Do I Qualify?

If you find yourself up against a great deal of debt and can’t find a clear way out in Vancouver, Washington, you should know you aren’t alone. Many others feel the same way. However, there is a light at the end of the tunnel, and there are ways you can get the fresh start you need. One such way to do so is by filing for bankruptcy. So, determining whether you qualify or not is a great first move.

Another positive move in the right direction is seeking out the assistance of a qualified Vancouver bankruptcy attorney. They can help you determine if you qualify and which type of bankruptcy would be right for your situation.

Bankruptcy is a legal process you can explore that lets you eliminate or repay your debts under the protection of the federal bankruptcy court. Here are the two most common types you will come across:

• Chapter 7 Bankruptcy: This is also known as liquidation. It allows you to discharge most of your unsecured debts, like your credit card bills, medical bills, and personal loans. However, your non-exempt assets can be sold to repay your creditors.
• Chapter 13 Bankruptcy: This type of bankruptcy requires you to create a repayment plan that can be completed over a three- to five-year period. It is often chosen by those who have a steady income but can’t keep up with their debts.

In Vancouver, Washington, knowing whether you qualify for Chapter 7 or Chapter 13 is important. A Vancouver bankruptcy attorney can help you understand which type fits your financial situation.

In both types of bankruptcy, not all of your debts are treated equally. The law categorizes debt as either unsecured, secured, or priority, and each type is handled differently.

• Unsecured Debt: These include debts such as credit cards and medical bills. In Chapter 7, most unsecured debts are discharged, meaning you no longer have to repay them. In Chapter 13, you will pay back a portion of these debts through your repayment plan.
• Secured Debt: This includes mortgages and car loans. Chapter 7 could mean losing property tied to secured debts unless you can exempt it, while Chapter 13 allows you to keep secured property as long as you remain current on your payments under the repayment plan.
• Priority Debt: Certain debts, like child support and certain tax obligations, are non-dischargeable under bankruptcy laws. These must be paid in full, regardless of the type of bankruptcy.

• Your income must be below the median for your household size in Washington State.
• The Means Test checks if your income is too high to qualify for Chapter 7. If your income is above the state median, you may not qualify; however, this can be verified with the assistance of your Vancouver bankruptcy attorney.

• Washington State has exemptions that protect certain assets, like your home or car (RCW 6.15.010). However, non-exempt assets can still be sold to pay your creditors.

• If you filed for Chapter 7 bankruptcy in the last 8 years, then you can’t file again for another Chapter 7.

Chapter 13 involves creating a repayment plan to pay back your creditors over three to five years. Here’s what you need to know about qualifying:

• You must have less than $419,275 in unsecured debt.
• Your secured debt must be less than $1,257,850.

• Unlike Chapter 7, there are no income limits for Chapter 13. Instead, you must have a steady income to propose a repayment plan.

• In Chapter 13, you'll repay your creditors over time. The court will help set up your repayment plan based on your disposable income.

• Chapter 7: This bankruptcy type is ideal for those with little to no income and a lot of unsecured debts to pay off.
• Chapter 13: This is best for those with a steady income but need help repaying debts and keeping property.

In both cases, your Vancouver bankruptcy attorney can guide you through the process.

The bankruptcy process can be complex, so understanding these basic steps is important.

1. Pre-filing Counseling: Before you can even file for bankruptcy, you have to complete credit counseling with an approved agency.
2. Filing the Petition: You’ll file your bankruptcy petition in federal court. Make sure to include a complete list of assets, liabilities, income, and expenses.
3. Meeting of Creditors: A meeting with your creditors will take place, which allows them to ask you questions about your financial situation.
4. Discharge or Repayment Plan: In Chapter 7, debts are discharged, while in Chapter 13, a repayment plan is established.

Understanding if you qualify for bankruptcy in Vancouver, Washington, is the first step toward resolving your financial challenges. When you work with one of our skilled attorneys, you will have guidance from beginning to end so you can get to the fresh start you deserve.