Written by Attorney Eva Bacevice.
Updated August 17, 2020
If you’re experiencing financial difficulties in Grit City you are by no means alone. Hard times have hit individuals and companies alike in Tacoma. Just last year Puglia Engineering Inc., which operates both the Fairhaven Shipyard and a facility right in Tacoma, filed for Chapter 11 reorganization. Recently the case converted to Chapter 7 liquidation which likely has employees on edge about their employment future. Whether that impacts you directly or you have unrelated financial issues, bankruptcy is an option for individuals (or married couples) as well as corporations. If you’re considering filing bankruptcy in Tacoma you will be deciding between Chapter 7 and Chapter 13. Chapter 7 for individuals is very similar to Chapter 7 for corporations like Puglia Engineering; for both it’s considered a liquidation. What this means for you is that you would be able to walk away from most (or all) of your debt and get a fresh start. This can be particularly impactful if the bulk of your debt is unsecured, like credit card bills and medical bills. While you would still be responsible for non-dischargeable debts like child support and alimony, the ability to walk away from your debts and start fresh can make a huge difference in your life. Chapter 7 is a fairly quick process, usually lasting about four to six months. Chapter 13, by contrast, is longer and will run for a minimum of three to five years. Chapter 13 is more similar to a business Chapter 11, in that it is a reorganization. Chapter 13 can be a great option if you’re behind on a secured debt and are facing foreclosure on your home as a result. In Chapter 13, you set up a payment plan to catch up and otherwise address the rest of your debt. Chapter 13 is more time consuming and complicated, so seeking assistance through legal aid or an attorney is a good idea. Legal aid organizations can also assist with Chapter 7 if that is right for you. Additionally, if your case is straightforward and you are interested in moving forward on your own, you consider partnering with Upsolve for no cost to help you through your Washington Chapter 7 bankruptcy step by step.
Tacoma Bankruptcy Lawyers - Estimated Cost
Considering bankruptcy can be very frightening for some. If you believe that filing a Chapter 7 bankruptcy in Tacoma might be right for you, it’s completely reasonable to seek legal assistance. If you decide to hire an attorney, the cost of a bankruptcy lawyer in Tacoma for Chapter 7 will run between $1,100 and $1,200. Keep in mind that many attorneys who practice bankruptcy law offer a free initial consultation, so you can meet with them without risk. Perhaps you want to speak to an expert to see if they agree that Chapter 7 bankruptcy makes sense in your circumstances, and otherwise feel comfortable moving forward on your own. Having that reassurance can be helpful for your peace of mind.
How to File Bankruptcy in Tacoma, Washington for Free
Once you have come to the decision that you want to file a Chapter 7 bankruptcy in Tacoma, you’ll want to make sure you understand the requirements and steps to be successful in your case and keep your out-of-pocket costs to a minimum. Partnering with Upsolve can give you that reassurance for no cost as we guide you through each step of the process on how to file bankruptcy in Tacoma.
Collect Your Tacoma Bankruptcy Documents
Your first step is to collect the documents you will need to qualify for Chapter 7 bankruptcy in Tacoma, to prove your identity, and to properly fill out your paperwork. This will include documents to verify your income, such as pay stubs (at least the last two months, ideally the last six), your tax returns for the past two years (both federal and state), and the most recent statement(s) for all financial accounts (bank statements, etc.) You also need documents to verify your identity, such as a picture ID like a driver’s license or state ID and proof of your social security number, such as your original social security card or recent Form W-2. Also, find any documents that pertain to your ownership of property for your Washington bankruptcy. For example, if you own your home you will need the deed to the property, most recent mortgage statement(s), property tax statement, any back water bills, and proof of homeowner’s insurance. If you own a car, you’ll need the title, loan documents and proof of insurance. You’ll also need to list all of your debts, so obtaining a free copy of your credit report is strongly recommended.
Take Credit Counseling
The next step is to complete your first credit counseling course. There are two courses required before and during your Tacoma bankruptcy, but you need to provide the certificate of completion for the first course to file your case. Be sure to use an agency approved by the U. S. Trustee’s Office for the Western District Court of Washington. Many of the agencies will offer a package deal so that you can pay for both courses at the same time, usually around $50. Most of the agencies offer both courses online or over the phone. There are no approved agencies currently offering in-person courses in Tacoma, but if it’s important for you to attend the course in person before filing bankruptcy in Tacoma, there are two options in Seattle: Money Management International, Inc and American Financial Solutions of North Seattle Community College Foundation.
Complete the Bankruptcy Forms
After you have completed your first credit counseling course, the next step is to fill out your bankruptcy paperwork. When filing bankruptcy in Tacoma there are no specific local forms, so you’ll only need to fill out the federal bankruptcy forms. If you partner with Upsolve you can answer an online questionnaire that will populate your responses into the proper forms. You can also use the Chapter 7 Bankruptcy Form Package provided by the Western District Court which includes all of the necessary forms for your Chapter 7 bankruptcy in Tacoma, along with instructions and examples to help guide you.
