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Chapter 7 bankruptcy does not need to carry any surprises

When an individual or married couple residing in the state of Washington are contemplating filing a Chapter 7 bankruptcy, they usually have many questions about important issues that will affect their lives. The best place for answers is in the office of an experienced consumer bankruptcy attorney. The initial consultation is usually free and the bankruptcy attorney is in effect at the consumers' disposal to answer all their questions.

Because Chapter 7 is the liquidation chapter of the Bankruptcy Code, people often ask if they will lose their property, their cars or their home. The answer is usually no. If such a result was indicated, the attorney will recommend a Chapter 13. In most cases, however, the consumer filers can keep their vehicles, their personal belongings, furnishings and, importantly, their house.

The initial consultation will answer such concerns and provide a strategy satisfactory to the clients. In some cases, where the consumer has considerable equity in the residential real estate, and where that equity exceeds the available exemptions, a Chapter 13 may be required. The Chapter 13 is a payment plan where secured debt and a percentage of unsecured debt is paid in monthly installments over the life of the plan, which must be approved by the court.

If the marital home is heavily mortgaged but the payments are up to date, the consumers can keep their home by simply keeping current on their mortgage payments. The same concept is true of car loans. Regarding cars owned outright, there is a monetary amount listed as an exemption and if the vehicle is worth less than the exemption amount, the vehicle may be exempted and retained. There is also a remedy called redemption in which the consumers may pay the fair market value for the vehicle and have the remainder of the debt discharged.

The variations are nearly endless, which accentuates the great value of obtaining an initial consultation with an experienced consumer bankruptcy attorney. In that way, the Washington state resident will enter into a bankruptcy filing with all the relevant information in hand. It is always best to go forward with the knowledge, information and preparation that makes the process one that does not carry any surprises.

Source: experian.com, "What Is Chapter 7 Bankruptcy?", Carla Fried, April 4, 2018

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