Are you drowning in debt and being threatened by collection agents? Filing bankruptcy may be a solution for those who have a lot of debt. Individuals can save homes and vehicles from foreclosure and repossession by filing. Talk to a Bankruptcy Lawyer In Puyallup WA about saving your property.
What Is Bankruptcy?
Bankruptcy is a process wherein creditors are dealt with and the debtor gets a fresh financial start. Consult with a Bankruptcy Lawyer In Puyallup WA about filing. You’ll need a list of all debts and creditors’ addresses. Further, the lawyer needs to see W-2 forms and a list of the debtor’s assets. The main consumer bankruptcies are Chapter 7 and Chapter 13. Chapter 7 uses liquidation to pay some of the filer’s debts. On the other hand, debts are reorganized with a Chapter 13.
Chapter 7 Is Not Easy
The bankruptcy court wants consumers to be responsible. Therefore, filers must prove they don’t have sufficient income to pay creditors. Chapter 7 eliminates a lot of consumer debt but not all. Some debts stay with the debtor like income taxes, child support arrears and student loans. The court appoints a trustee to oversee the liquidation process. The state decides which property is exempt from liquidation. However, most debtors are able to keep their home and a vehicle.
Reorganize Your Debt
Chapter 13 allows debtors to reorganize debt and keep their property. However, debtors must have a regular source of income to file Chapter 13. The bankruptcy trustee looks at what the debtor owns and how much money they make. This figure is balanced against what is owed to creditors. This is how the court decides the amount of the monthly payment which is divided among creditors. Mortgage and car payment arrears are added into the total amount of debt.
Unfortunately, Chapter 13 filers do not have a lot of disposable income left over. Current payments must be made along with the payment to the Bankruptcy Court. Indeed, filers must live frugally over the course of the bankruptcy which is usually three to five years. Chapter 7 and Chapter 13 bankruptcies stay on a person’s credit report for several years. Nonetheless, consumers have the ability to start over financially.