Bankruptcy Questions and Answers For Oregon Residents

What is Chapter 13? And How Does It Apply To Residents Of Oregon.

There are two chapters in the Bankruptcy code. One is called Chapter 13.  This Chapter is for qualified individuals who are in financial trouble and want to reorganize their debt; this means the individuals agrees to pay off their creditors but needs help.  The purpose of filing Chapter 13 is to be allowed more time to pay off the debt and a possible a lower rate of interest.  Individuals as well as sole proprietors of a business may file for Chapter 13.  This is a payback plan, and the person filing is still obligated for its debt Filing Chapter 13 gives you the chance to maintain your property, and still catch up for past debts, such as car loans, and mortgages.  In some cases debt may be charged off that would not be under a Chapter 7.

The main goal for most people who file bankruptcy is to get all your debts charged off.  In other words, get a fresh start, and have no debt at all.  Chapter 13 is not the one to file, if this is your case. Chapter 13 is for reorganizing your debt, to make it easier to pay off.   You should consult an attorney who specializes in bankruptcy cases to find out which chapter is right for you.

Who Can File Chapter 13 in Oregon?

As in all states Oregon Residents need a income to file for chapter 13.  Chapter 13 is a way to pay back debt but with lower payments, and other terms.  This requires a person to have an income.
With the new bankruptcy laws, you may be required to file Chapter 13 instead of Chapter 7.  This is determined by your income level and now much money you have left over to pay your creditors.  Your income and location will determine if you qualify or have to file for Chapter 13 instead of Chapter 7.  A “means” test   is given to see if the person qualifies to file for Chapter 13

Benefits of filing for Chapter 13 in Oregon?

Chapter 13 protects individuals and sole proprietor’s ships for residents of Oregon from creditors attempting to collect money. It also allows them to keep their assets such as home, and personal property.  The main purpose and benefit is allowing the person to pay back debt at a reduced rate.  In some cases debts that are not allowed to be charged off under different chapters, may be reduced or dismissed filing a chapter 13.
Real estate liens and interest may also be reduced or completely discharged when filing for Chapter 13.  Divorce situations that have unresolved debt may also be discharged.

You must have an income.  The ability to pay is the main factor when filing under Chapter 13.   A payment plan is drawn up to pay off your creditors.  In most cases all payments are made to a trustee of the court, any income left over after paying reasonable living expenses, is made to your creditors.  This is over a 36 to 60 month period determined by the court.  Formulas and fixed amounts are used to determine some living expenses...  Individuals filing Chapter 13 will have to scale back expenses in many cases and are not allowed to add more debt during the bankruptcy time. All debt will be discharged after the time has elapsed.  Even if not all the debt is paid, off.
 You must stay current on all secured debt, such as your home or automobile.  These debts must be paid in full.  It is possible that Chapter 13 will help with any liens and may get your mortgage refinanced so you can make your payments easier.  Once the bankruptcy time expires, it is up to the individual to keep themselves out of financial trouble.

How much has to be paid per month?

This amount is determined by your income and your reasonable living expenses.  A trustee of the court decides how much you have to pay using your income, expenses, and a formula that has set amounts. You may have to liquidate some assets (not always) to pay your creditors, because of the amount set by the trustee.  This is why having an attorney is crucial.  They will help you do the necessary paperwork, and ensure that you can live comfortably and still pay off your debt.
In some cases, you will not be allowed to obtain a loan for a few years with out court approval.  This is another reason you should always have an experienced attorney. Not being able to obtain a loan could stop you from buying a car so you can go to work, if needed

Will all debts be discharged after filing Chapter 13?

All debts that can be discharged filing Chapter 7 will also be discharged filing under Chapter 13 there are some debts that cannot be discharged which will vary.  Some student loans and taxes may not be charged off. A bankruptcy attorney should explain what are the things you will still be obligated to pay.  Even lawsuits, fine, and penalties can be discharged under some circumstances.  Having the right attorney can make all the difference when filing for Chapter 13.

 Information on Chapter 7 in Oregon

Chapter 7 is also called Straight bankruptcy, and is a liquidation of assets, and a discharge of all debt. Under Chapter 7, a person (or business) is protected from creditors attempting to collect money. and in most cases most of their debt is discharged.  Usually within a few months after filing all debts are charged off and the person will no longer be responsible for any debt,

When should you file for Chapter 7?

People should consider filing a Chapter 7 when they cannot pay their debts.  This could be for numerous reasons.  Loss of income, divorce, medical reasons is just some reasons why people have huge financial debt.
There are different ways to file for bankruptcy in Portland Oregon. Chapter 7 is the least expensive, and is a fresh start with little or no obligations to creditors.  The only true way to find out if you should file for chapter 7 is consulting an attorney that is licensed to practice in the state of Oregon. There are formulas and comparisons to assist you in determining if you qualify to file.

Disadvantages to filing Chapter 7 in Oregon

The main disadvantage is the black mark on your credit report.  You also cannot file for at least 8 years after you first file.  If you are, a corporation you must cease operations if you file Chapter 7 Other disadvantages is any payments made to relatives over the previous year may be recovered by the court.  This could cause bad blood between you and your relatives. Getting loans for large purchases will be difficult if you file a Chapter 7.

Credit report

Having a Chapter 7 bankruptcy on your credit report is a bad thing.  It will stay on your report for up to 10 years. Getting loans will be difficult because of the negative mark.  It also stays on your report for 10 years.  Many lenders will still loan money to people with a chapter 7 bankruptcies.  This is because they know you can file for at least 8 years, so it gives them more advantage. Other creditors may require a fee to issue you a credit card, and over time, they will give you a better rate, and may drop the fees.  It is a good time to reestablish a good credit rating.  There are ways to assist in building a good credit rating after filing for bankruptcy. Credit counseling agencies may help.

Cash advances on Credit Cards prior to filing for Chapter 7

Do not take any cash advances out on credit cards prior to filing.  This is because chapter 7 may not discharge it.  The reason being to stop people from running up debt, and then filing for protection.  You should not make any large purchases or take out any cash advances the year prior to filing for Chapter 7.  You may wind up being responsible for that debt. You should always talk to an attorney prior to filing for Chapter 7.

Be informed!  Call our Bankruptcy Attorney for an affordable initial consultation.

This could be the decision that could change your life!