Because of the potentially life altering repercussion that Chapter 7 bankruptcy represents, Washington heads of household maintaining credit accounts of any size should consider themselves foolishly proud or dangerously stubborn for not at least investigating the expediency of bankruptcy protection regarding their own family accounts: the future happiness of their dependents might well rely on the validity of the findings. Given the concatenation of circumstances – unemployment going up and property values going down and consumer confidence hitting an all time low – that has befallen our proud state, there’s honestly few topics that should be of greater importance to Washington residents suffering under the weight of credit card bills or other unsecured loan burdens that they do not believe they could ever pay back. Even if the code of Washington debtors may shudder at the very thought of governmental protection regarding financial matters, the security of all too many of our citizens’ households’ domestic budgets may well be best ensured through bankruptcy programs, but the realities of Chapter 7 protection differ more than a bit from the assumptions held by ordinary Washington consumers. Should something be done it should well be done properly, and any financial transactions with such monumentally grave consequences for the Washington families as bankruptcy must be approached as one of the most significant turning points in any borrowers’ life. The aegis of Chapter 7 or Chapter 13 bankruptcy has long shielded the more desperate and reckless Washington households against the cold blooded advances of willfully aggressive lenders and their representatives, but, as with so many aspects of the greater society, bankruptcy protection has evolved and, in many ways, been weakened through the changes.
The expertise of trained professionals in declarations of such gravity should be considered utterly essential before the final determination of any Washington borrower, but, at the same time, all consumers reading this page who maintain any niggling curiosity about the guidelines informing bankruptcy may as well learn all that they can about the program before working through the reams of paperwork necessary for the declaration. Again, Washington borrowers shall find the assistance of well trained bankruptcy attorneys in the preparation of Chapter 7 or Chapter 13 petition documents instrumental throughout the process, and the advice of their lawyers shall be of particular importance during the initial decision making process. Legal counsel shouldn’t entirely be depended upon to prevent the forfeiture of property, still, nor should the Washington court trustee be expected to follow the spirit of the regulations rather than the endlessly twistable verbiage. To ensure the best chance of bankruptcy protection, Washington borrowers must be thoroughly open and straightforward in their consultations with the attorneys to see that everything goes smoothly. After all, no matter how adept at their craft and experienced in Washington bankruptcy regulations the lawyers may be, they can hardly be expected to protect their clients’ possessions and earnings or exploit the loopholes that exist in every governmental procedure (whether federal or legislated through the Washington state representatives) if the borrowers haven’t been told about every potential drawback or pitfall. The likelihood of borrowers being prosecuted for a failure to list every notable asset has escalated sharply over the past few years – even at the lower income levels Chapter 7 bankruptcy now necessitates – and criminal charges have become a very real threat for any Washington borrowers so reckless to risk submitting inaccurate data at the same time that they request governmental support.
The accuracy of the data entered within the bankruptcy petition should be a primary concern. No borrower wants to see their bankruptcy declaration rendered null and void days before the full discharge of all unsecured debts because one Washington court official discovered that a relatively minor aspect of the paperwork was improperly recorded. In the twelve months prior to the formal declaration of bankruptcy – the moment, after first taking and passing a government mandated credit counseling class, that the borrowers deliver their paperwork along with a two hundred and ninety nine dollar money order (cash nor credit nor personal checks are accepted) to their Washington county clerk’s office – debtors must be extremely careful about how they spend their money. Logical enough that the soon to be bankrupt should not make any extravagant purchases or attempt to hide their money in various accounts or investments as most borrowers should soon figure out for themselves. The professional debt analysts employed by the state of Washington to check bankruptcy petitions shall find even the most carefully hidden assets, and attempts to defraud the government would be a monumentally irrational undertaking. However, Washington borrowers intending to file for bankruptcy protection should also be aware of the dangers that could prevail upon those committing the most charitable or seemingly harmless actions. Funds given to family members – even Christmas or birthday presents for elderly parents or emergency loans to brothers and sisters fallen upon hard times; even, for that matter, loans repaid to friends and relatives – are viewed with especially harsh suspicion by Washington court authorities, and borrowers who’ve recently gifted a notable amount of money or a particularly generous object to someone in their family may even be encouraged to wait out the appropriate amount of time before filing for bankruptcy just so they won’t be forced to mention the transaction within the Chapter 7 paperwork.
Much of this, of course, depends upon the exemption plans invoked by the borrowers upon filing. As in every state, Washington residents declaring bankruptcy shall be able to choose between the exemptions set down by the federal government within the United States Bankruptcy Code and the rather more merciful slate enacted by the Olympia legislature. The local homestead exemption, for instance, protects home owners’ primary residences as long as the equity (recent appraisal value minus the amount of all mortgages, liens, and equity loans) is assessed to be under forty thousand dollars as opposed to the twenty thousand dollar exemption offered nationally. Furthermore, the household can protect two motor vehicles provided their values are considered less than twenty five hundred dollars a piece. All family clothes are rendered exempt but luxury items such as jewelry (including wedding rings), furs, and ornamental accoutrements must have a worth of less than one thousand dollars. Similarly, though family pictures and portraits and keepsakes are allowed regardless of resale value, the family library couldn’t be assessed at more than fifteen hundred dollars. Household goods and furnishings – kitchen appliances, bedroom and living room furniture, yard equipment, and the like – have a cap of twenty seven hundred dollars (doubled for couples), but existing staples such as comestibles and fuel wouldn’t be touched. There’s a separate catch all exemption for two thousand dollars worth of personal possessions not otherwise mentioned within the bankruptcy regulations, though borrowers utilizing the Washington slate couldn’t maintain more than two hundred dollars in cash or another two hundred dollars in a savings account or investment securities, and tools of trade and vocational implements utilized within the borrowers’ career would be capped at five thousand dollars’ total value. Physicians, clergy, and other specified professionals actually have a more detailed listing of what they could formally be expected to claim including office furniture and a relevant library.
