Bankruptcy Attorneys in Tacoma
Tacoma Bankruptcy Attorney

Tacoma Chapter 7 Bankruptcy Attorney

Erin M. Lane

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(253) 778-6952
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Tacoma, WA Bankruptcy Lawyers

Can I qualify for Bankruptcy?

Qualifying for Chapter 7 bankruptcy in Tacoma, WA.

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Bankruptcy Attorneys in Tacoma, WA.

Who can file for bankruptcy in Tacoma, WA?

Under the bankruptcy code, “only a person that resides or has a domicile, a place of business, or property in the United States, or a municipality, may be a debtor under this title.”

Basically, any person or business in the United State can file bankruptcy. The question is whether it is the right chapter for you. You can only file on Chapter 7 every 8 years and have to wait four years after filing a Chapter 7 to file a Chapter 13 (assuming the first case went all the way through to a discharge).

You have to file a bankruptcy in the federal court district where you lived or owned property the majority of the last six months. If you have recently moved within the boundaries of one federal court district, you do not have to wait.

Many people would like to file the low cost and relatively quick Chapter 7. In most Chapter 7s, people can get out of bankruptcy in about three months without having to give up any property. To “qualify” for a Chapter 7, you have to show that you are not abusing the bankruptcy system.

What is the means test?

In 2005 Congress set up a “means test” to determine whether someone is abusing the bankruptcy system. The means test takes an average of your last six months earnings. If it is above the median income for your household size, then you have to fill out the rest of the means test. The median income for Washington as of November 15, 2013 is: $52,996 for a household of one, $63,409 for a household of two, $72,286 for three and $84,970 for four. Add $8,100 for each additional household member.

The means test deducts certain, defined monthly expenses from your six month average income. Some of these expenses are what you actually spend, such as your mortgage payment, day care, taxes, child support, health insurance and payments for secured debt. Some are set by the IRS repayment guidelines for payment of back taxes. These include food, transportation, rent, miscellaneous and out of pocket health care.

You can claim special circumstances to get out of the means test requirements. You can also document some expenses, such as out of pocket medical, if you feel you need more. If there is any money left over in the means test after deducting the expenses, that is the amount you pay to unsecured creditors in a Chapter 13 plan. If you try to stay in Chapter 7, you will face a motion to dismiss or convert your case to Chapter 13 for abusing the system. You still have a chance at staying in Chapter 7 if you can persuade the judge that you are not abusing the system, but there is a presumption that you are.

Qualifying for a Chapter 13 is easier. You have to be able to make the payments in a Chapter 13. You can not exceed the debt limit in a Chapter 13. As of April 1, 2013, those limits are $1,149,525 of secured debt and $383,175 of unsecured debt. If you can not file a Chapter 7 and you are over the debt limits of a Chapter 13, you have to file a Chapter 11, which is typically used for businesses.

Qualifying for Chapter 7 bankruptcy in Tacoma, WA is easy with the help from an experienced lawyer. Call our law office today and speak with a Tacoma Chapter 7 bankruptcy attorney for your free consultation. Get your questions answered, and see what options you qualify for!

Tacoma Bankruptcy Lawyers

Tacoma, WA bankruptcy lawyers. Call a Tacoma Chapter 7 bankruptcy attorney from our firm today to get the fresh start you need!

(253) 778-6952