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Bankruptcy in Washington

Are there any income requirements for filing bankruptcy in Washington?

If you wish to file for Chapter 7 bankruptcy in the State of Washington, you will need to meet the income requirements prior to filing your petition.  These income requirements state that only people whose income was below the state average for the year prior to filing for bankruptcy are eligible for Chapter 7 bankruptcy.  If you fail to meet these income requirements, you will not be allowed to file for Chapter 7 bankruptcy under any circumstances.  This however, does not mean that you can not still seek bankruptcy relief.  If you fail to meet the income requirements for Chapter 7 bankruptcy, you may still be eligible to file for Chapter 13 bankruptcy.  There are not currently any income requirements in order to file for Chapter 13 bankruptcy.

If I am married, do I have to file with my spouse Washington?

The State of Washington is one of 11 states in America which are known as community property states.  What this means is that all married couples in the State of Washington are legally responsible for all debt which is accrued as part of the marriage.  For this reason, it is impossible to file for bankruptcy without filing a joint petition with your spouse.  Since all debts are considered to be joint debts, all debts must be discharged in the same fashion.  This same rule applies to married couples who have become legally separated.  If any of the debt which you are seeking to discharge was accrued during the course of your marriage, you will not be able to discharge this debt without filing a joint petition.

What are the property exemption rules in Washington?

The property exemption rules in the State of Washington are as follows:

Homestead exemption of up to $40,000

Up to $2,500 of equity in one motor vehicle

Up to $1,000 in clothing

Up to $1,500 in books

Up to $2,700 in home furnishings

Up to $2,000 in other personal property

Up to $400 in cash and bank accounts

Will all of my debts be discharged as part of a Chapter 7 bankruptcy in Washington?

The court has the discretion to discharge any or all of your unsecured debts as part of a Chapter 7 bankruptcy settlement.  The court however, is unable to discharge any secured debts regardless of your ability to repay these debts.  This is because, secured debts have been guaranteed by the use of collateral.  If you are unable to repay your debts, your creditors can still reasonably recover their losses by seizing the collateral which was used to obtain the debt.  For instance, if you are unable to repay your mortgage, the bank will reasonably be able to recover their losses by foreclosing on your home.

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