Bankruptcy Laws in Oregon

Bankruptcies are legal proceedings where the insolvent debtor is given financial freedom through a bankruptcy discharge, thereby granting the debtor a fresh start. In Oregon, declaring bankruptcy gives an automatic stay or bankruptcy protection so that the debtor is prevented from experiencing:

• Foreclosure
• Wage Garnishment
• Creditor Harassment
• Harassment of Collection Agencies
• Repossession

Bankruptcy petitions also enable you to have your debts wiped out. You can obtain discharge depending on the types of debt you incurred but most debts are dischargeable. The common debts that can be eliminated are:

• Medical bills
• Credit card bills
• Payday loan
• Student loan relief if you experienced undue hardship

However, secured debts such as those with mortgages and other collateral are within the creditors’ rights hence, the debts can be discharged but the property will belong to the lenders.
Types of Bankruptcy
Under the Bankruptcy Code, there are multiple chapters that a debtor experiencing insolvency can avail. The most common chapter used in bankruptcy proceedings in Chapter 7 and Chapter 13 Bankruptcy. The bankruptcy chapters can be quite similar but ultimately, they are different.
Oregon Chapter 7 Bankruptcy vs Chapter 13 Bankruptcy

 
Bankruptcy Chapter 7
Bankruptcy Chapter 13

Bankruptcy Type
Liquidation
Reorganization

Eligibility
Any person including businesses and corporations
Any person including sole proprietors of businesses

Restrictions
Must pass the Means Test and Credit Counseling. The debtor’s disposable income must be below the median income required by the State of Oregon
Does not require you to pass the Means Test but the amount of secured and unsecured debts that the debtor has must not exceed the amount limited by the State of Oregon

Time to Wipe Out Debts
Takes about 3 to 4 months upon the bankruptcy petition
Takes about 3 to 5 years, until the payment in the payment plan is completed

State of the Properties
The bankruptcy trustee in the bankruptcy will liquidate or sell the nonexempt assets of the debtor and then the proceeds will be used to pay off the creditors
The chapter 13 trustee will not sell the properties of the debtor but the debtor needs to pay the equivalent value of nonexempt property

Unsecured Debts
Unsecured debts are often discharged but the removal of unsecured liens of real properties through stripping of liens are not allowed
Once the requirements are met, removal of the unsecured lien of real properties through stripping of liens are not allowed

Secured Debts
Reduction of the principal loan is allowed but only on personal property
Once the requirements are met, the principal loan balance will be reduced on secured debts

Pros and Cons
The debtors quickly discharge their debts, being debt-free
The debtors will keep most of their properties to catch up on their missed monthly payments such as mortgages and car loans

The trustee in bankruptcy will sell all the nonexempt property and there is no way to avoid repossession or foreclosure of secured debts because chapter 7 does not makeup on missed payments
Portions of unsecured debts may have to be paid off and monthly payments to the United States trustee is to be made for up to 5 years

 
Talking with a Bankruptcy Attorney
While filing for bankruptcy does not require one to have a bankruptcy attorney, working with a bankruptcy lawyer will greatly help you because bankruptcy law can be very complex. Small mistakes can lead to your petition for bankruptcy being denied, wasting all the time, money, and effort you put in. Here at Northwest Debt Relief Law Firm, our competent bankruptcy attorneys will walk alongside you in your journey to debt relief and a fresh start. Our Portland, Oregon bankruptcy lawyers will help you not just before a bankruptcy filing, but also after the discharge. Our lawyers can provide reliable legal advice on matters such as how to rebuild credit, buying a house after bankruptcy, and more. Call us now for a free legal consultation.
 
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