Written by Attorney Eva Bacevice.
Updated July 27, 2020
Jobs in Spokane have been hard to come by for some time now. Lilac City has ranked at or near the top of Forbes’ “Worst City for Jobs” in America rankings multiple times in the last decade. If you’re in financial difficulty because of the Spokane job market, it may make sense to consider filing bankruptcy to get some relief. There are plenty of reasons beyond just your employment to file bankruptcy as well, just look at Spokane City Councilwoman Karen Stratton who filed for bankruptcy with her husband earlier this year because of debts for tied to his law firm. Regardless of the reason, bankruptcy exists as a remedy for all people who might be in over their heads and could use a fresh start. Individuals (or married couples) can file either Chapter 7 or Chapter 13. Chapter 7 is what you probably think of as a traditional bankruptcy. Also referred to as a “liquidation” this is a bankruptcy where you are can walk away from some, or all, or your debts in a relatively short period of time (4-6 months.) If the bulk (or all) of your debts are unsecured, like credit card bills and medical bills, you can walk away from your obligation to pay them with a clean slate. Keep in mind, however, that there are non-dischargeable debts, such as child support, that you will still be responsible for paying. Chapter 13, also known as a personal reorganization, is similar to a business filing for Chapter 11. Chapter 13 allows you the opportunity to catch up with secured debt, like your mortgage, and avoid potential foreclosure if you can catch up on missed (and continue ongoing) payments through the plan. A Chapter 13 plan will run for a minimum of 3 and a maximum of 5 years, so it’s a much longer commitment than a Chapter 7 bankruptcy in Spokane. Generally, your circumstances will dictate which type of bankruptcy is best for you, and you can always seek free legal assistance to help make your decision. If your case is a relatively straightforward Chapter 7 and you decide to proceed, you can partner with Upsolve and use our Washington Bankruptcy Guide to help you through the process for your Spokane bankruptcy, step by step.
Spokane Bankruptcy Lawyers - Estimated Cost
As you consider filing bankruptcy in Spokane you may want to consult with a lawyer. The cost of a bankruptcy lawyer in Spokane is between $1,100 and $1,200 for a typical Chapter 7 case. Do keep in mind, however, that many bankruptcy attorneys will offer a free consultation, so you can meet with them without any obligation to continue. If it turns out that you do qualify for Chapter 7 and your case is pretty straightforward you might decide to move forward on your own, which is known as “pro se,” to avoid incurring the attorney fees. If so, Upsolve can be your partner for no cost to help guide you through the process.
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How to File Bankruptcy in Spokane, Washington for Free
It may turn out that Chapter 7 bankruptcy in Spokane is the right solution for your situation. If you decide to move forward with a bankruptcy, Upsolve will work with you to show you how to file bankruptcy in Spokane for little or no cost.
Collect Your Spokane Bankruptcy Documents
Before filing bankruptcy in Spokane, you will need to gather together the documents that will confirm your eligibility and help you fill out the paperwork. You’ll need documents that prove your identity, such as a driver’s license and social security card. You’ll also need your last two months of pay stubs or proof of income (although if you can provide six months that is better) along with your federal and state tax returns for the last two years, and the most recent statement for any financial accounts. You will also need any documentation related to ownership of a house (deed, mortgage statement(s), property tax statements, back water bill and proof of insurance) or ownership of a car (title, loan document(s), proof of insurance. Finally, since you’ll need to include a list of all of your debts for your Chapter 7 bankruptcy in Spokane, it’ll be helpful to obtain a free copy of your credit report to report this information completely and accurately.
Take Credit Counseling
Before filing bankruptcy in Spokane, you will need to complete the first of two required credit counseling courses. You must be certain to use agencies that are approved by the Eastern District of Washington. Many of these agencies will allow you to sign up for and pay for both courses at the same time, usually for about $50. All of the listed agencies offer phone and online options for your Washington bankruptcy, but unfortunately, none of them have a physical location you can visit in Spokane. The timing for the second course will be addressed later in this article, for now just hold off until after you’ve filed your case.
Complete the Bankruptcy Forms
The next step is to fill out your Spokane bankruptcy forms. The paperwork for your Washington bankruptcy will be a mix of federal forms and local forms. You can fill out a questionnaire on Upsolve that will populate your answers into the correct forms. You can also access both the federal and local forms on the Court’s website under the tab labeled “Code, Rules & Forms.” This is the part that will take the longest so you might want to set aside some time to complete it over a few days. It’s important to take the time you need to be sure that all of the information is accurate and complete since you’re signing the forms under penalty of perjury.
Get Your Filing Fee
The next task to complete will be to get together your filing fee. The cost to file a Chapter 7 bankruptcy in Spokane is $338. The full amount is due at the time of filing and must be paid in cash (exact change) or by certified cashier’s check, or money order made out to “Clerk, United States Court.” If you believe that the fee will prevent you from filing your Washington bankruptcy and your income is less than 150% of the federal poverty guidelines you can request a waiver of the filing fee. If your income is not sufficiently low to request a waiver you can also request to pay the filing fee in installments after the case is filed. Just be certain to pay in full within the allowed time frame of 120 days from filing bankruptcy in Spokane, or you risk having your case thrown out by the Court.
