Bankruptcy in Spokane County, Washington is a court process which allows an individual or business who is drowning in debt to be relieved of their legal requirement to pay off some or all of their debt. Hopefully, this will allow both the debtor and creditors to move on with their lives. However, bankruptcy is not a free ride, allowing someone who simply doesn't feel like paying their debts to get out of that legal requirement. It is designed to prevent debt which has little chance of ever being paid back from ruining the life and finances of the debtor. It also carries significant long-term consequences, which must be carefully weighed against the potential benefits. For example, bankruptcy makes it very difficult for the debtor to obtain credit in the near future.
For that reason, it would be advisable to speak with a good Spokane County, Washington bankruptcy attorney. This attorney will be able to advise you as to whether or not filing for bankruptcy is a good idea, given your particular situation. This determination is highly dependent on the details of each individual case, so a Spokane County attorney's advice is truly indispensable.
Types of Bankruptcy in Spokane County, Washington
In Spokane County, Washington, there are three basic bankruptcy schemes that are most commonly used. They are known as Chapter 7, Chapter 13, and Chapter 11. Being a product of federal law, the procedural rules governing bankruptcy in Spokane County, Washington will be very similar to those in any other part of the United States. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her property, and use the funds to pay creditors. While this doesn't sound like much of a relief at first glance, the upshot is that once the eligible property is sold, and the proceeds directed to the creditors, all of the debtor's eligible debts are deemed paid in full, regardless of how much the creditors actually ended up getting. Not all of the debtor's property has to be sold off - the debtor will usually be allowed to keep things like a house, at least one car, some types of personal property, retirement accounts, and insurance policies. It should be noted that some debts are not dischargeable, and will have to be paid in full even if the debtor files for bankruptcy. This includes student loans, taxes, and criminal fines.
The other typically used bankruptcy system in Spokane County is Chapter 13 bankruptcy. This allows a debtor to repay most or all of their debts in a structured manner. It reorganizes the debt into lower periodic payments that, with a bit of frugality, the debtor should find manageable. This allows the debtor to continue to earn a living, and allows the creditors to eventually collect what they are owed. Once a repayment plan is authorized by the bankruptcy court, creditors are legally barred from seeking repayment under the terms of the agreements that gave rise to the debt in the first place, and will instead have to accept payment under the new plan. Chapter 13 bankruptcy is usually a better option for people who have a steady income. Though Chapter 11 bankruptcy can be used by individuals, it is almost always used by businesses. Similar to Chapter 13, Chapter 11 involves restructuring of debts, rather than complete discharge. The debtor is required to come up with a restructuring plan that lays out how it plans to cut costs, streamline operations, and pay its debts. The plan must then be authorized by a vote of participating creditors.
While going through Chapter 11 bankruptcy, a business can continue operating, and its stock can continue to be traded.
How Can a Spokane County Bankruptcy Lawyer Help?
One should not make the decision to file for bankruptcy in Spokane County easily. Before making any such decision, it would be highly advisable to contact an experienced Spokane County bankruptcy attorney.