Bankruptcy allows an individual or business to get rid of some or all of its debt. Typically, 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 substantially outweigh the costs. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Washington are often the identical as everywhere 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 Shelton, Washington bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Shelton, Washington
In Shelton, Washington, there are 2 common types of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 liquidates part 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 forms 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 basic personal items, like clothing. These assets are not available to creditors.
Once the qualifying property is sold, and the funds transferred to the creditors, the dischargeable debt is cleared. Some forms of debt, however, can't be absolved in Chapter 7 Bankruptcy in Shelton, Washington. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be absolved, Chapter 7 may not be the best choice for you.
Chapter 13 Bankruptcy in Shelton, Washington
Chapter 13 bankruptcy in Shelton, Washington is markedly different. It may or may not be a better option than Chapter 7, depending on the facts of your individual case. Chapter 13 does not excuse any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Shelton, Washington
Which Bankruptcy type to file under depends strongly on the facts of each particular case. If you have a stable stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a stable income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
In any case, it would be a good idea to consult a local bankruptcy lawyer in Shelton, Washington. Your lawyer can make an educated judgment as to what your best option is, and advise you accordingly (of course, the choice to file for bankruptcy is ultimately yours).