Bankruptcy in the District of Columbia
Welcome to the "Washington DC Did You Know Game"! (We'll get to the bankruptcy attorney stuff momentarily.)
- Did you know that the red phone is actually in the Pentagon, not the Oval Office?
- Did you know that the White House was originally called the President's Palace?
- Did you know that DC gets more rain than Seattle?
- Did you know that the Library of Congress has 535 miles of bookshelves?
- Did you know that Washington DC has the highest median income in all of the United States?
- Did you know that the cost of living in DC is 62.5% higher than in Pittsburgh?
- Did you know that 961 District of Columbia residents filed bankruptcy in 2011?
If you are faced with financial challenges, we wrote this article for you. If after reading this article you think bankruptcy may be a good fit for you, consult with a qualified bankruptcy lawyer.
In the meantime, we'll show you how District of Columbia bankruptcy law differs from the laws of the states; discuss whether you should file Chapter 7 or Chapter 13 bankruptcy; help you to find a qualified bankruptcy lawyer; and prepare you to work with your attorney.
How District of Columbia Bankruptcy Law Differs from the Laws of the States
If you live in DC, you get to choose between using the federal bankruptcy exemptions and those of DC. DC exemptions are unique and relatively generous and will likely protect all or most of your property.
If you use the DC exemptions, you can protect:
- Your home of any value.
- You car up to equity of $2,575.
- Personal items up to $8,625.
Did you know that these exemptions are doubled if you are married and filing bankruptcy jointly with your spouse?
Did you know that there are additional exemptions for retirement accounts, wages, insurances, family photos, health aids, and the like?
Check with your attorney to determine how to best protect your assets.
Your Choices in Filing Bankruptcy in Washington DC: Chapter 7 or Chapter 13
After your attorney has all of your financial information and knows your goals and family situation, he or she will be able to guide you through the Chapter 7 versus Chapter 13 analysis.
In 2011, 83% of DC bankruptcy filers filed under Chapter 7 because they met the means test and did not have large dischargeable debts.
In general, you qualify for Chapter 7 if your income is under the median income for DC.
As we mentioned, the median income for DC is higher than in any other state.
For example, a single individual (with no dependents) could have an income of $52,158 or a family of four could have an income of $119,656 and file under Chapter 7.
High expenses may allow you to make more and still qualify.
If you have high non-dischargeable debts such as student loans, alimony, child support, and most taxes, you may wish to file under Chapter 13 for a more relaxed payment plan.
The other 17% filed under Chapter 13. They had their debts reorganized so they could repay them under a 3 to 5 year repayment plan.
How to Find a Bankruptcy Attorney
You need someone who is licensed to practice law in DC and practices bankruptcy law exclusively. If you can get a personal referral, that's extremely helpful.
Other good sources are the local bar association and the Internet. Search under "Find a Washington DC Bankruptcy Attorney".
When you narrow down the choices, have a conversation with potential attorneys and ask questions about procedures, expectations, fees, and future questions. Choose whomever you think is the best fit for you.
How to Prepare to Work with a Bankruptcy Attorney
Although it can be difficult to face your financial problems, put ink to paper (or fingers to keyboard) and record your financial life. Make lists of assets (fair market value), monthly expenses, debts, and repayments made to creditors (including family members).
This analysis will help you to know where you stand and provide the information your bankruptcy attorney needs to get the process started and file the appropriate papers with the court.
Did you know that as soon as your bankruptcy petition is filed and accepted by the court, creditors must stop harassing you? Consult with a Washington DC bankruptcy lawyer.