Are you drowning in debt with no relief in sight? If so, consider filing Chapter 7 in Tacoma Wa. Filing bankruptcy gives debtors a much-needed fresh start. Here are a few tips to make filing go smoothly.
Chapter 7 or Chapter 13
Chapter 7 filers must prove that they cannot repay their debt. They are asking the court to sell some assets to repay certain debts. However, many debts will be discharged. On the other hand, Chapter 13 is called the wage-earners plan. This allows the debtor to make a monthly payment towards resolving their debt. These filers get to keep most assets.
Everyone must go through credit counseling prior to filing. The counseling helps to determine if a filing is really necessary.
Do Not File On Your Own
Once a bankruptcy is filed, the Judge issues a temporary stay. This means all collection activities must cease. However, the debtor needs to complete the necessary forms to file. It is advisable to hire an attorney to handle the paperwork.
The government wants a description of the debtor’s property and a list of debts and assets. Further, Chapter 7 in Tacoma Wa filers must state what property they want to exempt.
Chapter 7 means liquidation
Chapter 7 is a liquidation bankruptcy. The court trustee may sell many of the filer’s assets to pay off debt. However, each state allows debtors to keep some property. The attorney will be able to explain the exemption process.
Basically, the value of one’s assets determines how much property filers can exempt. Generally, most states allow the filer to keep some home equity and personal property. The personal property includes things like a bank account or a car.
Chapter 13 Is Difficult
Chapter 13 filers attempt to repay current debts and arrears. For instance, past-due mortgage and car payments will be rolled into the bankruptcy. They must make the current payments in addition to the monthly bankruptcy payment.
Indeed, the debtor will not have a lot of leftover disposable income. Hence, filers must live frugally during the three- to five-year bankruptcy period. Chapter 7 and 13 bankruptcies remain on a person’s credit report for several years. However, that is a small price to pay for a clean financial start. Learn more by talking to an attorney.
