Table of Contents
- Bankruptcy Law
- Types of Bankruptcy Filings
- Frequently Asked Questions about Bankruptcy
- How long does a bankruptcy remain on my credit report?
- What property may I keep after file for bankruptcy?
- Can I continue making monthly payments on assets like a house or vehicle after I file for bankruptcy and keep them?
- How difficult is it to re-establish credit after receiving a bankruptcy discharge?
- What’s the difference between a secured debt and an unsecured debt?
- How to research
- Disclaimer and Warning
- Member loses right to file derivative action against LLC by filing bankruptcy petition.
- Fraudulent Transfers WA
- Mastro bankruptcy trustee warns penny on the dollar payout could be delayed – Seattle Times
- “Mastro rings belong to creditors, judge rules” – The Seattle Times
- Secured Claims
- Means Test
- Washington Exemptions
- Federal Exemptions Summary
- Federal Bankruptcy Exemptions
Types of Bankruptcy Filings
Chapter 7 is designed for individuals, corporations and partnerships in financial difficulty who do not have the ability to pay their existing debts. Under chapter 7 a trustee takes possession of all the debtor’s non-exempt property, liquidates it for cash and uses the proceeds to pay creditors according to priorities of the Bankruptcy Code. In Washington, the debtor may elect all the state exemptions or alternatively all the federal exemptions. In Oregon, only state exemptions may be used.
Chapter 9 is designed to allow a municipality to continue operating while it works out a repayment plan for its creditors. A municipal unit cannot liquidate its assets to satisfy its debts.
Chapter 11 allows a business to reorganize and restructure its finances so that it may continue to operate, provide employees with jobs, pay its creditors, and produce a return for its owners. While chapter 11 is primarily designed for a business it is also available to individuals. In a chapter 11 case the debtor proposes a plan to creditors which, if accepted by the creditors and approved by the court, will allow a debtor to reorganize. A debtor may also propose a plan of liquidation and cease doing business.
Chapter 12 allows family farmers and fishermen with financial difficulties to repay debts over a period of time from future earnings. In many ways it is similar to a chapter 13 case. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm.
Chapter 13 enables individuals with regular incomes, under court supervision and protection, to repay their debts over an extended period of time according to a plan. The plan may call for full or partial repayment. The Bush Administration amended bankruptcy laws to attempt to make Chapter 13 the primary route for consumers. The changes made bankruptcy more difficult for consumers and more favorable for credit card companies.
Chapter 15 expands the scope of bankruptcy law to deal with cases of cross-border insolvency. It provides for cooperation between U.S. courts, trustees and debtors and their foreign counterparts. Chapter 15 prescribes guidelines for access of foreign representatives and creditors to Federal and State courts; the recognition of a foreign proceeding, and relief.
Frequently Asked Questions about Bankruptcy
Tollefsen Law PLLC provides bankruptcy services primarily to businesses and business owners. Many of the same questions apply to consumer as well as business bankruptcies.
How long does a bankruptcy remain on my credit report?
The fact that an individual filed a bankruptcy can remain on the credit report no longer than 10 years under provisions of the Fair Credit Reporting Act. If a chapter 13 bankruptcy is successfully completed, the credit reporting industry retains the information for seven years rather than the ten years allowed by law.
What property may I keep after file for bankruptcy?
You are allowed to keep certain property under the provisions of federal and state law exemptions to protect your property in bankruptcy. Most people do not exceed these exemptions and do not lose any of their property. Those who own property worth more than available exemptions should consider a Chapter 13 bankruptcy. Businesses that have ongoing businesses can protect their assets in Chapter 13 (asset value limitation) or Chapter 11.
Can I continue making monthly payments on assets like a house or vehicle after I file for bankruptcy and keep them?
Yes – As long as you catch up the arrearages and stay current. If you cannot immediately make your accounts current, Chapter 13 may be the solution. A Chapter 13 bankruptcy will allow you to keep the property if you make all future monthly payments and pay a little extra each month to cure your arrearage.
How difficult is it to re-establish credit after receiving a bankruptcy discharge?
Generally within two years of obtaining a discharge, you will have credit cards and be able to finance a car. Chapter 13 debtors are often able to finance the purchase of a vehicle and refinance their homes while in Chapter 13 bankruptcy. It is easier to re-establish credit after bankruptcy than many would suspect.
What’s the difference between a secured debt and an unsecured debt?
A secured debt is a loan backed by an asset like a mortgage on a house or a security interest on an auto. The creditor has the right to take back the security if the debtor fails to make a required payment. An unsecured debt is a loan not backed by an asset like utility bills and credit cards. An unsecured creditor does not have the right to take repossess property if you fail to make a payment. The creditor can bring an action to obtain a judgment against you. Security interests are generally not removed from property in bankruptcy and the creditor is entitled to payment or the asset. If the asset is worth less than the debt, the excess obligation can be discharged. If the asset is returned, a debtor’s obligation can be discharged.
How to research
On the right side of this page are a collection of articles relating to administrative law. You can also search our site for more answers. Remember to check the date of the article.
Disclaimer and Warning
Note this important disclaimer and warning: These materials are no substitute for legal advice. The articles may be out of date, be incomplete, contain errors, or not be relevant to the fact situation you are researching. Do not rely on the information found on this website to make a legal or business decision.