Changes to WA state chapter 7 bankruptcy

March 14, 2009 at 11:07 am (bankruptcy) (, )

I’ve mentioned my impetus for starting a blog and starting the debt-free journey before. Well this week I got an interesting email regarding changes to Washington state’s bankruptcy laws. Apparently the income cut-off point for Chapter 7 bankruptcy, which I previously did not qualify for, has been raised:

"Effective March 15, the new median income figures for Washington are: $50,656 for one, $63,521 for two, $69,577 for three and $82,445 for four."

 This means that even with my recent raise and with my overtime, I would easily qualify for Chapter 7. Previously I only qualified for Chapter 13. While I don’t know a ton about it, I know that on the latter path,  you are put on a govt-mandated budget. No thanks, I can do that myself.

While I am not planning on doing bankruptcy, it does make me wonder – would it be easier to just do it? I could just save up money and pay things for cash, ie, save up for a house in total before buying one (if I ever do), and all that.

When I first started looking at blogs, I was trying to find people’s stories about living during bankruptcy and to find out how it really works. I never did find any good sources, instead I found PF blogs and how to do it myself. So anyway, does anyone have any good info/stores/leads? I’m still curious about the process of how it works and particulars of logistics.




  1. Abigail said,

    Ugh, don’t do it!

    While I’ll admit to a rather high level of ignorance about bankruptcy, I do know that it should be an absolute last resort. You have less than $40,000 of debt. That’s completely doable.

    On the other hand, bankruptcy will wreck your credit for at least 7 years. And it will show up even after that. Many apartment communities won’t even consider you if you’ve ever declared bankruptcy. And you’d better be prepared to pay in full for a car, or you’ll never get a good financing rate.

    I know it’s tempting to think of bankruptcy as a chance at a clean slate. But from what I hear, bankruptcy doesn’t protect as well against creditors as it used to.

    Meanwhile, I don’t know what your living situation is, re: apartments. I know I am pretty horrified by rents here lately. We’re paying $700 and seem to be relatively lucky to be doing so. But my now-husband and I managed to REALLY buckle down and pay off something along the lines of $15,000 in about a year and a half, on about $40,000 a year.

    Point is, I really think you can get through this, even though it seems like it will take forever. We did have some helpful points that not everyone is lucky enough to have, though the luck seems vaguely dubious: my disability just about covered rent, but on the other hand it wasn’t taxable; we had use of a car but didn’t have to pay car expenses.

    Also you have an “SBA loan” listed. I’m guessing that’s small business assn. You will want to investigate/consider how bankruptcy would affect that. If you have to keep any kind of inventory, creating relationships with new suppliers may be affected by something like that on your record. And/or if you decide in the next seven years to expand, you’d have a helluva time finding funding, if I had to guess.

    Anyway, that’s just my knee-jerk reaction. Admittedly, I’ve never researched WA state bankruptcy law at all.

  2. Miss M said,

    Here, from my blogroll – Bouncing Back from Bankruptcy

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