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Chapter 7 bankruptcyIf you are wondering if chapter 7 bankruptcy is right for me then you may be somebody who is having trouble staying on top of your debts and looking to check out your debt relief options moving forward.  Before you make any decisions you should speak to a experienced bankruptcy or debt relief professional to learn about all of your options so that you can be well informed about your options and avoid choosing an option that may be a mistake and costly at a later date. Filing a chapter 7 bankruptcy can liquidate most if not all of your unsecured debt including credit cards, medical bills, repossessions and stop wage garnishments without having to make any payments to your creditors while being able to keep in most cases all of your possessions in most cases through bankruptcy laws called exemptions.

Whether you will qualify for a chapter 7 bankruptcy will depend on what your household income has been over the last six months and what your current family size is. If your household income is below the median income for your family size you may qualify for a chapter 7 bankruptcy, however there are other considerations which could affect your case which is why you should contact a bankruptcy lawyer to make sure filing a chapter 7 bankruptcy is your best option. If you make over the median income in Washington for your family size you may qualify for a chapter 13 bankruptcy or you may attempt to try and settle your debts through debt settlement. You median income is calculated by multiplying your last 6 months of income by 2 and you do not count the current month you plan to file your case.  The median income in your state can fluctuate, and in Washington state as of April 2021 a single debtor can make $70,195, a household of 2 can make $85,189, a household of 3 can make $98,730 and a household of 4 can make $112,182 and the numbers go up from there depending on how many people live in your household.  If you are in a roommate situation, then you would not count your roommates income or count them as part of your household as everything is separate.

When potential clients come to see a bankruptcy attorney for their free bankruptcy and debt relief consultation, a lot of them have concerns about what bankruptcy is going to do to their credit scores The answer is it depends on your situation and what kind of credit you have starting out prior to the filing of your bankruptcy case.  A chapter 7 bankruptcy will stay on your credit report for 10 years as a public record, that you did in fact file for bankruptcy. With that said, immediately after you file for bankruptcy you will receive new credit and vehicle purchase offers because these companies know that you cannot file chapter 7 bankruptcy again for 8 years. It should also be noted that for some people, filing bankruptcy can actually improve credit because for these people who were not able to pay debt for several years, now have a fresh start and can rebuild there credit from scratch. One of the biggest factors in a persons credit score, is how much of your available credit you are actually using. If you have maxed out all of your credit lines, and then you have a credit utilization of zero, this is a good thing. Obtaining new credit through secured credit cards or having a friend or family member add you as an authorized user on their credit accounts can also help to get your credit back on track after your bankruptcy case is filed.  To be added as an authorized user, the sponsor does not have to actually give you access to their credit cards and it does not impact their scores at all and they can remove you at any time.

While the bankruptcy itself can stay on  your credit repot for up to 10 years, it won’t stop you from t buying a house in as little of time as 2 years. Additionally, most people who file for chapter 7 bankruptcy don’t have a problem finding an apartment to rent because of the bankruptcy filing as all other debts have now been eliminated although the issue of a landlord not wanting to rent to a bankruptcy filer does come up on occasion.  In those situations, it is advised to avoid more corporate landlords and try the next place available.  Typically showing a proof of  income or prepay some rent may be all that you need to get into your next rental.  Of course if you cannot show proof of income, then its likely you would not qualify for the rental regardless of whether you have filed for bankruptcy or not as you will still have a hard time fining a rental as it is costly from a landlords perspective if they are not receiving rent to pay down their own mortgage that they may have.  Chapter 7 bankruptcy may not be for everybody, but if you qualify for filing a chapter 7 bankruptcy, attempting to make minimum payments or enrolling in a debt settlement program in which you cannot keep up with settling all of your debts in a timely fashion doesn’t make sense as it will cost you more, and you may end up filing bankruptcy regardless due to the fact many consumer don’t realize that creditors can still file lawsuits while you are enrolled in one of these programs as in most cases you need to stop paying your creditors in order to engage in settlement discussions that will actually save you money.

If you are considering filing for chapter 7 bankruptcy, schedule your free consultation with Symmes Law Group today and or call us as 206-682-7975

  • Richard Symmes

    Hi, Richard here

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