Richard J. Shurtz, Attorney at Law

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The advantages a Chapter 7 bankruptcy may provide for families

Few things in life are worse than living with insurmountable debt. There may be many Washington families struggling to keep the lights on while debt continues to eat away at their earnings. For many, a Chapter 7 bankruptcy may provide a way out of financial red ink.

For individuals who are facing collection actions, a Chapter 7 petition places a stay on all attempts to collect those debts listed in the official filing. This means that wage garnishments, foreclosures and repossessions are halted for a time. The bankruptcy court will appoint a trustee to oversee the petition. This individual will review all of the assets held and debts owed while discerning whether a debtor would be financially capable of repaying any of the debts -- in whole or in part.

If it is determined that there exists some assets that could be used to satisfy some of the loans or debt, the trustee will sell off those assets. That does not necessarily mean that the petitioner will be forced to relinquish a family home or vehicle. If certain conditions are met, a home may be retained. Likewise, a car loan may be reaffirmed if the lien holder accepts a reaffirmation agreement.

In general, a Chapter 7 bankruptcy is selected for those families that are unable to keep up with mounting payments and do not have considerable assets or income that would prevent a liquidation and discharge of debts. There are different categories of bankruptcies, and each Washington family considering this step may benefit from a thorough review of each option. There are knowledgeable resources available that can provide detailed information on each one to ensure that a fresh start is finally within reach.

Source:, "File Chapter 7 Bankruptcy", Daniel Kurt, Oct. 1, 2014

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