Written by Attorney Eva Bacevice.
Updated August 17, 2020
Bankruptcy news seems to be everywhere these days, including the Emerald City. Earlier this summer the well-known Seattle-based company Restaurants Unlimited, which operates 35 restaurants in six states, filed for Chapter 11 bankruptcy protection. The company has been struggling since 2017 and closed six locations before filing bankruptcy in Seattle two years later. Whether you work at one of the still-open restaurants and are concerned about your job security or have financial issues otherwise, you might be thinking about exploring a personal bankruptcy. Any individual Seattleite (or married couple filing jointly) can seek bankruptcy protection under Chapter 7 or Chapter 13.Chapter 7 is what you think of as a traditional bankruptcy, also referred to as a liquidation. When you file Chapter 7 bankruptcy in Seattle you will be aiming to walk away from most or all of your debts to get a clean financial slate going forward. Some debts, such as child support payments, are non-dischargeable, meaning they survive the bankruptcy. If the bulk of your debts are unsecured (like credit card bills and medical bills) you can discharge those entirely at the end of your case and no longer be obligated to make payments. Chapter 7 is a fairly quick process as the case will generally complete in about four to six months. Chapter 13, on the other hand, is a longer commitment. Chapter 13 is known as a “reorganization,” which is similar to a personal Chapter 11. With Chapter 13 you will submit a payment plan that runs from a minimum of three to a maximum of five years to catch up on some of your debts, most often a secured debt (like a mortgage), if you’ve have fallen behind and are facing possible foreclosure or repossession. Chapter 13 plans are more complicated but you can seek help through legal aid if you find yourself in these circumstances. You might decide that you want to hire an attorney to assist you regardless of whether you are planning to file for Chapter 7 or Chapter 13, or if you want help to determine which is better for your circumstances. If you are thinking about filing a Chapter 7 bankruptcy in Seattle and hoping to do so on your own, you can partner with Upsolve to help you through the process and provide you with helpful resources.,
Seattle Bankruptcy Lawyers - Estimated Cost
If you find yourself considering filing bankruptcy in Seattle your first thought might be to reach out to an attorney for assistance. Many lawyers who specialize in bankruptcy law will offer a free initial consultation, so you can check it out without making a full commitment. It might be helpful to meet with an expert to see if Chapter 7 or Chapter 13 is a better fit for your circumstances. It can also be helpful to confirm if you are looking at a straightforward Chapter 7. If you do decide to hire an attorney for your Chapter 7 case the cost of a bankruptcy lawyer in Seattle will likely be between $1,100 and $1,200, depending on your specific circumstances.
How to File Bankruptcy in Seattle, Washington for Free
If you decide that a Chapter 7 bankruptcy in Seattle is right for you but you don’t have the funds to hire an attorney, it is possible to move forward on your own (also known as “pro se”) to avoid incurring those costs. If your Chapter 7 case looks to be straightforward you can work with Upsolve for no cost to help guide you through all the steps of your Seattle bankruptcy.
Collect Your Seattle Bankruptcy Documents
The first step to take towards a successful Seattle bankruptcy case is to collect your bankruptcy documents. This will include documents you will need to prove your identity (such as a driver’s license and social security card) as well as documents that will help confirm your eligibility to file for Chapter 7 bankruptcy in Seattle, such as your last two (ideally six) months of paycheck stubs. You’ll also need specific documents to assist you in filling out your bankruptcy forms. For example, if you own your home you may need documents that prove ownership (like the deed) and will have to show the balance of any loans against it (like your most recent mortgage statement). Similarly, if you own a car, you will need documents proving ownership (like the title) as well as recent statements for any loan(s) on the vehicle and proof of insurance. You’ll also need to fully list all of your debts, so obtaining a free copy of your credit report can be a big help to make sure you include all of your creditors and their collection agencies and have a clear idea of the amount owed before filing bankruptcy in Seattle.
Take Credit Counseling
The next task is to complete your first credit counseling course. There are two credit counseling courses required for your Chapter 7 bankruptcy in Seattle. One has to be completed before filing bankruptcy in Seattle; the other is taken during the case. You will want to use a credit counseling agency approved by the Western District of Washington Bankruptcy Court. Many agencies will offer package deals to pay for both courses for your Washington bankruptcy at the same time, usually for around $50. Many agencies offer their services online or over the phone, but if you prefer to go in person you can look to either Money Management International, Inc or American Financial Solutions of North Seattle Community College Foundation, both located in Seattle.
Complete the Bankruptcy Forms
Once you have collected your documents and completed the first credit counseling course you can turn to filling out your Seattle bankruptcy forms. If you are working with an attorney, they will usually have you fill out a questionnaire to gather the information they need to fill the forms out on your behalf. If you are filing on your own, you can use the Upsolve questionnaire which will populate into the proper forms and/or take advantage of the Chapter 7 Bankruptcy Form Package provided by the Western District Court. This forms package will include all of the necessary forms for your Chapter 7 bankruptcy in Seattle, along with instructions and examples to assist.
