Washington State Bankruptcy Terms

Washington State Bankruptcy Definitions

Even with an experienced Washington State bankruptcy lawyer at your side, it's important that you understand the different terms associated with Washington State bankruptcy.
 
Here is a list of terms you should know. For additional help with defining Washington State bankruptcy terms, Contact Us.

  • Assets: Property owned or being purchased by the debtor. This can be real property (land) or personal property (everything else). The Washington State Bankruptcy Court is interested in any property the debtor has an interest in. The Court does not care whose name is on the title. The question for the Washington State Bankruptcy Court and Washington personal bankruptcy lawyers is "Who really owns this item of property?"
  • Automatic Stay: An order entered automatically by the court the very instant the Washington State bankruptcy petition is filed with the Bankruptcy Court. It stops all foreclosures, repossessions, garnishments and creditor contact with the debtor. There are severe penalties for a creditor knowingly violating the automatic stay. If you suspect a violation, you should contact Robert J. Reynolds Washington State bankruptcy lawyers immediately.
  • Bankruptcy Code: The federal law which governs all bankruptcy proceedings. Washington State bankruptcy lawyers are very familiar with it.
  • Chapter 7: The most common type of Washington State bankruptcy filed, usually by individuals. It is called a liquidation bankruptcy because the court can take all of your non-exempt assets, sell them and use the money to pay on your debts. However, by using one of our Washington State bankruptcy lawyers, most debtors find that they have very few, if any, non-exempt assets.
  • Chapter 13: A debt consolidation type of bankruptcy proceeding for individuals where the debtor makes payments to the court for 3-5 years. This type of Washington State bankruptcy is useful for debtors who are behind on house or car payments but want to keep the asset and just need some time to catch up on payments.
  • Collateral: The asset that secures a loan such as a car, boat, house or furniture. Important for Washington State bankruptcy exemptions.
  • Creditor: The person or business who is owed money.
  • Debtor: The person or business who owes money. The debtor is the one filing for Washington State bankruptcy.
  • Default: Non-performance of a term of a contract such as missing a payment or failing to carry insurance on your car when it is collateral for a loan.
  • Discharge: The Washington State Bankruptcy Court order which says you no longer are required to pay a debt. Some debts cannot be discharged such as court fines, recent taxes, child support and others. Some debts that cannot be discharged in a Chapter 7 can be discharged in a Chapter 13. Your Washington State bankruptcy lawyers should help you know which debts are dischargeable.
  • Equity: The difference between the value of an asset and the balance of any loan where the asset is collateral. Ask your Washington State bankruptcy lawyer to help you calculate equity.
  • Exempt: Assets are exempt if the Washington State Bankruptcy Court cannot take them away from the debtor. This allows the debtor to keep exempt property for his or her fresh start.
  • Exemption: The laws which describe which property is exempt. There are federal exemptions and state exemptions. Debtors declaring bankruptcy in Washington State may choose either state or federal exemption.
  • Fair Market Value: The amount a willing buyer will pay to a willing seller for an asset. This is the valuation used in bankruptcy. It can be complicated so contact one of our Washington State bankruptcy lawyers today for help.
  • Foreclosure: The legal process a creditor uses to obtain possession of real property from a debtor. After you file for bankruptcy with qualified Washington State bankruptcy lawyers, foreclosures should cease.
  • Garnishment: The process a creditor uses to obtain money from a debtor's bank account or wages after the creditor has a judgment against the debtor. After you file for bankruptcy with qualified Washington State bankruptcy lawyers, garnishments should cease.
  • No Asset Case: A Chapter 7 case in which the trustee determines that the debtor has no significant assets which can be taken and sold to pay the claims of creditors. The debtor gets to keep all of their assets according to Washington State bankruptcy law.
  • Petition: The document signed by the debtor and filed with the Washington State Bankruptcy Court which begins the bankruptcy process.
  • Preference: A transfer to a creditor by the debtor of property (usually money) to pay a debt that existed prior to filing Washington State bankruptcy. Transfers made within a short time prior to filing can be recovered by the bankruptcy trustee, sold and the proceeds then shared with all of the creditors.
  • Reaffirm: The process where the debtor and creditor enter into an agreement reinstating all the terms of a loan after a bankruptcy has been filed. When this is done, all of the protection of the Washington State bankruptcy filing as to that loan is lost. Washington law allows debtors to keep property which is collateral for a loan without the need to reaffirm as long as the payments continue to be made.
  • Relief From Stay: The process used by creditors to override the automatic stay described above. Once the creditor obtains a Relief From Stay Order from the court, the creditor is allowed to do whatever the order provides. The order usually provides that the creditor can begin foreclosure or repossession of an asset such as a car or house. Washington State bankruptcy lawyers can help you with this situation.
  • Trustee: The person appointed by the Washington State Bankruptcy Court to oversee the bankruptcies in a certain geographic area. The trustee's obligation is to represent the interests of the creditors.

Due to the current recession our financial situation was awful. The money that my wife and I were making was insufficient to cover our monthly bills. Trying to find a solution to our financial struggle, I talked to a friend, and she recommended that we talk to Mr. Reynolds. Today, we are free and clear of debt, and our financial situation has improved. Thanks to Mr. Reynolds, we are happy again.

Hector and Idalia M.

Sunnyside, WA