Washington bankruptcy law
An individual may file for bankruptcy for many reasons including, unforeseen medical expenses, losing a job, or just plain mindless spending. Contrary to chapter 9 what most people think is that bankruptcy doesnt redeem you of all debts. You are still responsible for alimony, child support, recent back taxes, student loans, luxury goods worth more than $550 that are bought within 90day of filing, fraudulent debts and cash advances of $825 within 70 days of filing. In Washington you can either file for Chapter 7 or Chapter 13.
Chapter 7 is also known as liquidation and is the simplest form of bankruptcy that is available to individuals, married couples and businesses. The court appoints a trustee which gathers and sells your non-exempt property and distributes the proceeds among the creditors. Most Chapter 7 cases that are filed fall under the no asset category, which means you do not possess any non-exempt property for the trustees to sell.
Federal bankruptcy laws require you to take a means test which is used to determine if you are eligible to file bankruptcy. Another factor that will be deciding your eligibility in the state of Washington is your income. If it is below the median income for families in the state, you will be eligible. If you make more than the median income, then your income for the last six months is considered including your mortgages, back taxes, child support, school expenses and car payments. Your filing will be declined if even after considering these expenses and living expenses provided in Internal Revenue Services national collection standards, you are able to pay at least $6,000 to your creditors for five years. Once you are rendered ineligible for Chapter 7 bankruptcy, your only choice is Chapter 13. The median family income data will be applied for all cases filed after February 1, 2007. The data will be restructured once the Census Bureau updates the data. In Washington, the median income for a single earner is $45, 156 ; for a family of two it is 456,126l; for three $60,597; and $74,432 for four.
Median for cases filed before March 31, 2007 can be obtained by adding $6,300 for every additional individual in excess of 4 and for cases filed after April 1, 2007, adds $6,900 for each additional individual. Individuals who are planning to file for bankruptcy must also obtain approved credit counseling and file any overdue tax return within a week. On April 20, 2005 President Bush passed the Bankruptcy Abuse Prevention Consumer Protection Act. This law serves to limit the individual access to US bankruptcy courts by placing restrictions on Chapter 7, increased Chapter 13 payments, new deductions against debtors with increased penalties and the reduction. The law caused a few changes in the creditor priority, child support and alimony got increased priority over any other creditor, even over tax owed. If an individual is owed back support, it is of prime importance that they file a proof of claim with the court to receive their payment
Other Articles
