Spokane bankruptcy attorneys, Hector and Casey Quiroga, can help you discharge most of your debt using Title 11 of the United States Code. Most consumers seek the relief of the bankruptcy code under Chapter 7 and/or Chapter 13. There are many differences between each Chapter, and in some circumstances, the client’s objectives, will dictate if a Chapter 13 is preferable to a Chapter 7.
A Chapter 7 usually achieves a discharge of most consumer debts. A Chapter 13 will achieve a discharge, but only after a Chapter 13 plan is confirmed and completed. This process may take anywhere from three to five years, depending on each client’s circumstances and ability to pay into a plan.
To qualify for Chapter 7, a debtor’s household must be a. below certain (means) gross income, and b. the debtor’s household must also have no disposable income left after taking into account all allowable expenses.
The debtor’s household income requirements are changed from time to time. The most updated income requirements are found on the Department of Justice website. At the time of publication, this is the most updated gross income requirements to file a Chapter 7 in Washington and Idaho. A debtor’s household must earn below the following to meet requirement “a” outlined above.
|State||1 earner||Family Size|
|2 People||3 People||4 People *|
|* Add $8,100 for each individual in excess of 4.|
If a debtor’s household meets step a. (earns below the per family size amount above), then it must also show that there is no or very little disposable income after taking into account all allowable expenses. Spokane bankruptcy attorneys often look at the disposable income requirements after they have all income information available (i.e. paystubs for the last six months) to determine if the disposable income requirements will be an issue for the client.
They must also look at the expenses presented by this particular family and determine if they are allowable under the law.
The Department of Justice (U.S. Trustee’s office is designated to oversee bankruptcy filings, and it is under the direction of the Department of Justice), publishes the national standards allowable under the law. Some of these expenses can be higher, but Spokane bankruptcy attorneys need to properly document to the court the reason for the discrepancy.
If a debtor’s household income is more than the guideline above (in the table) AND/OR the debtor’s household does have disposable income after paying all allowable expenses, the debtor will likely have to file a Chapter 13. Chapter 13 cases require payments to creditors and the office of the Chapter 13 trustee.
They are often significantly more expensive, and take significantly more time (three to five years by statute). For this reason, most consumers would rather file Chapter 7 than Chapter 13 if they qualify.
You should discuss your personal situation with one of our Spokane bankruptcy attorneys before making a determination what chapter you can file or should file based on your circumstances (if you qualify). Call (509) 927-3840 to make an appointment or click here to send a message.
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(509) 927 3840
505 N. Argonne Rd., Suite B-109, Spokane Valley, WA 99212