Can a corporation or LLC file Chapter 7 bankruptcy?

Yes, a corporation or limited liability company can file for Chapter 7 bankruptcy. However, corporate entities such as these will not receive a discharge in Chapter 7 bankruptcy. The bankruptcy trustee will simply close the company, sell all of the assets, distribute the proceeds to creditors, and dissolve the corporate entity. As a result, most corporate entities do not need to file Chapter 7 bankruptcy. There is an important exception however. The individual owners of a corporation or LLC are generally personally liable for all of the taxes incurred by the corporate entity. However, Washington law provides that the individual owners of a corporation or LLC will not be liable for premiums owed to the Washington State Department of Labor and Industries [See RCW 51.48.055(4)] and the Washington State Department of Employment Security [See RCW 50.240230(3)] if the business files and completes a Chapter 7 bankruptcy. Many owners of business may elect to file a Chapter 7 bankruptcy for their business to prevent these type of tax debts from following them personally after the business has closed.

Can I keep my car and other personal assets when I file bankruptcy?

Usually, yes. Most people who file for bankruptcy in Washington do not lose any property. We will be able to assist you in deciding whether to use the Washington exemptions or the Federal exemptions to protect your assets. For example, Washington law allows you to protect equity of $3,250.00 per person per vehicle. This means that in a Chapter 7 case, you can keep your vehicle as long as your equity in your vehicle is less than this amount. In addition to the motor vehicle exemptions, we can use what is commonly referred to as a 'wildcard" exemption to protect other assets, including your vehicle. Of course, if you have a loan on your vehicle, you must continue to make your car payments even if you file bankruptcy. If your equity is more than that protected by law or if you have fallen behind on your car payments, a Chapter 13 bankruptcy can permit your to restructure your loan and keep your car. Most household goods, home furnishings, and other personal property are exempt under either federal or state exemptions. When you come in for your one-hour consultation, we can discuss your assets and how to protect them when you file bankruptcy. We know this process can be intimidating; however, our knowledgeable attorneys will walk you through every step of the process. Call today to schedule a consultation.

Can I keep my home when I file bankruptcy?

For most Americans, a home is their biggest investment in their lifetimes. When you become financially unstable, you may fear losing your home and feel stress surrounding your future. After all, we become emotionally attached to our homes because it is where we raise our families and enjoy family occasions. When you purchase your home, you obtain a secured loan with your house serving as collateral. In Washington, you are entitled to a homestead exemption in your residence when you file bankruptcy. That means, in many cases, though you file bankruptcy, you may keep your home. The exemption entitles an individual or couple to protect up to $125,000 in equity in their home. Therefore, if your mortgage payments are current and you continue to make those payments, your home is protected, up to $125,000 in equity. If your home has more than $125,000 in equity, you may be liable for your debt and be required to sell your home in order to pay what you owe. If you are behind on your mortgage payments, but still desire to keep your home, a Chapter 13 bankruptcy can save your home by permitting you to catch up on your house payments over time while you still live there.

How can I rebuild my credit after bankruptcy?

