Choosing a bankruptcy chapter affects how your debts and property are treated throughout the case. If you select a chapter that does not fit your financial circumstances, you may face consequences that undermine the relief you hoped to receive.
This risk can be especially important with a pro se bankruptcy filing. Bankruptcy rules involve eligibility requirements, exemptions, required documents and different approaches to property and repayment.
Your bankruptcy case could be dismissed
Each bankruptcy chapter has requirements that must be satisfied for the case to proceed. Choosing the wrong chapter can mean that your income, debts or other financial circumstances do not meet the requirements for the relief you requested.
Problems can also arise from incomplete paperwork or missing supporting documents. Filing on your own does not change these requirements, and failing to comply with bankruptcy procedures can lead to dismissal.
A dismissed case can leave you without the debt relief you expected. Depending on the circumstances, creditors may once again be able to pursue collection efforts after bankruptcy protections end. You may also need to consider whether another bankruptcy filing is appropriate, making it important to understand the problem that caused the original case to fail.
You could lose valuable property
The type of bankruptcy you choose can directly affect what happens to your assets. This makes property one of the most important considerations before selecting a bankruptcy chapter.
In Chapter 7, property that is not protected by an applicable exemption may potentially be sold to pay creditors. If you misunderstand the exemptions available to you or fail to recognize that valuable property is exposed, filing could place assets at risk that you intended to keep. This might include equity in property, savings or other possessions with significant value.
Chapter 13 generally allows eligible debtors to retain property while completing a repayment plan. However, choosing Chapter 13 brings different eligibility and payment requirements that must be maintained.
Filing for bankruptcy in Washington therefore requires more than deciding which process appears easier. If you believe you filed under the wrong chapter, seek legal guidance promptly to understand how the filing could affect your case, debts and property.