In Washington, bankruptcy provides consumers and businesses with a chance to settle debts quickly. Popular chapters of bankruptcy are chapters 7 and 13. The process could include the discharge of debts through the court. A Bankruptcy Attorney In Puyallup Wa explains the fine details of bankruptcy.
Managing a High Volume of Debt
A bankruptcy claim helps consumers manage a high volume of debt effectively. By filing for bankruptcy, the consumer could acquire a repayment plan or liquidate their assets and pay off their debts. The process allows consumers to eliminate their debts without facing late fees, additional finance charges, or potential lawsuits.
Qualifying for a Chapter of Bankruptcy
Consumers who want to file for bankruptcy must provide evidence of their eligibility. For chapter 13, the consumer needs income statements that show their annual household income. They must have an annual income that is greater than the state median for their household size. For chapter 7, the consumer must possess adequate assets to generate enough capital to pay off their debts.
The Difference Between the Chapters
The primary differences between the chapters are that chapter 13 lasts up to five years and chapter 7 lasts about six months. Chapter 13 is a repayment plan in which the consumer submits payments each month to the court. Chapter 7 is the liquidation process in which assets are sold in order to pay off the consumer’s debts. Both selections offer an automatic stay to prevent creditors from filing a lawsuit to collect outstanding balances.
Rebuilding the Credit
The consumer must attend a credit-counseling program before they file for their preferred chapter. The course may present details about how to rebuild the consumer’s credit. Common options are to secure credit rebuilder loans through a local bank where the consumer has an account. The consumer could face some difficulties as some lines of credit won’t be available due to the bankruptcy.
In Washington, bankruptcy offers a better way to manage debt and prevents legal action by creditors. The claims offer a choice between liquidation and a new repayment plan. Eligibility for the chapters is based on the claimant’s income or the value of the assets. Consumers who want to learn more about the chapters contact a Bankruptcy Attorney In Puyallup Wa right now.