Individuals and businesses sometimes find themselves in difficult financial situations. When that happens, one question commonly asked is “Should I file bankruptcy?” There is no easy answer to that question. Your situation is different than every other person that is considering filing bankruptcy.
Before making a decision, an experienced bankruptcy attorney can provide an analysis of your situation and the options available to you. At Luce, Lineberry & Kenney PS, our attorneys will work with you to help you understand how to protect your rights while accomplishing your goals. For some, a Chapter 7 or a Chapter 13 bankruptcy is the best option. For others, a short sale, deed in lieu of foreclosure or foreclosure mediation might be the right answer.
We offer a complimentary bankruptcy consultation to residents of Pierce, King, Kitsap, Thurston and Snohomish counties. We also offer a $150 consultation for distressed homeowners which comprehensively covers alternatives including short sale, foreclosure, foreclosure mediation, deed in lieu of foreclosure, tax implications, etc.
What is Bankruptcy?
Bankruptcy is a federal court process whereby an individual legally declares himself or his business unable to repay outstanding debts in order to obtain a fresh start. Bankruptcy is designed to help qualifying consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. Filing bankruptcy immediately stops all creditors from seeking to collect debts from individuals or businesses, at least until such debts are sorted out according to the law. Bankruptcies can generally be described as “liquidations” or “reorganizations.”
What can Bankruptcy do for you?
- Eliminate the legal obligation to pay most or all of your debts.
- Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.)
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
- In certain instances, bankruptcy will allow you to strip a second mortgage.
What Can Bankruptcy Not Do?
Bankruptcy, however, cannot cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
- Eliminate certain rights of “secured” creditors. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payment over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. However, you generally cannot keep the collateral unless you continue to pay the debt.
- Discharge certain types of debts singled out by the bankruptcy law for special treatment such as child support, alimony, student loans, court restitution orders, criminal fines, and some taxes.
- Protect co-signers on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the co-signer may still have to repay all or part of the loan.
- Discharge debts that arise after bankruptcy has been filed.
Often our clients are nervous regarding the process of bankruptcy but it is our job to take care of all issues that may come up and provide a clear explanation of what you are to expect from start to finish!
Our law office provides a free one hour consultation, with an attorney, for matters pertaining to bankruptcy. You can schedule an appointment to come in to talk with an attorney and ask all the questions you’d like at no obligation.