If you are considering filing for bankruptcy in Washington, it is likely that you have come across some terminology that you find confusing. When reading through papers and articles about Chapter 7 bankruptcy, in particular, many prospective filers are confused by the term "presumption of abuse."
It is important that you make sure you are clear on all terms and phrases when you are approaching bankruptcy. This will not only help you make empowered decisions, but it will also help you move forward in the process with confidence.
What is meant by "presumption of abuse?"
When you are filing for Chapter 7 bankruptcy, you are essentially saying that you are unable to pay off your debts through other options such as through a Chapter 13 bankruptcy repayment plan. Chapter 7 bankruptcy has many advantages over other options. The most prominent options are that it can be completed in a matter of months and that it often involves a debt discharge.
The bankruptcy courts only want debtors to file for Chapter 7 bankruptcy when it is absolutely necessary. Therefore, all prospective fillers are subject to a means test, as well as other provisions.
If these tests find that you can afford to pay your debts by utilizing other options, you can choose to go through Chapter 7 bankruptcy anyway, but you will be doing so under the presumption of abuse. You should then be able to provide further evidence and documentation to show that a Chapter 7 bankruptcy is necessary for you.
If you want to go through a Chapter 7 bankruptcy under the presumption of abuse, it is important that you build an effective picture of your special circumstances, so you can move forward smoothly.