Do You Qualify For Chapter 13 Bankruptcy In Washington State?
By: Washington State Business and Bankruptcy Lawyer Jonathan P. McQuade
Typically, a person files for Chapter 13 if he or she has too much equity in their home, or if his or her monthly income is too high to qualify for a Chapter 7 liquidation bankruptcy. Further, and unlike a Chapter 7 liquidation bankruptcy, a person can stop a home foreclosure and cure delinquent mortgage payments over time. Only individuals may file for Chapter 13 protection; corporations, LLCs, and other entities may not file for Chapter 13 protection.
When you file for Chapter 13 bankruptcy, you set forth a plan to repay all or part of your debts. If your current monthly income is less than the state median – currently $56,432 to $86,885 in Washington State depending on family size, your Chapter 13 plan will be three years. If your current monthly income is greater than the state median, the Chapter 13 plan will be five years.
Although Chapter 13 does not have a monthly income limit, Chapter 13 does have strict debt limits. To be eligible for Chapter 13, a debtor must have:
Secured Debts are less than $1,184,200. Secured debts include, but are not limited to, mortgages, deeds of trusts, car loans, etc.
Unsecured Debts are less than $394,725. Unsecured debts include debts that have no security. Examples include credit cards, certain loans, and even student loans.
Please note that these debt limits do not include contingent debt – i.e., debt that you don’t have to pay unless a certain “contingency” occurs.
If you have questions as to whether you would qualify for Chapter 13 bankruptcy, or if filing bankruptcy would be best for you, please contact one of our lawyers.
Beresford Booth PLLC (425.776.4100), www.beresfordlaw.com
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