Filing bankruptcy is a very important financial decision. It will reduce your credit score because it shows that you were unable to repay your creditors. However, there are steps that you can take to rebuild your credit score after your bankruptcy ends. The first step to rebuilding your credit after Chapter 7 bankruptcy is to obtain copies of your credit reports from Equifax, Experian, and Transunion. You can obtain a free copy of these credit reports at www.annualcreditreport.com. Once you have obtained your credit reports, you should look at them closely to make certain that all of the information is accurate. It is not uncommon for credit reports to still indicate that you owe money to creditors that were discharged in your bankruptcy. If that happens, you should dispute those items with the credit bureaus to make certain that everything is reported correctly. The next step to rebuilding your credit after bankruptcy is to simply make certain that you pay all of your bills on time and never allow anything to go to collections. If you have a large medical bill after your bankruptcy, it is important that you make payment arrangements with your doctor and make sure to never miss a payment. Do this before the doctor sends your bill to collections. You should be very careful about the type of credit you attempt to obtain after your bankruptcy discharge. Once you file bankruptcy, your mailbox will be swamped with advertisements for credit cards, personal loans, and car dealerships. Most of these creditors are offering you credit because (1) they know that you filed bankruptcy, (2) they know that you cannot file another Chapter 7 bankruptcy again for eight years, and (3) to try to take advantage of you. Be careful to read the fine print on these advertisements. Many of these creditors will charge high annual fees, high interest rates, and may not provide a grace period before they start charging you interest. You may want to apply for a secured credit card after your bankruptcy is over. A secured credit card is one where you give the credit card company a deposit and they give you a credit card with a spending limit equal to your deposit. It is not the same thing as a prepaid credit or debit card. Look for a secured credit card with the lowest annual fee and the lowest interest rate that you can find. Make sure that there is a grace period so that the credit card company will not start charging you interest on the same day that you make your purchase. Once you have your secured credit card, you should use it every month and pay the balance in full every month. By doing this every single month, and by making sure that no other bills are missed or paid late, your credit score will start to improve. You may find that your credit score quickly rebounds to a higher score than you had right before you filed for bankruptcy. Finally, you should continue to monitor your credit reports to make certain that all of the information on your credit reports is accurate. Some people pay for a credit monitoring service. I recommend that you continue to pull your credit reports at www.annualcreditreport.com and monitor your credit for free. This website allows you to review each of your credit reports once per year free of charge. We recommend that you review one of your credit reports every three or four months. Rotate the credit reports that you review and you will never be required to pay to view your credit reports.

How do I get started when it comes to filing bankruptcy?

We offer a free one-hour consultation in our Seattle or Tacoma law office, where you will meet with an experienced attorney to review your financial situation and answer your questions. We will determine if bankruptcy is a viable option for you to be able to have a clean financial slate. Once we determine your options and go over them with you, you can then sign up and we will open a file for you with payment arrangements available for fees and court costs. You can start referring your creditors to us immediately while we prepare your case. You no longer have to receive calls from creditors dozens of times per day! When you retain Kent and Wittner, P.S., you will begin to feel better immediately. Our expert counsel will release you from your obligation to discuss your financial situation with banks, creditors, and mortgage companies. One thing that sets us apart from other law firms is that when you work with Kent and Wittner, you will meet with an attorney at every appointment, from beginning to end. Clients never meet with a paralegal or assistant. You will have peace of mind knowing that an experienced bankruptcy attorney will be with you at every step of the way.

How much does it cost to file bankruptcy?

Our office offers a free one-hour consultation to determine whether bankruptcy is a viable option. Bringing all of your necessary financial information to your appointment will help us to determine your exact options. If bankruptcy is a viable option for you, we can provide an estimate for completing your case. If not, we can offer you other options to relieve your financial stress. In addition to bankruptcy, we also provide debt negotiation services. There is not one cost for every bankruptcy. A simple bankruptcy will cost less than a difficult bankruptcy. It depends on the complexity of your financial obligations, the cooperation with your creditors, and how efficiently you follow through on your obligations. We work hard to make each bankruptcy as smooth as possible. Please call to schedule a free consultation to discuss the specifics of your situation. During the free consultation, we will provide you with an estimate of the attorney fees and outline how your bankruptcy will progress. Our attorneys have the experience necessary to help you start fresh with Chapter 7, Chapter 11, and Chapter 13 bankruptcies. Call our Seattle or Tacoma law office today to schedule your free consultation.

In Chapter 7 Bankruptcy, what is a reaffirmation agreement?

