monthly payment amounts to make the plan more manageable.
• Improved Credit Over Time: Completing your repayment plan can gradually improve your credit over time.

While bankruptcy can certainly offer relief from lawsuits and repossession actions, you should still consult one of our skilled Tacoma bankruptcy attorneys to ensure the process is handled accurately. We can guide you through all your options, protect your rights, navigate complex laws, and ensure all paperwork is filed correctly.

You don’t have to take on these challenges alone. Consulting a qualified attorney is a good first step toward a fresh financial start.