What are the costs?
Currently, the filing fee is $299 for a Chapter 7 and $274 for a Chapter 13.  Two classes are required, and the debtor must pay about $25 per class. Attorney fees are $1800 for a Chapter 7, and $3500 or more for a Chapter 13. Some hourly work may be charged on more complicated matters.
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Is it a lot harder to file for bankruptcy than it used to be?
No, although some changes have made it more cumbersome. In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") went into effect.  Many people believe that bankruptcy relief is no longer available, but that is not the case.  Some of the most important changes from the old law are explained below.

Means Test for Chapter 7 Eligibility
Under the new bankruptcy law, you may not be eligible for Chapter 7 bankruptcy if your average income over the past six months is higher than the Washington state average for a household of your same size. If, after deducting your allowed expenses (as determined by IRS standards) from your average income over the past six months, you have disposable income (which may not be equal to your actual disposable income) that would allow you to pay $100 per month to a Chapter 13 plan, you would be shifted to a 5 year repayment plan in Chapter 13. Debtors can get around this requirement if they can demonstrate "special circumstances that justify additional expenses or adjustments of current monthly income. In practice, very few debtors are precluded from filing a Chapter 7 under the new law.

Mandatory Credit Counseling
Under the new bankruptcy law, you may not file a bankruptcy case unless you have received credit counseling from an approved nonprofit budget and credit counseling agency within 180 days prior to filing.

Mandatory Debtor Education
Under the new bankruptcy law, you can be denied your discharge, under both Chapter 7 and 13 if you have not completed an education course in personal financial management.

Time Between Discharge in a New Case
Under the new bankruptcy law, you cannot receive a new Chapter 7 discharge for eight years after you received a discharge in a prior Chapter 7.
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Please tell me the difference between chapter 7 and 13?

CHAPTER 7 INFO
Chapter 7 bankruptcy is sometimes called liquidation bankruptcy -- it cancels your debts, but you might have to let the bankruptcy trustee sell some of your property to repay your creditors. You will get to keep any exempt property, which usually includes household goods and clothing, and similar items.

By filing for bankruptcy, you are technically placing the property you own and the debts you owe in the hands of the bankruptcy court. You can't sell or give away any of the property you own when you file, or pay off your pre-filing debts, without the court's consent. However, with a few exceptions, you can do what you wish with property you acquire and income you earn after you file for bankruptcy.

In every Chapter 7, the court appoints a bankruptcy trustee. The trustee's primary duty is to see that your creditors are paid as much as possible on what you owe them. And the more assets the trustee recovers for creditors, the more the trustee is paid.

At the end of the bankruptcy process, most of your debts are discharged by the court. That means that you no longer owe your creditors, except for debts that automatically survive bankruptcy, unless the court rules otherwise (for example, child and spousal support, most tax debts, and student loans), and debts that the court has declared nondischargeable because the creditor objected (for example, debts incurred by fraud or malicious acts).

CHAPTER 13 INFO
Chapter 13 is often called the wage earner bankruptcy. Chapter 13 is designed for people with regular income who desire to pay their debts, but are currently unable to do so. Any person, even those who are self-employed or who own an unincorporated business, are eligible to file for Chapter 13 bankruptcy, so long as you come within the debt limits imposed by Chapter 13.

The concept behind a Chapter 13 bankruptcy is that you (and your spouse, if any) make sufficient income to pay all of your current living expenses (e.g., rent, food, utilities, transportation, clothes, etc.) and have some money left over to apply to your debts. You will submit a Chapter 13 plan in which you set out a budget detailing your take-home pay and monthly living expenses. You pay the excess income to the bankruptcy trustee who then pays the money to your creditors. The plan lasts for at least 36 months unless your debts are paid in full in a shorter time. The payment period may be extended beyond 36 months (but not over 60 months), if you need the extra months to pay enough on your debts to have the plan approved by the Court. At the end of the Chapter 13 plan, any amounts still owing on your unsecured debts are forgiven. In certain cases, Chapter 13 allows you to lower the amount of your loans or give you a lower interest rate on certain loans. If you have a secured loan like a mortgage, deed of trust, or car loan that you are behind on, Chapter 13 allows you to catch up the amount you are behind over time.

Chapter 13 is usually preferable for a person who:
- wishes to save an asset, typically a house or car, from foreclosure, by curing the defaults over time,
- wishes to repay all or most of his or her unsecured debts and has the income with which to do so within a reasonable time,
- has valuable nonexempt property or has valuable exempt property securing debts, either of which would be lost in a chapter
   7 case,
- is not eligible for a discharge under chapter 7,
- has one or more substantial debts that are dischargeable under chapter 13 but not under chapter 7, or
- has sufficient assets with which to repay most debts, but needs temporary relief from creditors in order to do so.
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Anything I really need to know?
Before you can file bankruptcy, you must obtain credit counseling from an accredited agency. A list of accredited agencies can be found at the United States Trustee's website, found in the "links" section of this site.

You must file all of your back tax returns before the first meeting of creditors, with one short extension.

You must provide a copy of your latest tax return or a transcript at least 7 days before the meeting of creditors or the case "shall" be dismissed.

You should try to avoid filing before collecting any tax refunds, as tax refunds received within 180 days after filing must be paid to the trustee.
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Do my spouse and I both need to file?
No. In some cases where only one of you has debts, or under other conditions, it might be advisable to only have one spouse file. Since Washington is a community property state, even if only one spouse files, all of the couple's community property may be subject to your bankruptcy.
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Can I keep my possessions? My car?
You are entitled to protect your possessions using exemptions under either federal or state law. You can protect some equity in your residence ($125,000 under Washingtonlaw), vehicles, household goods, life insurance, retirement plans (including IRA's and your 401(k)), clothing, and some items related to your job. If you don't own a residence, or have very little home equity, you might be able to use the federal exemption protection for personal property. You can, in most cases, reaffirm your auto loan or keep an auto lease in place, and keep your car.
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Will the calls and collection actions stop?
One of the major benefits of filing for protection under Chapter 7 is that most creditor actions are stayed, or stopped. This means that debt collection efforts, garnishments and foreclosure are stopped. As soon as a creditor becomes aware that you have filed for bankruptcy, the creditor must stop all efforts to collect the debt. If there is an ongoing garnishment or foreclosure, you should tell us so that we can contact the creditor immediately. A creditor wishing to proceed with action against the debtor or its property must obtain permission from the Court. If the creditor continues to try and collect once they become aware of the bankruptcy, they may be liable for court sanctions, damages and attorneys fees.
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Can foreclosure be stopped?
A foreclosure is stayed by a chapter 7 or a chapter 13. To keep the house, past due amounts must be paid and the mortgage obligations must be reaffirmed.
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What about future credit?
You can get credit after a bankruptcy. It will generally be on less favorable terms, and you will not likely be able to obtain as much. Bankruptcy has a negative impact on your credit that can take on less significance over time. The bankruptcy filing will remain on your credit for 10 years. We can help you understand how to rehabilitate your credit.
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Are any debts not discharged?
The following types of debts are generally non-dischargeable:
- Debts owed to a spouse, former spouse or child for alimony, maintenance and support, or property settlement agreements
- Debts that the Bankruptcy Court determines are non-dischargeable because of fraud, false pretense, misrepresentations or
   willful and malicious injury to property
- Debts for fines, penalties or restitution for criminal activity
- Most taxes
- Debts that you did not schedule
- Debts for damages for driving while intoxicated
- Student Loans
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Do you consult for free?
Yes, we provide a free hour consultation.