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What you should know about bankruptcy in Washington, D.C.

Bankruptcy laws vary from state to state, which is why you should be familiar with how Washington, D.C., handles personal filings. Our team at the Ammerman & Goldberg “Bankruptcy” Law Office has helped countless people find debt relief through filing for bankruptcy. Here is what you should know if you are considering this option.

A common thread in bankruptcy is that debtors typically must participate in credit counseling prior to filing for either chapter 7 or chapter 13, the two most common types of personal bankruptcy. As the U.S. Bankruptcy Court for the District of Columbia points out, you must receive this counseling in the 180 days or fewer before filing for bankruptcy.

When filing for either type of relief, you must be aware of D.C.-specific laws for property exemptions. This is property you may be able to keep in chapter 7, or it can determine how much you will repay your creditors in chapter 13. You can choose to take either federal or Washington, D.C.’s exemption scheme. D.C.’s exemptions include the following:

  •        The homestead exemption, which enables you to exempt all the equity you have in your home when your dependents live there
  •        Up to $2,575 of a motor vehicle
  •        Up to $8625 in appliances, home furnishings, musical instruments, books and clothing, limited to $425 for each item
  •        A savings account for higher education tuition 

One last law that can be specific to Washington, D.C., is that you must take a means test to determine how your income compares to the district’s median income. If your income is less, you will qualify for chapter 7. If you are planning to file for chapter 13 and your income is less than the median, your repayment plan may only be three years long. The median income changes often, and the U.S. Department of Justice publishes the updated numbers.

For more information on this topic, please visit our page regarding personal bankruptcy.

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