Get Your Filing Fee
The next challenge is to get together your filing fee. The current cost for filing a Chapter 7 bankruptcy in Seattle is $335. You will need to have the amount in full at the time you file your Washington bankruptcy, in cash (exact change) or certified funds, like a money order or cashier’s check. If you can’t afford to pay the filing fee all at once, or even at all, there are a couple of options. First, if you can show that your income is less than 150% of the federal poverty guidelines then you can request a waiver of the filing fee from the Court. Second, if you don’t qualify to request a waiver, you can fill out an application to pay the filing fee in installments. Just note that you must pay it in full within 120 days after filing bankruptcy in Seattle and in four or fewer payments; otherwise you risk having your case dismissed.
Print Your Bankruptcy Forms
After your Seattle bankruptcy forms are complete you’ll need to print a copy to give to the Court when you file your case. Make certain to print on one side only as the Court will not accept double-sided paperwork. If you have access to a printer at home or work, it’s a good idea to print an extra copy of your Seattle bankruptcy forms for your records. If you don’t have easy access to a printer you can try going to the Seattle Public Library where you can print your documents for a small fee or try a local Office Depot.
Go to Court to File Your Forms
Once you have completed and printed your forms you will need to file them with the Court to officially begin your Washington bankruptcy case. You should bring along the printed forms, your certificate of completion for the first credit counseling course, the filing fee, and proof of identity, such as a driver’s license or State ID. The United States Bankruptcy Court Western District has a location in Seattle located at 700 Stewart St., #6301. It’s best to go in person in case a simple correction is needed so that you can be assured that your Chapter 7 bankruptcy in Seattle is properly filed.
Mail Documents to Your Trustee
After your Chapter 7 bankruptcy in Seattle is filed with the Court you will be assigned a bankruptcy Trustee to oversee your case. The Trustee will require that you provide documents in preparation for your Meeting of Creditors and these documents must be received at least 7 days before the meeting. You will likely hear from your Trustee directly with a list of documents that they want, usually documents that back up the information that you provided in your Seattle bankruptcy paperwork. You should plan to include all of the items listed in the Court’s “Chapter 7 Debtor(s) Requirement” which includes paystubs or proof of income for the last six months, financial account statements, your most recent federal tax return and a signed declaration for the above documents.
Take Bankruptcy Course 2
After your case has been filed and you have provided documents to your bankruptcy Trustee, it’s a good time to complete the second credit counseling course required for your Chapter 7 bankruptcy in Seattle. Remember that you need to use an agency approved by the U.S. Trustee for Washington bankruptcy cases. If you purchased the courses in a bundle, you’ll want to return to your original agency. It’s important to ask the agency if they will submit your certificate of completion to the Court for you, or if you will need to file it on your own. If it is the latter you will file it at the same location as your original case documents, so that it’s properly reflected on the docket of your Seattle bankruptcy case.
Attend Your 341 Meeting
The next step for your Chapter 7 bankruptcy in Seattle is to attend your 341 Meeting of Creditors. This meeting will be before your Trustee. This meeting is less formal than a court hearing before a judge, but you still might be a bit nervous. The best thing to do in that situation is to prepare for the meeting so that you know what to expect. Usually, the Trustee will ask questions based on the information you stated in your Seattle bankruptcy paperwork as well as the supporting documents you supplied. The Trustee’s intention is to verify that the information submitted is true and correct. Once they are satisfied, they will conclude your meeting. At that point, you simply need to wait to receive your discharge, which is the point in the case where you are released from your (now) former financial obligations.
Dealing with Your Car
If you own or lease a car you will no doubt want to determine how filing bankruptcy in Seattle will affect that. The answer will depend on several factors, beginning with whether you are current on your car payments, if any. If you are behind in your payments, filing a Chapter 7 bankruptcy in Seattle will likely mean surrendering your car, since there is no way to catch up on missed payments. Surrendering your car in this circumstance may be the best option, especially since you can walk away from the continuing obligation to pay as well as any missed payments and late fees. If you’re current on car payments, you will have a few more options. First, you will need to determine the equity in your car to determine if you can protect it. You can start with finding the fair market value (FMV) from Kelley Blue Book or NADA based on the make, model, mileage and condition. Then you subtract any remaining loans from the FMV to determine your equity. If that amount is less than the total amount you can protect with available exemptions, you can keep the car. If you decide that you want to keep the car the creditor for the car loan will likely ask that you sign a reaffirmation agreement to keep making the payments after the bankruptcy case is over.
Washington Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Seattle
Washington Means Test
In order to file Chapter 7 bankruptcy in Seattle, you will need to prove that you are eligible through the Washington bankruptcy Means Test. You can pass the Means Test in two ways. First, you can pass based on income limits, if your household income is less than the median income for a Washington family of the same size. Second, you can go through a full Means Test calculation to show that, based on your income and reasonable monthly expenses, you have very little or no money left at the end of the month and can’t pay even a portion of your debts.
Median Income Levels for Washington
Washington Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
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Poverty Levels for Washington
Washington Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
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Washington Bankruptcy Forms
Your Washington bankruptcy forms are the standard federal forms, without any specific local forms. The Western District Court offers a Chapter 7 Bankruptcy Form Package with all the necessary Seattle bankruptcy forms included as well as instructions and examples.
Bankruptcy laws allow you to protect your possessions through the use of exemptions. Washington state offers a choice between the federal bankruptcy exemptions and the Washington bankruptcy exemptions, and you can choose whichever makes the most sense for your Seattle bankruptcy.