Federal Way, WA Chapter 13 Bankruptcy Lawyer

There are many reasons why a person might get behind on their bills. Perhaps you lost your job, had a medical emergency, or simply overextended yourself financially. Whatever the case may be, if you are having a hard time keeping your head above water, it may be time to consider bankruptcy.

There are two types of personal bankruptcies under federal law: Chapter 7 and Chapter 13. If you earn a regular income and meet other criteria, you may be able to file for Chapter 13 bankruptcy. This type of petition will allow you to protect assets while paying off all or part of your debt over 3 to 5 years, often for cents on the dollar.

While there are many advantages to a Chapter 13 bankruptcy, the process is far more complicated than a Chapter 7 filing. A skilled Federal Way, WA Chapter 13 bankruptcy lawyer can help you through the process, starting with a free initial consultation. Reach out to the Law Office of Richard D. Granvold PS  today to learn more about how we can help you.

Do I Qualify for Chapter 13 Bankruptcy?

Chapter 13 bankruptcy is named after a section of the United States Bankruptcy Code. It is often referred to as a wage earner’s plan, as it allows an individual with regular income to develop a plan to repay all or part of their outstanding debt (often cents on the dollar). Through a Chapter 13 bankruptcy plan, a debtor can repay their debt in installments over a 3 to 5 year period of time.

To qualify for Chapter 13 bankruptcy, you must meet certain criteria. Specifically, you must be an individual with regular income, who has less than $419,275 in unsecured debts (such as credit card bills or personal loans) and $1,257,850 in secured debts (such as mortgages or car loans). With some limited exceptions, you must also have engaged in credit counseling within 180 days of filing for bankruptcy.

In addition, you must be current on your tax filings, and cannot have filed for Chapter 7 or Chapter 13 bankruptcy within the past 4 years. You also cannot have filed a bankruptcy petition within the previous 180 days that was dismissed for certain reasons, such as failure to comply with court orders.

If you meet these criteria, then you may be able to file for Chapter 13 bankruptcy with the help of a skilled Federal Way, WA bankruptcy lawyer. The process begins with filing a petition in the bankruptcy court where you have a domicile or residence. Along with the petition, you will typically need to file:

  1. Schedules of assets and liabilities;
  2. A schedule of current income and expenditures;
  3. A schedule of executory contracts and unexpired leases; and
  4. A statement of financial affairs.

A number of other documents must be filed with the court, such as a certificate of credit counseling, a debt repayment plan, evidence of payment from employers, a copy of your most recent tax return, and a statement of monthly net income and anticipated increase in income or expenses after filing.

The bankruptcy court charges a fee for bankruptcy filings.  However, that $313 filing fee is often paid after filing the petition in most cases as it can be normally included in your plan payments.   In addition, if you hire an attorney to help you through the process, you will also be responsible for paying their fees.

Compiling the necessary information to file a petition for Chapter 13 bankruptcy can be time-consuming and challenging. Working with a Federal Way, WA Chapter 13 bankruptcy lawyer is the best way to ensure that your documents contain all of the necessary information and are filed appropriately.

How Does Filing Bankruptcy Help?

Filing for bankruptcy is a last resort for most people. However, if your debts are overwhelming, then filing for bankruptcy may allow you to get a fresh start.

A Chapter 13 bankruptcy is similar to Chapter 11 bankruptcy for businesses. Unlike Chapter 7 – which liquidates all assets except for those specifically protected – Chapter 13 bankruptcy safeguards assets against repossession or foreclosure. The repayment plan typically requests forgiveness of other debts.

Importantly, a Chapter 13 bankruptcy will not eliminate all debt. Certain types of debts are not dischargeable in bankruptcy, such as child support and alimony payments, most student loans, and some types of taxes. However, a successful petition for Chapter 13 bankruptcy will clear many other types of debt.

One major advantage of Chapter 13 bankruptcy is that it will suspend any current foreclosure proceedings on your home. While it will not eliminate your mortgage debt, a bankruptcy plan may allow you to free up enough of your income to be able to make regular mortgage payments and keep your home.

As with any other type of bankruptcy, a Chapter 13 bankruptcy can affect your credit score and ability to borrow money in the future. A seasoned Federal Way, WA Chapter 13 bankruptcy attorney can walk you through the process and advise you of the best options to resolve your debt.

How Can an Attorney Help?

You are not required to have an attorney to file for Chapter 13 bankruptcy. However, statistically, most chapter 13 filings without an attorney never result in a discharge. However, in comparison to the more simple (and extreme) Chapter 7 bankruptcy process, filing for Chapter 13 bankruptcy is far more complicated and labor-intensive. For this reason, it is vital to work with a seasoned bankruptcy attorney (NOT a paralegal or typist) for your bankruptcy.

As an initial matter, the court must confirm (approve) your Chapter 13 bankruptcy repayment plan.  Without legal knowledge and special software to develop a repayment plan, it is unlikely that a court will confirm your bankruptcy.

In addition, certain aspects of a Chapter 13 bankruptcy – such as eliminating unsecured junior liens through lien stripping or reducing the interest rate on a car loan with a cramdown – require legal assistance. These actions require you to file a motion or adversary proceeding with the bankruptcy court. Most people will need a bankruptcy lawyer to help them with this process.

The United States Courts strongly recommend working with an attorney when filing for personal bankruptcy. In addition to helping you complete and file the necessary forms, your lawyer can counsel you on:

  • Whether you should file for bankruptcy;
  • Whether you should file for Chapter 7 or Chapter 13 bankruptcy;
  • Which debts can be discharged;
  • What property you will be able to keep after filing;
  • The tax consequences of filing for bankruptcy;
  • Whether you should continue to make payments to creditors after filing;
  • Bankruptcy law and procedures.

Filing for bankruptcy can be incredibly stressful. Working with a qualified Federal Way, WA Chapter 13 bankruptcy lawyer can make the process much easier for you, allowing you  to focus on moving forward with a repayment plan – and life after bankruptcy.

Considering Bankruptcy? Reach Out Today.

There comes a point in many people’s lives where it simply isn’t possible to repay your debt. If you are struggling to make payments on your debt, bankruptcy may be the best way to get out from under-crushing debt. Our law firm can help.

The Law Office of Richard D. Granvold PS has handled more than 8,600 bankruptcy cases in Western Washington.  Our law firm has the skill and knowledge to help you achieve your goals in personal bankruptcy. To learn more or to schedule a free consultation with a Federal Way, WA Chapter 13 bankruptcy lawyer, give us a call at 253-289-3511 or fill out our online contact form.