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Frequently Asked Bankruptcy Questions

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How quickly after I file for bankruptcy will my creditors stop contacting me?

Your creditors will stop contacting you immediately after filing your bankruptcy petition.  Pursuant to the federal U.S. Bankruptcy Code, an “automatic stay” is in place when your bankruptcy petition is filed and this serves as a shield between you and your creditors, preventing them from contacting you and any additional collection activity.

Will Filing for Bankruptcy Stop my Garnishment?

Yes, filing for bankruptcy stops your future garnishments of your wages and bank accounts.  In most cases, you can also have any money garnished in the past 90 days returned to you.  Filing for bankruptcy will also stop legal action on any pending lawsuits and judgments.

Will Filing for Bankruptcy Stop my Foreclosure Sale?

Yes, filing a Chapter 7 or Chapter 13 Bankruptcy will immediately stop your foreclosure sale proceedings and cancel the scheduled sale.  However, the foreclosure sale may be rescheduled for a future date if you still cannot pay your mortgage after your bankruptcy petition is filed.  Our experienced affordable Olympia Bankruptcy Attorneys can explain these issues to you in detail.

Do I Have to Go to Court If I File for Bankruptcy?

Yes, all bankruptcy filers must attend one hearing called The Meeting of the Creditors.  This meeting is scheduled 30-35 days after your bankruptcy petition is filed.  You will receive notice of the hearing almost immediately after your bankruptcy petition is filed so you will have plenty of tme to schedule for it.  For people who reside in Thurston County, WA, the hearing is scheduled at the U.S. Federal Courthouse in downtown Tacoma, WA.  One of our affordable Olympia Bankruptcy Lawyers will be present and represent you at your hearing.

How Long Is the Bankruptcy Process?

For Chapter 7 Bankruptcy:  After your bankruptcy petition is filed, you will typically receive a discharge of your unsecured debts and your case will be closed approximately 90-120 days after your bankruptcy petition is filed.

For Chapter 13 Bankruptcy:  Your bankruptcy case completes where you receive a discharge of your remaining outstanding unsecured debts at the conclusion of your Chapter 13 Plan, which is usually between 36-60 months.

Can I Keep My House if I File for Bankruptcy?

The Washington State Bankruptcy Exemptions allow you to keep your home is if it your primary residence and you have more than $125,000 of equity.  You must continue to pay your mortgage(s).  If you have more than $125,000 of equity, you may still be able to keep your house by paying the unexempt portion through a Chapter 13 Bankruptcy Plan.  Our experienced and Affordable Chapter 13 Bankruptcy Attorneys can properly advise you on these issues.

Do I Need to Be Behind on My Bills When I File for Bankruptcy?

No, many bankruptcy filers choose to file for bankruptcy right at the point and the first month where they can no longer reasonably afford their monthly payment on their creditor debts.

Can I Strip A Second Mortgage By Filing for Bankruptcy?

Yes, in some cases.  If your home is appraised at less than the balance of your first mortgage, you can file an adversary complaint against your second mortgage company to convert your second mortgage to unsecured debt.  This can only be done through a Chapter 13 Bankruptcy case.  At the end of your Chapter 13 Plan (usually 60 months but sometimes as low as 36 months), you will receive a discharge of all of your unsecured debt, including your second mortgage and you will only be left paying your first mortgage to keep your home.   Our experienced and affordable Olympia Bankruptcy Attorneys can advise you on this process.

Can I Lower my Car Loan and Car Payment by Filing for Bankruptcy?

 Yes, in some cases.    In a Chapter 13 Bankruptcy, you can restructure you car loan over a five year period which can lower the monthly payment.  You can also “cramdown” the car loan, lower it to the fair market value of the car, if your car loan is at least 2 ½ years old.  In a Chapter 7 Bankruptcy, you can “redeem” the car for its fair market value.

Can I Catch Up on my Mortgage by Filing for Bankruptcy?

Yes.  In a Chapter 13 Bankruptcy, you can repay your mortgage arrearage (the amount you are behind) in payments for up to 60 months, so long as you resume your regular monthly mortgage payment as well. 

Does my Spouse Have To File for Bankruptcy?

No, your spouse does not have to file for bankruptcy if you file for bankruptcy, but there may be reasons that your spouse should file for bankruptcy with you.  Washington is a community property state.  This means that any debts acquired while you were married are the responsibility of both parties. 

And, you are BOTH responsible for it under Washington State community property law.  So, in general, it is irrelevant whether you or your spouse where the one who actually created the debt.  Therefore, if you file for bankruptcy on a community debt, your wife is not protected.  The debt is discharged for the bankruptcy filer only and the creditor can still collect against your spouse.

If I File for Bankruptcy, is my Co-Signer Still Responsible for the Debt?

Yes, a co-signer on any of your debts is still responsible for these debts even if you file for bankruptcy.  Only the person filing for bankruptcy discharges the debt.  The creditor can still collect on the co-signer.

Will Filing for Bankruptcy Improve My Credit?

In many if not most cases, filing for bankruptcy ultimately improves credit scores because your qualifying unsecured debts are either discharged in a Chapter 7 Bankruptcy or greatly reduced I a Chapter 7 Bankruptcy.  Many people report credit scores over 700 within just a few years after their bankruptcy case is completed.

Do you have questions about whether or not filing for bankruptcy is right for you and your family?

Our Olympia bankruptcy lawyers are here to help.

Call Our Affordable Olympia Bankruptcy Lawyers for a Free Case Evaluation

Low Flat Fees and Payment Plans Available

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