The new bankruptcy laws. You can still qualify.
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The new bankruptcy laws and filing for bankruptcy in Everett, Washington.
The new federal and Washington State bankruptcy laws.
You can still qualify. Let us show you how!
You may be aware that congress passed sweeping changes to the nation’s bankruptcy laws in 2005. Many people believed that some were abusing the bankruptcy laws by having their all their debts canceled when they could afford to pay something.
The good news, however, is that over 90% of people still qualify for bankruptcy in our experience. Our Everett bankruptcy attorneys are very familiar with the new bankruptcy laws. The most significant change in the bankruptcy laws has to do with how the bankruptcy court decides whether someone can afford to pay at least some portion of their debt to their creditors.
Because a Chapter 7 case allows someone to pay cancel, or “discharge”, their debts without paying anything, the purpose of the law was to force some people with higher incomes into a Chapter 13 repayment plan, where they make monthly payments for five years to pay at least some of their debt.
Our Everett bankruptcy lawyers can help you to understand the most important part of the new laws during your initial consultation. This is the means test.
The "Means Test". What it means to you.
The way Congress tried to divide the people who can’t pay anything back from the people who can pay something back was to require people making more income than average for their area to go through a test, called a “means test”, to show that they don’t have any money left at the end of the month after paying for all their necessities. What is considered a “necessity” is defined by the IRS repayment standards.
The means test is very complicated and now more than ever, people should hire a bankruptcy attorney to avoid any unpleasant surprises. Our Everett bankruptcy attorneys have handled numerous means test cases under the new law. We know the new laws. And, we know what the bankruptcy courts are looking for in your petition.
Our Everett, WA bankruptcy lawyers have the skills to explore your situation in detail and help you avoid having to go into a repayment plan or, if you must, we can put together a repayment plan with the lowest payment possible.
There were many other changes to the laws as well. Now people filing bankruptcy must disclose more information to the court, such as pay stubs, tax returns and bank statements. The time limits between filing a bankruptcy increased.
The new credit counseling requirement.
You are also now required to take credit counseling and financial responsibility classes to file bankruptcy. Additionally, our Everett bankruptcy attorneys are also now expected to investigate their clients situation more to verify the accuracy of what they tell the bankruptcy court. The filing fee is more expensive.
One positive change for our clients in Washington state is that the Washington legislature increased the amount of equity you can keep in your home to $125,000. That means the court can’t force you to sell your home to pay part of your debt in a Chapter 7 unless you have over $125,000.00 in equity in your home.
This new law was criticized by a lot of people as giving away too much to creditors, especially credit card companies who lobbied heavily for the bill. This criticism has given many people the impression that you can no longer discharge credit card debt, medical bills or other types of debt.
But this is simply not true. Our Everett bankruptcy lawyers will help you to understand that bankruptcy remains a very powerful financial tool for wiping out most, if not all of your unsecured creditors. Imagine never paying your credit card bills or your medical bills EVER AGAIN! If you qualify, we can make it happen.
Though the new law has made bankruptcy more complicated, it is still very much an available option to someone in financial trouble. However, under the 2005 law, it is more important than ever to hire an experienced Everett bankruptcy lawyer to help you though the process.
Let us help you and your family put your financial crisis behind you.
Our Everett bankruptcy attorneys have the skills and experience to help you get the most out of your financial fresh start.
Call now to learn more.