Get Your Filing Fee
The next task is to get your filing fee. The cost to file a Chapter 7 bankruptcy in Tacoma is $335. This will need to be paid in full at the time of filing, in cash (exact change), certified cashier’s check, or money order. If you feel that you can’t afford this cost and your income is less than 150% of federal poverty guidelines, you can ask for a waiver of the filing fee. If you don’t qualify for a waiver, you can instead request to pay the filing fee in installments. Just make sure it’s paid in full within 120 days of filing bankruptcy in Tacoma, or you risk having your case dismissed before you get your discharge.
Print Your Bankruptcy Forms
The final step to getting your Tacoma bankruptcy ready to file is to print your paperwork. Make certain that you print it single-sided as the Court will not accept double-sided bankruptcy paperwork. 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 extra copy for your records. If you don’t have easy access to a printer you can try the Tacoma Public Library for reasonable printing fees ($0.10 per page); just be advised you will need to pay in cash. You can also go to a local Office Depot printing center.
Go to Court to File Your Forms
At this point, you are ready to go to Court and officially file your Chapter 7 bankruptcy in Tacoma. You will be filing at the U.S. Bankruptcy Court for the Western District, which has a courthouse directly in Tacoma, at Union Station, 1717 Pacific Avenue, Ste 2100. It is best to go in person on the off chance there is a small correction needed in your paperwork. It also will give you peace of mind to know that your Washington bankruptcy is properly on its way. It’s important to note the courthouse’s public hours when planning to file. The Tacoma Courthouse is open Monday through Friday from 8:30 am until 4:30 pm, but it is closed on federal holidays.
Mail Documents to Your Trustee
You will be assigned to a bankruptcy Trustee who will oversee your case after your Tacoma bankruptcy is officially filed. There are documents that you need to provide to your bankruptcy Trustee before your scheduled Meeting of Creditors. You should hear directly from your Trustee via mail with a specific list of documents to provide within two to three weeks from filing bankruptcy in Tacoma. If you would like to start gathering these items right away the Western District Court provides a list called “Chapter 7 Debtor(s) Requirement” that lists the minimum documents required, although your Trustee may ask for other documents as well, so carefully consult your letter. If you have not received a letter within three weeks of your case being filed you should send at least all of the items on the court’s list of required documents. The Trustee must receive their copy of your documents at least 7 days before your scheduled Meeting of Creditors.
Take Bankruptcy Course 2
While you are waiting for your scheduled court meeting, it’s a good time to complete your second required credit counseling course for your Chapter 7 bankruptcy in Tacoma. Remember that you need to use a court-approved agency. You can use the same agency you did the first time as long as they are approved for this course as well. To complete your Tacoma bankruptcy and receive your discharge you’ll need to file a certificate of completion for the second course at the same Tacoma courthouse where you filed your case. It’s possible that the agency may file the certificate on your behalf, however, you should still follow up to make sure that it properly shows up in your Court records.
Attend Your 341 Meeting
The next step in your Washington bankruptcy journey is to attend your Meeting of Creditors. This meeting will be with your bankruptcy Trustee rather than a judge and is an opportunity for your Trustee to speak with you and verify that the information you provided in your paperwork is true and accurate. This meeting tends to be fairly short, usually lasting between ten and fifteen minutes. It’s perfectly normal to be a little nervous about your 341 meeting. Often some preparation can help calm your nerves, as will knowing that the other people in the room waiting for their meeting are in the same boat you are. If all goes smoothly, the Trustee will conclude your hearing, meaning you won’t have to come back for another one. At that point, you just need to wait another 60 days (or so) to receive your Tacoma bankruptcy discharge.
Dealing with Your Car
A frequent concern is how a Chapter 7 bankruptcy in Tacoma affects your car. This depends on a few factors. First, if you have a loan on the car, are you current with your payments? If not, surrendering the car is usually your best option in Chapter 7 since there is no way to make up missed payments. The silver lining here is that you walk away not just from the obligation for future payments but also any missed payments, late fees, and interest. If you’re current with your car payments, the creditor may ask that you sign a reaffirmation agreement to let them know that you agree to keep making payments on the car despite your Tacoma bankruptcy. If you own the car fully, so long as you can protect the equity in it through federal (up to $3,250, plus any available wild card) or Washington State (up to $4,000) exemptions, you’ll be able to keep the car.
Washington Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Tacoma
Washington Means Test
Before you file your Chapter 7 bankruptcy in Tacoma you’ll need to show that you are eligible for Chapter 7 through the Washington bankruptcy Means Test. You can do this in two ways. First you can show eligibility if your monthly household income is less than the median income in Washington for the same size family, Second, if you don’t qualify under income limits, you can go through the extended Means Test calculation to show there is little to no income remaining at the end of the month. In that case, you’re still eligible for a Chapter 7 bankruptcy in Tacoma.
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
The Washington bankruptcy forms consist only of the federal bankruptcy forms. There are no specific local forms that also need to be filed. The Western District Court also offers a Chapter 7 Bankruptcy Form Package that includes all the necessary forms with instructions and examples for your Chapter 7 bankruptcy in Tacoma.
Exemptions in bankruptcy proceedings are the way that you protect your assets (what you own.) When filing bankruptcy in Tacoma, you can choose between the federal bankruptcy exemptions and the Washington bankruptcy exemptions, but you can’t mix and match between the two.