Bankruptcy Basics
What can bankruptcy do for me?
Bankruptcy law changes in 2005
The most recent significant changes to the bankruptcy law occurred as of October 17, 2005. Although the bankruptcy law changes further complicated the process, the bankruptcy process still provides relief to individuals who need help in resolving their creditor issues. When an individual calls the office, they will be transferred to speak directly to the attorney if available and the initial in-person consultation also is with the attorney. In order to provide information as to the best options, you will be asked questions, including (but not limited to):
Jurisdiction & Exemptions
If you have lived in Washington for the last 730 days (two years), you have the option of selecting exemptions under Washington state law or Federal law. If you have not lived in Washington for the last 730 days, your exemptions would be based on where you lived 180 days prior to the last 730 days. If you have not lived in Washington for the last 730 days, let me know and we can determine which exemptions would apply in your case. This issue has the potential of being complicated, so I highly recommend that you consult with an an experienced bankruptcy attorney.
Income (Means Test)
Check your total household income against the chart below. You must include all household income including wages for a non-filing spouse, child support and all other income. If your household income is below the state median listed below you have a much better chance of a successful Chapter 7 bankruptcy. If your income exceeds the state median income the means test applies and we would need to examine your expenses to see if you are eligible for a Chapter 7 bankruptcy. This is a complex test, and the advice of an attorney practicing bankruptcy law is highly recommended.
Washington Annual Median Income
1 Person - $56,365
2 People - $68,505
3 People - $78,227
4 People - $86,782
(add $8,100 for each additional household member)
The above figures are as of 11-1-15.
Income (Prior Six Months)
The bankruptcy law considers your previous income for the past six months, multiplied by two (to calculate an annual income). For instance, if you file in January, the means test would be based upon calculating gross income minus deductions for July through December for the previous year. The calculation may or may not accurately reflect your actual income, such as a new job, job loss or adjustment in pay.
Class #1 - Credit Counseling Certificate
(Must be done before filing., except under very limited situations)
You must complete a credit counseling class prior to filing bankruptcy. You can take the class online. The company that attorney Timothy Wilson recommends is www.debtorcc.org. The current cost for the first class is $14.99 and the price is the same whether filing single or married.
Correct Creditor Addresses & Account Numbers
The new bankruptcy law requires that you give notice to creditors at the address that appears on your bills. You must bring all of your bills to the office so that we can properly notify each creditor and include the account number. If you do not have your bills, you should pull complete credit reports including all creditor addresses at the credit report agencies: www.equifax.com, www.experian.com, and www.transunion.com. You can obtain all three credit reports at one website at: www.annualcreditreport.com.
Pay Stubs from Work
Seven (7) months' pay statements are needed to calculate your income for the past six months. If you have lost a pay stub you can ask your employer for another copy. If you do not receive pay stubs you may be able to go online with your employer and print something off showing gross wages, deductions, net income etc.
Most Recent tax returns
You must bring copies of your most recent state and federal tax returns to my office so I can provide those to the trustee. If you filed federal tax returns but do not have copies, tax transcripts can be ordered from the IRS.
Class #2 - Financial Management Certificate
(Must be done after the bankruptcy filing but before the bankruptcy discharge)
After your bankruptcy is filed you must take the second class on financial management. Again, you can take this online or on the phone and it costs $9.95 if taken through www.debtoredu.com.
Divorce & Back Child Support Debt
If you owe money ordered paid in a divorce decree or back child support, it is not discharged in bankruptcy.
Creditors Meeting Requirements
You must bring a government issued photo ID (drivers license is best) and your social security card or proof of social security number such as an original W2 tax form. At least seven days prior to the 341 meeting of creditors hearing, you must provide to the trustee assigned to your case a true and correct copy of your most recently filed tax return, 60 days' pay statements or other proof of income such as profit and loss statements if self employed, and your bank statement for all checking and savings accounts that covers the date of filing and the previous thirty days.
Don’t be Alarmed
A successful bankruptcy is more challenging than it used to be but it can be done! If you are conscientious, we have a very good chance of getting your case through successfully. If I don’t think your case will by successful, I will tell you up front.
Call today for a free consultation to discuss your bankruptcy options, including either a Chapter 7 or Chapter 13, at office locations in Federal Way, Puyallup or Tacoma.
- Eliminate the legal obligation to pay most debts, including credit card debt, medical bills, personal loans, judgments and other debts, by filing either a Chapter 7 (straight bankruptcy) or Chapter 13 (reorganization).
- Stop the foreclosure of your home and give you the opportunity to catch up on missed payments in a Chapter 13 case.
- Stop wage and bank garnishments upon the filing of the case, and potentially recover the funds garnished in the 90 days prior to the bankruptcy filing.
- Resolve tax issues, by discharging taxes that can be discharged in either a Chapter 7 or Chapter 13, or pay the nondischargeable taxes in a Chapter 13 case plan to keep the IRS from garnishing wages.
- Stop collection lawsuits, harassing phone calls and other collection actions upon the case filing.
- Reinstate a driver's license in a Chapter 7 case if the license is suspended due to the WA Financial Responsibilities Act (no insurance) or file a Chapter 13 to reinstate a license if it is suspended due to unresolved tickets.