Print Your Bankruptcy Forms
After you have completed filling out your Washington bankruptcy forms you will need to print them out to submit them to the Court. When filing bankruptcy in Spokane be certain to print out all of your forms one-sided as the Court will not accept double-sided forms. If you have access to a printer at home, at a friend’s house, or at work, it’s a good idea to print an additional copy for your records. If you can’t easily access a printer, you can go to the Spokane Public Library and print out your forms for a very reasonable fee or go to a local Office Depot.
Go to Court to File Your Forms
You will need to bring your completed and signed Spokane bankruptcy forms, certificate of completion for the first credit counseling course, valid identification (like your driver’s license) and the filing fee to the Eastern District of Washington Bankruptcy Court. The closest courthouse for the Eastern District is located at 904 West Riverside Avenue Suite 304 in Spokane. It’s best to file your Washington bankruptcy case in person in case a quick correction is needed. The office is open on weekdays from 8:30 am to 4:30 pm, and closed on weekends and federal holidays, so make sure to plan accordingly.
Mail Documents to Your Trustee
Your Chapter 7 bankruptcy in Spokane will be overseen by a bankruptcy Trustee. The Trustee will require documents before your scheduled Meeting of Creditors, which, if not provided timely can delay your case. You should receive correspondence from your Spokane bankruptcy Trustee within a few weeks of filing your case with a detailed list of the documents to provide to their office. If you have not heard from your Trustee directly but have received your 341 meeting notice or other official documents with their contact information you can reach out directly to find out what documents to provide. At a minimum plan to send the past two years of your tax returns (both federal and state) and your most recent paycheck stubs so the Trustee receives everything at least seven days before your 341 hearing date.
Take Bankruptcy Course 2
After your case has been filed and your meeting date has been scheduled, you should plan to complete your second credit counseling course. Again, be sure to use one of the agencies that are approved by the Eastern District of Washington, and if you paid for your courses together you’ll want to make sure you use the same agency as before, so you’re not having to pay twice. You’ll want to find out if the agency will submit the certificate of completion to the Washington Bankruptcy Court on your behalf or if you will need to file it yourself. If it is the latter, you will need to file it with the Court at the same location where you originally filed your Spokane bankruptcy case.
Attend Your 341 Meeting
The next step in your Chapter 7 bankruptcy in Spokane will be to attend your Meeting of Creditors. This meeting will be before your Washington bankruptcy Trustee and is less formal than a hearing before a judge. That being said, you’ll want to prepare for the hearing so that it can go smoothly for you. The outcome you are seeking is for your hearing to be concluded, which checks another box in the process of getting bankruptcy relief. Here you’ll need to bring along proof of identification, such as your driver’s license or Washington State ID as well as proof of your social security number ready to hand to the Trustee when your case is called. Your Trustee will ask you questions about your bankruptcy forms to confirm that the information is true and accurate. The Trustee will also verify this against the additional documents you provided in advance. The meeting tends to be relatively quick, often concluding in about ten to fifteen minutes.
Dealing with Your Car
One issue that many people filing bankruptcy in Spokane have in common is wanting to know what will happen to their car. The answer will depend on several factors. If you owe back payments on your car when you file Chapter 7 bankruptcy in Spokane chances are you already came to terms with surrendering your car. The benefit to this is that you can walk away from the obligation to keep making payments on the vehicle as well as any missed payments or late fees. If you’re current on your car payments or own it outright the important factor to know is how much equity you have in the car. You can determine this by starting with the fair market value (FMV) based on the make, model, age and condition of the car according to Kelley Blue Book or NADA. If you still have a loan on the car, you can subtract that amount from the FMV to determine the equity. So long at the equity is less than the total you can protect with exemptions, you can keep the car. If you’re still making payments the lender may ask that you sign a reaffirmation agreement to keep the car and continue making the payments.
Washington Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Spokane
Washington Means Test
Before you can file your Chapter 7 bankruptcy in Spokane you’ll need to show that you qualify by passing the Washington bankruptcy Means Test. You can pass the Means Test in one of two ways. First, you can immediately qualify under the income limits if your household income is under the median income for a family of the same size in Washington. If you don’t pass on the first threshold you can also go through the Means Test calculation to show that there is no or minimal disposable income left at the end of the month after you pay your reasonable expenses.
Median Income Levels for Washington
Washington Median Income Standards for Means Test for Cases Filed In 2022
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Poverty Levels for Washington
Washington Fee Waiver Eligibility for Cases Filed In 2022
Eligible for fee waiver when under 150% the poverty level.
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Washington Bankruptcy Forms
When you are filling out the paperwork for your Chapter 7 bankruptcy in Spokane you will need to be certain to include the local Washington bankruptcy forms as well as the federal forms. In the Eastern District of Washington you may need to include the following forms: Declaration Regarding Payments along with your pay stubs, your Motion for Waiver of Credit Counseling Requirement (if you are disabled, active military status or otherwise unable to do so). Also make sure to check out the Court’s Matrix Format Guidelines to learn how to properly format your creditor mailing matrix.
When you file for Chapter 7 bankruptcy in Spokane, you’ll be able to choose which exemptions to apply to protect your possessions. Your options are either federal bankruptcy exemptions or the Washington bankruptcy exemptions. Generally, your personal circumstances will dictate which set to choose. For example, if you have a lot of equity in your home, the Washington state exemptions offer significantly more protection (up to $125,000) than the federal bankruptcy exemptions.