Washington Bankruptcy Law
Washington bankruptcy practices laws that match federal laws and closely reflect some other state’s laws. Every state is unique when it comes to bankruptcy. Some states are stricter, and some states are more lenient when it comes to what exemptions they allow and what types of bankruptcy they offer. The state of Washington allows more exemptions than other states, but there’s no guarantee an individual or family can even receive these exemptions.
Washington Bankruptcy : Personal and Corporate
If a person or family want so file for Washington bankruptcy, they will either choose or be forced to file for either Chapter 7 or Chapter 13. If a corporation faces economic hardship, it may choose to file for Chapter 11.
WA Bankruptcy : Chapter 7
Chapter 7 bankruptcy works most efficiently for individuals or families with extremely large amounts of unsecured debt and low means to income. In order to qualify for Chapter 7, a person must pass a means test. The test examines the person’s annual income and even their living expenses. A person’s annual income must fall below the average household income in Washington, which is $55,584.
In recent years, and on a nationwide scale, it has become harder and harder to file for Chapter 7, but higher numbers of individuals are still allowed to file in Washington because of the state’s fairly high unemployment rate around 9.6%. If a person or family qualifies for Chapter 7, they may be entitled to the following exemptions:
• $125,000 homestead
• At least 75% of weekly earnings
• Vehicle up to $3,250 for individual
• Farming equipment up to $10,000
• Various pieces of personal property
• Food and fuel for comfortable living
• Wildcard up to $3,000
WA Bankruptcy : Chapter 11
If a corporation faces economic instability, the owner may choose to file for Chapter 11 bankruptcy. This measure allows the company to gather its finances, rearrange employees, and change essential logistics in order to allow for greater profit and less debt. The owner of the company usually oversees the initiative and reports back to a creditor and judge.
WA Bankruptcy : Chapter 13
A person or family can either choose or be forced to file for Chapter 13 bankruptcy if their household income falls above the state average and they can afford to make monthly payments. The greatest advantage to filing Chapter 13 involves a person being able to keep their home and assets while repaying up to 25% of their acquired debt over the next three to five years.
If a person files under Chapter 7, federal and state tax returns may be collected by a creditor. These assets are generally safe under Chapter 13, though. Backed taxes to the IRS or similar collection agency usually are not cleared by Washington bankruptcy.
Filing for Washington Bankruptcy
Like in most other states, a citizen of Washington must complete a credit counseling course six months before filing for Washington bankruptcy, and they must also show evidence of taking a debtor education before reaching a settlement.
You should also greatly consider hiring a lawyer if considering WA bankruptcy. A qualified Washington bankruptcy attorney can help you submit the right documents at the right time, and they can also help you reach the best settlement possible with your creditors. Your lawyer can help you submit the following documents:
• Attorney certificate
• Proof of income
• Proof of net monthly income
• Anticipated changes in income
• Educational individual retirement account
• Tax returns from most recent to as far back as four years