Bankruptcy allows an individual or business to get rid of some or all of its debt. Generally, bankruptcy should only be considered when the debt is completely unmanageable, impossible to pay off, and there are no other options. However, in some cases, the benefits of bankruptcy can significantly outweigh the costs. Bankruptcy is governed by federal law and handled in federal courts, so the procedural and substantive rules involved in Washington are often the same as anywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Omak, Washington bankruptcy lawyer beforehand.

Chapter 7 Bankruptcy in Omak, Washington

In Omak, Washington, there are 2 main forms of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates some of the debtor's assets. It requires a certain percentage of the debtor's assets to be sold off to pay as much of his or her debt as possible. However, many types of property that most people own are exempt, meaning that they don't need to be sold. This often includes houses, vehicles, insurance policies, and essential personal items, like clothing. These assets are not available to creditors.

Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is excused. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Omak, Washington is not dischargeable, you might want to consider other options besides bankruptcy.

Chapter 13 Bankruptcy in Omak, Washington

In Omak, Washington, chapter 13 is very different from Chapter 7, and may or may not be the best option for you, depending on your situation. Chapter 13 Bankruptcy involves a court setting up an adjusted payment plan, which allows the debtor to pay off most or all of his debts over a longer period of time, through monthly payments that should, assuming that the debtor is willing to make a few sacrifices, be manageable.

Which Type of Consumer Bankruptcy Should I File in Omak, Washington

Chapter 13 is usually a good option for people who have a steady income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a steady income, Chapter 7 might be more beneficial.

Whatever your situation, you should speak with a local Omak, Washington bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely consequences, which will help you make a more educated decision.