Chapter 7 Bankruptcy

1. What is Bankruptcy?
   Bankruptcy is a law allowing people a fresh start if they get buried under too many debts. Bankruptcy dates back to roman times. The word literally means “broken bench”, based of the roman custom of publicly breaking the workbench of any citizen unable to meet his obligations. Some notable bankruptcies in history include the Panama Canal, The Pony Express and President Ulysses S. Grant. More than 11,000 people file bankruptcy in the Eastern District of Washington every year.


2. How do I file Bankruptcy?
   A person files bankruptcy by preparing and filing the appropriate schedules with the United States Bankruptcy Court for the Eastern District of Washington in Spokane (or other appropriate Bankruptcy Court) along with paying the filing fee. As of April 9, 2006, this fee will be Two Hundred Ninety-Nine Dollars ($299.00). Before you file, you must also obtain a certificate stating that you have consulted with a credit counseling agency. A list of approved agencies is attached to this notice.


3. What happens after I file Bankruptcy?
   Within ten (10) business days of filing, the Bankruptcy Court will mail out a notice to your creditors indicating that you have filed for bankruptcy protection and advising them that they can take no further legal action to collect their debts. This effectively means you will not have to pay any of those debts no matter what stage of the collection process they are in, even if they have already obtained a judgment. You must deliver a copy of your most recent tax return to our office to give to the trustee. If you do not have a copy, ask us for a Form 4506-T so that you can order a tax transcript from the IRS. Finally, before the court will issue a discharge in your bankruptcy, you must get another certificate which states that you have completed a financial management course.