What happens to my debts when filing for Chapter 7 Bankruptcy?

When filing for Chapter 7 Bankruptcy in Washington, your debts will be relieved. This is a process in which a court-appointed trustee liquidates your assets and pays your creditors from those proceeds. In most cases, the court may discharge certain debts, such as credit card debt and medical bills, allowing you to start over with a clean slate and no debt obligations. The bankruptcy court must approve the Chapter 7 filing, and all of your creditors must be notified of the bankruptcy filing. After this is done, your creditors have the opportunity to make claims against your assets if they can prove that you owe them money. If they don’t submit claims, they will not be paid out of your assets. Additionally, any secured debt, such as a mortgage or car loan, is not typically discharged in a Chapter 7 Bankruptcy. This means that you are still responsible for paying off that debt, even if the court discharges your other debts. If you have any non-exempt assets, such as a second property or an expensive car, they may need to be sold to cover some of the debt you owe. You will not be able to keep any money from the sale, as it will be used to pay off your creditors. In general, filing for Chapter 7 Bankruptcy in Washington can provide relief from certain types of debt, although it will not completely eliminate all of your creditors. Secured debt may still need to be repaid, and you may need to sell certain assets in order to pay off other debts.

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