A reaffirmation agreement is a document that is signed by you, the creditor, and either your attorney or the bankruptcy judge. If you enter into a reaffirmation agreement, the debt that you owe to that creditor will not be discharged in the bankruptcy. A reaffirmation agreement has very serious legal and financial ramifications and should not be entered into lightly. The court will impose a deadline, which is 60 days after your Meeting of Creditors, to file a reaffirmation agreement. If that deadline is missed, the court will not approve the reaffirmation agreement. If you enter into a reaffirmation agreement and then change your mind, you will have approximately 60 days to rescind the reaffirmation agreement. If you owe money on your car, some finance companies will require that you enter into a reaffirmation agreement if you want to keep your vehicle. It is important that you discuss this issue with your bankruptcy attorney. If you enter into a reaffirmation agreement and then later default on the loan, the finance company will be permitted to repossess your car, sell it at an auction, and sue you for any deficiency. Most mortgage companies will encourage you to enter into a reaffirmation agreement for your home. However, there is no requirement that you enter into a reaffirmation agreement. A reaffirmation agreement on your home is usually not necessary, provides little or no benefit to you, and can put your financial future in jeopardy. Some mortgage companies will treat you poorly if you refuse to enter into a reaffirmation agreement. For example, they may not send you monthly mortgage statements, they may not allow you to enter into a loan modification, and they may not report to the credit bureaus that you are making your mortgage payment. Most bankruptcy attorneys and bankruptcy judges will not approve of a reaffirmation agreement for a mortgage. As long as you continue to make your payments on your mortgage, you will be able to keep your home if you do not enter into a reaffirmation agreement. If you do enter into a reaffirmation agreement for a mortgage, and later default on the loan, you could be sued by your mortgage company for a deficiency following a foreclosure sale. Please speak to your bankruptcy attorney for more information about whether or not you should consider entering into a reaffirmation agreement.

What can bankruptcy do to help me?

Bankruptcy can eliminate the legal obligation to pay all or most of your debts. This is called a "discharge" of debts. It is designed to give you a fresh financial start when you can no longer maintain your legal obligations. Bankruptcy can stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment). Bankruptcy can prevent repossession of a car or other property. Bankruptcy can stop wage garnishment, debt collection harassment, and similar creditor actions to collect debt. We can provide details of your financial risks and gains at your first appointment. We offer each client a free one-hour consultation to discuss your particular case so that you know what to expect during the process. We can walk you through the expected outcome and share any complications or debts that do not qualify when we are able to review your financial history. You may have your driver’s license suspended due to an outstanding debt and a civil action against you. You may obtain reinstatement of your driver's license by setting up a plan in Chapter 13 to repay court fines.

Kent & Wittner, P.S.

ROY W. KENT | BRETT L. WITTNER | KELLY M. WITTNER

Putting Lives on Track.

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(253) 473-7200

Pierce County Tacoma, Washington

King County (206) 246-4040
Seattle, Washington

Kent & Wittner, P.S. > Frequently Asked Questions (FAQs)

Kent & Wittner, P.S.

ROY W. KENT | BRETT L. WITTNER | KELLY M. WITTNER

Putting Lives on Track.

We are here to help. Our mission is to provide top-caliber legal services that are personalized, conveneint, and tailored to fit your budget. We'll stick with you every step of the way.

BANKRUPTCY

Are you in over your head? We can help! The attorneys at Kent and Wittner, P.S. have helped thousands of people reduce and eliminate debt through Chapter 7, Chapter 11, and Chapter 13 bankruptcies. You can have a fresh financial start!

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MORTGAGE ASSISTANCE

Many people find themselves in a mortgage they can’t afford. At Kent and Wittner, P.S., we can help you stay in your home, modify your loan, or guide you through the short sale or foreclosure process.

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IMMIGRATION

Are you interested in helping a family member or fiancé become a permanent resident or apply for citizenship? We help bring families together and assist in navigating the complex immigration system.

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"Our top priority is to make each client feel valued and respected. We know that families in distress are under a lot of pressure. We also understand that we might not catch you at your best. Don’t worry. We keep a box of tissues always at the ready and are prepared to listen and work through any issue.Our goal is to make sure you leave with a smile on your face – even if you didn’t come in that way."

Frequently Asked Questions (FAQs)

Choosing an attorney is a highly personal and serious decision. You probably have a number of questions about our experience, services we offer, and how you will be treated when you are with us. Please review some of the most common questions we receive. If you do not see yours listed here, please contact our office. One of our experienced attorneys will be happy to help.

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