The Rossback Law Firm

Bankruptcy Attorney Tacoma
Bankruptcy Lawyer Aberdeen Hoquiam

Chapter 7 and Chapter 13 Bankruptcy Attorney Services

Chapter 7 Bankruptcy

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A chapter 7 bankruptcy, sometimes called a “straight bankruptcy,” is a liquidation type bankruptcy. In this type of bankruptcy, a court appointed bankruptcy trustee will determine if he can sell any of the assets of the debtors to try and payoff at least some of the debts. 


A chapter 7 trustee generally cannot sell property covered by a debtor’s valid exemptions. Exemptions are laws which allow debtor to retain a certain dollar value of property free from creditors’ claims. A chapter 7 individual debtor can choose to claim exemptions allowed either by the Federal Bankruptcy Code or by the Revised Code of Washington. A debtor who is a business organization (such as an LLC or corporation) cannot claim any exemptions on its assets. 


Think of exemptions as a blanket that covers at least a portion of your assets. Whatever assets are under the exemption blanket cannot be sold by the trustee. Any assets not fully covered by the exemption blanket are subject to liquidation by the trustee, with the debtor being reimbursed for the portion of the asset that was claimed as exempt.  

It has been my experience, in most of my cases, that the assets of the average household of chapter 7 debtors are fully covered by exemptions. In such cases, the debtors will attend a single court hearing about a month after they file the petition called a 341 meeting or meeting of creditors, and will receive their discharge, which wipes out their dischargeable debts, 60 days after the court hearing. Thus on average, Chapter 7 bankruptcies last about 90 days from the filing of the petition. This timetable is fairly common in the realms of a chapter 7 bankruptcy; however, it is still a court proceeding and many other factors may expand this timeline. 


What can a Chapter 7 bankruptcy do for you? A chapter 7 bankruptcy can:

  • Stop Lawsuits and garnishments of wages or bank accounts
  • Stop endless harassing phone calls from debt collectors
  • Wipe out most kinds of debts
  • Allow you to recover garnished funds in some cases 
  • Get a fresh start


Contact  us to learn more about Chapter 7 bankruptcy in Tacoma or Aberdeen area today.

Chapter 13 Bankruptcy

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A chapter 13 bankruptcy, unlike a chapter 7 bankruptcy, is called an individual reorganization bankruptcy. This bankruptcy is only available to individuals. Business entities such as partnerships, corporations, or LLCs cannot file a chapter 13 bankruptcy. In bankruptcy speak, the term reorganization means a bankruptcy plan. In the case of a chapter 13 reorganization, the plan requires that the individual have sufficient regular income to fund the plan over a period of 3 to 5 years. Plan payments are usually taken directly from your wages and sent to the chapter 13 trustee. The Chapter 13 Trustee will then turn around and pay your creditors. Once you have made all of your plan payments to the trustee, your plan will be deemed complete, and in you will get a Chapter 13 discharge (unless you filed a chapter 7 bankruptcy within 4 years of the Chapter 13 bankruptcy and received a chapter 7 bankruptcy discharge from that bankruptcy).


Individuals file chapter 13 bankruptcy for a wide variety of reasons. Sometimes, they file a chapter 13 bankruptcy because they have enough money in their budget to repay at least a portion of their debts. Sometimes they have a non-exempt asset that a chapter 7 trustee might sell, and by filing a chapter 13 bankruptcy they can retain the assets while paying the non-exempt equity of said asset to creditors through the plan. Many people may elect to file a chapter 13 bankruptcy because they want to save their house from foreclosure by maintaining the contractual mortgage payments on the house and getting caught up on the back payments over the 3 – 5 year period of the bankruptcy plan. Chapter 13 bankruptcy plans also help folks to retain vehicles and to reinstate suspended drivers licenses so long as the will pay off any unpaid tickets or fines. 


What can Chapter 13 do for you:

  • Stop Lawsuits and garnishments of wages or bank accounts
  • Stop endless harassing phone calls from debt collectors
  • Wipe out most kinds of debts
  • Allow you to recover garnished funds in some cases 
  • Save your home from Foreclosure
  • Stop a vehicle repossession
  • Reinstate a suspended drivers license
  • Retain non-exempt assets 
  • Get a fresh start


Contact us to learn more about Chapter 13 bankruptcy at our Tacoma or Aberdeen area offices. 

YOU MAY BE WONDERING:

 

If I have already filed a bankruptcy, can I file another bankruptcy?

 

Can I remove a mortgage from my house with bankruptcy?

 

What happens if I file a chapter 13 plan, and later on I lose my job?

LEARN THE ANSWERS ON OUR FAQ'S PAGE

Contact us for a free no-obligation bankruptcy consultation