There’s a good deal more written within the Washington state exemptions, but a complete inventory of the many statutes would be far too lengthy for the purposes of this essay. Every possible aspect of a Washington family’s financial life is seemingly covered – from fraternal society benefits to volunteer firefighter pensions to the funds resulting from personal injury claims apart from compensation for pain and suffering – with a monetary figure that one would assume to be arbitrarily chosen (sixteen thousand, one hundred and fifty dollars for the injury awards). A full and true register of all income sources from Washington households has become more important than ever before due to the new restrictions placed upon Chapter 13 bankruptcy following the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act which limited the eligibility requirements of the Chapter 7 debt liquidation bankruptcy program to only those borrowers who have made less than the median earnings for their state. Currently, for Washington residents, that income level stands at forty eight thousand dollars for a single wage earner, sixty thousand dollars for a household with two members, sixty eight thousand dollars for three, and seventy seven thousand dollars for four. Otherwise, borrowers – no matter the extent of their debt load – shall find that they’ll likely have no choice but to attempt to go through the Chapter 13 bankruptcy debt organization program which, aside from the sadly all too necessary automatic stay that has the power to immediately halt foreclosure proceedings, just subjects the household budget to judicial oversight for the rapid repayment of unsecured debt accounts barely decreased by the bankruptcy.
Though the Chapter 13 bankruptcy program contains all of the credit report nightmares of Chapter 7 (which permanently does away with all applicable credit and collection accounts not tied to governmental taxes or court mandated payments such as child support or, weirdly, student loans), there’s far less benefit to the program, and most Washington borrowers do not actually follow the court directives to discharge. When a situation like this is even a possibly threatening issue, debtors should beware of ignoring the amounts in their personal bank accounts for fear of retribution by the Washington courts. The data included within the bankruptcy petition and associated paperwork’s mustn’t contain even the slightest deviation from what the borrowers know to be true. Instead, they should make use of the extensive knowledge and skill sets of their Washington attorneys and inform them ahead of time of their precise financial situation in order to best be served by their attorneys’ knowledgeable counsel. Much as anything, lawyers are expertly trained in explaining just how households could best spend their money, and, while this tendency may end up costing Washington consumers a good deal of money during the process of bankruptcy, it’s nonetheless an invaluable resource for borrowers investigating the prudence of invoking Chapter 7 bankruptcy protection. Nevertheless, with those residents of Washington best able to make their way through ever narrowing gates of the Chapter 7 debt elimination program necessarily limited in funds (and, of course, beset at all turns by the harassment of lenders demanding the steady continuance of their account payments), many borrowers may find that they won’t be able to easily come up with the money demanded by the better law firms most experienced in wielding the United States Bankruptcy Code and the Washington regulations to their clients’ advantage.
Even as Washington debtors learn more and more about the problems inherent in Chapter 7 bankruptcy protection, however, new methods of resolving credit card bills and additional unsecured obligations have propagated throughout the northwest and all of the United States. With the clear intention to shift the strain of debt loads too heavy to bear toward a stable system that opens up inroads toward resolution of financial obligations, borrowers in Washington have begun turning to debt settlement negotiation as a method in which to relieve their overwhelming bills. Absent the malice of captious legal procedures and the potentially catastrophic repercussions to credit ratings that bankruptcy represents, debt settlement has been a richly deserved antidote to the many problems endemic to modern bankruptcy. Anyone residing within the state of Washington entrenched in the mire of debt hardship likely assumed that bankruptcy protection would always be there as a last resort. Those Washington families who fought long and hard to pay back their loans the traditional way – and, by doing so, essentially drained their bank accounts of the money needed for attorney fees and potentially even so weakened their credit ratings and Fico scores that other debt management avenues would be precluded – should feel especially injured by the governmental failings. Nevertheless, through the magic of debt settlement negotiation, Washingtonians ensnared in the barbs of debt obligations can attain freedom once again without suffering the intrusive penalties to credit and property that bankruptcy protection unfortunately portends. The entire process of settlement negotiation changes with the Washington borrowers’ needs, there’s too many variables to discuss midst an article of this nature, but, with free consultations available from any number of certified debt settlement negotiation web sites (try finding that from a worthwhile bankruptcy attorney), any resident of Washington worried about the limitations of bankruptcy would be well advised to investigate the program further.
The decision to reach out for help with your debt is not one that's easy to make. You were raised to "do the right thing", but now it’s nearly unbearable. You struggle along while your creditors are turning up the heat. And now you’re at the point where the late fees, penalties and interest expense make it impossible to keep your head above water.
Ask yourself this. If you could eliminate your debt without permanently damaging your credit, why wouldn't you?
