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Understanding Dischargeable Debt in Washington


Unlock financial freedom through Chapter 13 bankruptcy and dischargeable debt 

Are you facing overwhelming debts and seeking a lifeline for financial relief in Washington? Look no further. At McBurney Law, we are proficient in navigating the complex landscape of Chapter 13 bankruptcy, providing tailored solutions to help you achieve debt discharge and regain control of your financial future. When handling dischargeable debt in Washington, our experienced legal team will be your trusted partner, ready to guide you through every step of the process. 

Discover how McBurney Law can turn your financial struggles into a fresh start.  Our team understands that the journey towards debt discharge can be challenging and confusing. Our dedicated team of lawyers is here to make the process seamless. 

What is Dischargeable Debt in Washington?

In Washington, dischargeable debt refers to the types of debt that can be eliminated through bankruptcy proceedings. Bankruptcy is a legal process that allows individuals and businesses to seek relief from overwhelming debt by either liquidating assets to repay creditors (Chapter 7 bankruptcy) or creating a structured repayment plan (Chapter 13 bankruptcy).

What is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy (also known as the “wage earner’s plan” or “reorganization bankruptcy”) is a legal process available under the United States Bankruptcy Code, which allows regular-income individuals to restructure their debts and create a manageable repayment plan. 

Chapter 13 bankruptcy allows debtors to retain their assets while repaying debts over three to five years, unlike Chapter 7, where assets can be sold to pay off creditors.

Consulting with our knowledgeable bankruptcy attorney at McBurney Law can help you understand your options and navigate bankruptcy effectively.

Types of Debts Get Paid in Chapter 13

In Chapter 13 bankruptcy, the repayment plan is designed to prioritize certain debts over others. These debts are categorized into two main types: secured and unsecured. The treatment of these debts differs significantly in a Chapter 13 repayment plan.

Secured Debts

Secured debts are loans backed by collateral, which means that the creditor has a legal claim to specific property if the debtor fails to make payments. Common examples of secured debts include:

  • Mortgages: If you have a mortgage on your home, it is typically considered a secured debt, and your home serves as collateral.
  • Auto Loans: If you financed the car purchase, the lender has a security interest in the vehicle until the loan is paid off.
  • Secured Personal Loans: Personal loans may be secured by assets like jewelry, electronics, or other valuable items in some cases.

In a Chapter 13 repayment plan, secured debts are typically prioritized and must be paid completely over the plan period. The debtor must make regular payments on these debts, which may include any arrearages (past-due amounts) to bring the account current.

Unsecured Debts

Unsecured debts are not tied to specific collateral, meaning the creditors cannot claim particular property if payments are missed. Common examples of unsecured debts include:

  • Credit Card Debt: Most credit card debt is unsecured because no collateral is attached to the loan.
  • Medical Bills: Medical debts are usually unsecured and may be eligible for discharge at the end of the Chapter 13 plan.
  • Personal Loans: Loans without collateral, like signature loans, are typically unsecured.

Types of Debts That Can Be Discharged in Chapter 13 But Not Chapter 7 Bankruptcy 

In a Chapter 13 repayment plan, unsecured debts are treated differently depending on various factors, including the debtor’s disposable income. Some unsecured debts may be paid in full during the plan, while others may receive only a percentage of what is owed, and the remaining balance may be discharged at the end of the repayment plan.

  • Willful and Malicious Property Damage – In Chapter 13 bankruptcy, debts arising from willful and malicious property damage can be included in the repayment plan, allowing you to pay off these debts over time.
  • Debts Incurred to Pay Nondischargeable Taxes – If you incur new debts to pay off non-dischargeable taxes (such as recent income tax debts that cannot be discharged), these can be included in your Chapter 13 repayment plan.
  • Certain Debts Arising Out of Separation Property Settlement or Divorce – Chapter 13 allows you to include certain divorce-related debts in your repayment plan, such as debts related to property settlements and obligations arising from divorce or separation agreements. 
  • Post-Petition Homeowners’ Dues and Government Penalties Fines and Forfeitures – In Chapter 13, you can include post-petition homeowners’ association dues in your repayment plan, allowing you to catch up on these dues over time. Government fines, penalties, and forfeitures can also be included in your repayment plan.

When Do You Receive a Chapter 13 Discharge?

In Chapter 13 bankruptcy, the timing of when you receive a discharge depends on several factors, primarily the completion of your repayment plan and your compliance with all other requirements of the bankruptcy process. Here’s a general overview of when you can expect to receive a Chapter 13 discharge:

  • Completion of the Repayment Plan: The most critical factor in receiving a Chapter 13 discharge is completing your repayment plan. Your repayment plan typically spans three to five years, depending on the specifics of your case and the court’s approval. During this time, you must make regular monthly payments to the bankruptcy trustee, who distributes the funds to your creditors according to the plan.
  • Full Payment of Priority Debts: Priority debts, including child support, alimony, and certain tax debts, must be paid in full through your Chapter 13 plan. Ensure you make all required payments on time for these priority debts.
  • Satisfaction of Secured Debt Arrears: If your repayment plan includes secured debts (e.g., mortgage or car loan arrears), you must also bring these debts current by making regular payments through the plan. That ensures that you maintain ownership of the collateral.
  • Payment to Unsecured Creditors: Unsecured creditors, such as credit card companies and medical providers, may receive partial payment through your repayment plan. The amount they receive can vary based on your disposable income and the specifics of your case.
  • Compliance with Other Requirements: In addition to completing your repayment plan, you must meet all other requirements of your Chapter 13 bankruptcy. That includes attending a meeting of creditors (341 meeting), providing requested financial information to the trustee, and complying with court orders.

Call Our Chapter 13 Bankruptcy Lawyer Now!

Are you burdened by insurmountable debt, seeking a way out, and eager to regain control of your financial life? Look no further than McBurney Law, where we can help transform your financial distress into a fresh start. With our competent legal guidance, you can navigate the complexities of Chapter 13 bankruptcy and find relief from overwhelming debts.

Our team at McBurney Law understands the pain points you’re facing – from creditor harassment to the fear of losing your home or valuable assets. We are here to provide a lifeline and a clear path to financial freedom. Let us help you craft a customized Chapter 13 plan that prioritizes your needs, protects your assets, stops relentless collection efforts, and learn more about dischargeable debt in Washington.

Aside from bankruptcy, we offer the following practices:

  • Criminal Defense – McBurney Law provides solid legal representation for individuals facing criminal charges. Our experienced criminal defense attorneys work tirelessly to protect the rights and interests of their clients.
  • Estate Planning – Planning for the future is essential, and our law firm assists clients in creating comprehensive estate plans. Our team understands that each client’s situation is unique, and we tailor estate planning solutions to meet individual needs and objectives.
  • Family Law – Our skilled family law attorneys assist clients with divorce, child custody, child support, spousal support (alimony), property division, prenuptial agreements, and post-divorce modifications.

Don’t let the weight of debt control your life any longer. Take action today and reach out to McBurney Law. Our proven track record in handling Chapter 13 bankruptcy cases in Washington ensures you will have the support and guidance you need to rebuild your financial future. Your journey to debt discharge and a brighter tomorrow begins now. 

Contact our law firm today and reclaim your financial independence.