Bankruptcy law changes in 2005
The most recent significant changes to the bankruptcy law occurred as of October 17, 2005. Although the bankruptcy law changes further complicated the process, the bankruptcy process still provides relief to individuals who need help in resolving their creditor issues. When an individual calls the office, they will be transferred to speak directly to the attorney if available and the initial in-person consultation also is with the attorney. In order to provide information as to the best options, you will be asked questions, including (but not limited to):
- whether you are single or married;
- whether you have ever filed a bankruptcy and if so when and under which bankruptcy chapter;
- the size of the household (kids, other dependents);
- the current income, the income for the past six months and income for the past two years;
- the amount and nature of the debt, such as credit card debt, medical bills, personal loans, tax debt, payday loans, etc.;
- if you have a mortgage or car loan, whether you are current or behind on payments;
- what significant assets you have, such as real property, vehicles, boats, motorcycles, bank account balances, tax refunds, other financial accounts, and other significant assets;
- whether you have a claim against anyone such as a motor vehicle claim medical malpractice claim, work related claim, or other claim regardless whether you have retained an attorney;
- whether you have a right to an inheritance;
- whether you have paid back any friends or family debts in the past year;
- whether you have any tax debt, and if so for which years;
- whether you own a business;
- whether you have transferred any assets in the past several years.Each situation is different. For instance, if you own real property, it will be important to know when you purchased the property, whether you are current or behind on payment, the mortgage balance(s), whether there are co-owners of the property, and the value of the home and the method of obtaining the value. It is important to obtain as much information as possible to determine whether a bankruptcy is in your best interest and if so whether the bankruptcy should be filed as a Chapter 7 or Chapter 13.
Jurisdiction & Exemptions
If you have lived in Washington for the last 730 days (two years), you have the option of selecting exemptions under Washington state law or Federal law. If you have not lived in Washington for the last 730 days, your exemptions would be based on where you lived 180 days prior to the last 730 days. If you have not lived in Washington for the last 730 days, let me know and we can determine which exemptions would apply in your case. This issue has the potential of being complicated, so I highly recommend that you consult with an an experienced bankruptcy attorney.
Income (Means Test)
Check your total household income against the chart below. You must include all household income including wages for a non-filing spouse, child support and all other income. If your household income is below the state median listed below you have a much better chance of a successful Chapter 7 bankruptcy. If your income exceeds the state median income the means test applies and we would need to examine your expenses to see if you are eligible for a Chapter 7 bankruptcy. This is a complex test, and the advice of an attorney practicing bankruptcy law is highly recommended.
Washington Annual Median Income
1 Person - $56,365
2 People - $68,505
3 People - $78,227
4 People - $86,782
(add $8,100 for each additional household member)
The above figures are as of 11-1-15.
Income (Prior Six Months)
The bankruptcy law considers your previous income for the past six months, multiplied by two (to calculate an annual income). For instance, if you file in January, the means test would be based upon calculating gross income minus deductions for July through December for the previous year. The calculation may or may not accurately reflect your actual income, such as a new job, job loss or adjustment in pay.
Class #1 - Credit Counseling Certificate
(Must be done before filing., except under very limited situations)
You must complete a credit counseling class prior to filing bankruptcy. You can take the class online. The company that attorney Timothy Wilson recommends is www.debtorcc.org. The current cost for the first class is $14.99 and the price is the same whether filing single or married.
Correct Creditor Addresses & Account Numbers
The new bankruptcy law requires that you give notice to creditors at the address that appears on your bills. You must bring all of your bills to the office so that we can properly notify each creditor and include the account number. If you do not have your bills, you should pull complete credit reports including all creditor addresses at the credit report agencies: www.equifax.com, www.experian.com, and www.transunion.com. You can obtain all three credit reports at one website at: www.annualcreditreport.com.
Pay Stubs from Work
Seven (7) months' pay statements are needed to calculate your income for the past six months. If you have lost a pay stub you can ask your employer for another copy. If you do not receive pay stubs you may be able to go online with your employer and print something off showing gross wages, deductions, net income etc.
Most Recent tax returns
You must bring copies of your most recent state and federal tax returns to my office so I can provide those to the trustee. If you filed federal tax returns but do not have copies, tax transcripts can be ordered from the IRS.
Class #2 - Financial Management Certificate
(Must be done after the bankruptcy filing but before the bankruptcy discharge)
After your bankruptcy is filed you must take the second class on financial management. Again, you can take this online or on the phone and it costs $9.95 if taken through www.debtoredu.com.
Divorce & Back Child Support Debt
If you owe money ordered paid in a divorce decree or back child support, it is not discharged in bankruptcy.
Creditors Meeting Requirements
You must bring a government issued photo ID (drivers license is best) and your social security card or proof of social security number such as an original W2 tax form. At least seven days prior to the 341 meeting of creditors hearing, you must provide to the trustee assigned to your case a true and correct copy of your most recently filed tax return, 60 days' pay statements or other proof of income such as profit and loss statements if self employed, and your bank statement for all checking and savings accounts that covers the date of filing and the previous thirty days.
Don’t be Alarmed
A successful bankruptcy is more challenging than it used to be but it can be done! If you are conscientious, we have a very good chance of getting your case through successfully. If I don’t think your case will by successful, I will tell you up front.
Call today for a free consultation to discuss your bankruptcy options, including either a Chapter 7 or Chapter 13, at office locations in Federal Way, Puyallup or Tacoma.
