Washington Bankruptcy Laws should be known by every resident of the state of Washington. When your expenses surpass your monthly budget it can financial wreak havoc. Before you know it, you’ve already been plagued by endless phone calls from creditors asking you to pay up, or worst, even threatening you. As much as you would like to fulfill your end of the bargain, the only choice left is filing for bankruptcy. Washington bankruptcy laws have stipulated that bankruptcy is open for all citizens eligible based on the criteria set forth by the US Bankruptcy Code and the state-specific laws.
A debtor’s duty is to educate himself on the rules and provisions of bankruptcy laws so he will know what to do and what to expect even if he won’t elect the services of a lawyer. The foremost requirement of the bankruptcy court before filing for bankruptcy protection is to attend a credit counseling seminar where you will be oriented on how to deal with your debts, as well as manage your money and develop budgets. The counseling seminar will help you find other alternatives for your financial woes. However, you should be careful in choosing the counseling agency to ensure that it is part of the US Trustee’s approved agencies. A credit counseling seminar should be attended for not more than 180 days before bankruptcy application.
For every debtor in trouble, filing for bankruptcy should be an informed decision. One of the foremost decisions you’re going to pay during bankruptcy application is to choose the appropriate program. There are two most common types of bankruptcy programs open for singles, married couples, and head of households: Chapter 7 and Chapter 13.
The first bankruptcy program is also known as liquidation bankruptcy where you will be given the chance to start anew financially. However, if you opt to choose this program, your non-exempt assets will be controlled by the trustee and sold off to pay your dischargeable debts. The proceeds of the sale will be divided among your creditors. Changes have been made to the criteria of Chapter 7’s eligibility in which the basis for admittance will now be the monthly income of the debtor instead of the amount of debts accumulated.
For regular income earners who failed to qualify for Chapter 7 because their monthly income is above the state median income of Washington, Chapter 13 is the other viable option. In this program, a repayment plan is proposed by the debtor upon submission of application. This plan is reviewed by the bankruptcy judge and should merit his approval before its implementation. The creditors may contest the details of the repayment plan but the final decision lies in the judge’s hand. A trustee duly approved by the bankruptcy courts will oversee the implementation of the repayment plan. His duty is to monitor that the debtor’s monthly payments collected and it is up to this trustee to distribute it to the creditors.
Although some assets will be liquidated, Washington bankruptcy laws have provided for a list of exemptions. The debtor may choose to use these state exemptions as it is more lenient. The following are the exemptions:
• A home worth $125,000;
• A vehicle for $2,500 and two vehicles amounting to $5,000 for a family;
• Household goods worth $2,700 for an individual and $5,400 for a family;
• Tools of trade worth $5,000;
• Family pictures and portraits; and
• Benefits like life insurance proceeds, disability benefits, and more.
Before deciding to file the necessary papers for bankruptcy application, consult the services of a lawyer.