Bankruptcy in Woodinville, Washington is a court process which allows an individual or business who is drowning in debt to be relieved of their legal obligation 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 obligation. 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 prudent to speak with a good Woodinville, 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 Woodinville attorney's advice is truly indispensable.
Types of Bankruptcy in Woodinville, Washington
In Woodinville, Washington, 3 types of bankruptcy procedures are in common use: Chapter 7, Chapter 11, and Chapter 13. Being governed by federal law, the procedures involved in filing for bankruptcy in Woodinville, Washington will be about the same as anywhere else in America. Chapter 7 bankruptcy requires the debtor to liquidate some of his or her assets in order to pay off as much debt as possible. Once the sale of the assets is complete, and the proceeds handed over to the creditors, the debt is viewed as discharged. Liquidation is basically selling assets to the highest bidder. Not all of the debtor's assets will need to be sold, and many types of property are totally or partially exempt, including homes, cars, retirement accounts, and insurance policies. This means that the debtor can keep them. It should be noted that some types of debts are not dischargeable in Chapter 7 bankruptcy, including student loans, criminal fines, taxes, and child support payments. Even when the bankruptcy process is complete, these debts will have to be paid in full.
The other form of bankruptcy most commonly used in Woodinville is Chapter 13. It allows a person to pay off their debt over a longer period of time, often consolidating it into one periodic payment. In this system, the amount of money the debtor owes is not actually reduced, but the payment of the debt is made far more manageable. This gives the debtor some breathing room, allowing him to continue to earn a living while gradually paying down his debts, and gives some security to creditors that they will eventually collect all or most of what they're owed. Chapter 11 bankruptcy is primarily used by businesses, though it can be used by individuals (which is quite rare). Chapter 11 bankruptcy requires that the debtor come up with a reorganization plan - essentially telling the court how they propose to cut costs, streamline their operations, and pay their debts. This plan must be approved by the participating creditors through a simple majority vote.
One advantage of Chapter 11 bankruptcy is that it allows a business going through it to continue operations, and to trade its stock.
How Can a Woodinville Bankruptcy Lawyer Help?
The need to weigh all the options and consider the costs and benefits of filing for bankruptcy in Woodinville cannot be overstated. If you are considering filing for bankruptcy, it would be a good idea to speak with a Woodinville bankruptcy attorney beforehand.