Oregon Bankruptcy Exemptions and Law
Key Takeaways
Oregon bankruptcy laws allow financially overwhelmed residents to eliminate or restructure their debts under the federal bankruptcy code while using specific state-level exemptions. The Chapter 7 or Chapter 13 bankruptcy process triggers an automatic stay that halts creditor collections, foreclosures, and wage garnishments.
Oregon bankruptcy law primarily follows the federal bankruptcy code. However, like most states, Oregon has its own state exemptions for debtors within the state. There are requirements debtors must meet to qualify for bankruptcy in Oregon, including residency and income requirements.
It is a good idea to get legal help during the bankruptcy process while you fill out the forms and file your bankruptcy petition. We’ll review the steps to filing an Oregon bankruptcy and when you should consult an attorney for legal advice.
Oregon Bankruptcy Law
The federal bankruptcy code controls how a bankruptcy case proceeds in court. However, each state has its own set of exemptions, such as homestead exemptions, which allow residents to keep some of their assets and personal items. The goal of bankruptcy is to give debtors a fresh start, not to wipe them out completely. In Oregon, there are two primary types of bankruptcy filings.
Chapter 7 Bankruptcy
A Chapter 7, sometimes known as a liquidation bankruptcy, is used by debtors with few assets and a large amount of unsecured debt, such as medical bills and credit card debt. In Chapter 7 bankruptcy, the bankruptcy trustee takes charge of your assets and sells them to pay your creditors. Your unsecured debts are discharged.
To file a Chapter 7, you must pass a means test. If your annual household income is below the state median, you automatically qualify for Chapter 7. If it is slightly above that amount, the trustee looks at your overall financial situation.
Chapter 13 Bankruptcy
A Chapter 13 bankruptcy is also called a “reorganization.” It is used by people facing foreclosure who do not want to lose their house, and others with valuable non-exempt assets. In a Chapter 13, the debtor and trustee arrange a three- to five-year repayment plan to pay the creditors. As long as you stay current on the monthly payment plan, the remaining debt is discharged at the end of the repayment period.
A Chapter 13 plan requires a stable income and the ability to make the monthly payments. It is ideal for homeowners who have fallen behind on their mortgage due to other outstanding debts and need breathing room to clear those debts and catch up on their payments.
Automatic Stay
After filing either type of bankruptcy, an automatic stay goes into effect. The automatic stay immediately stops most kinds of debt collection efforts, such as:
- Foreclosure and repossession
- Lien placement and lawsuits
- Wage garnishment
- Eviction actions
- Utility shutoff
The automatic stay is not absolute. Creditors can file a Motion for Relief From Stay and have the stay lifted if they can show the lack of adequate protection of an interest in property. A landlord can sometimes proceed with an eviction if they have received a court judgment and eviction order. Still, the stay gives debtors time to plan their next move in court.
Oregon Bankruptcy Exemptions
Whether you file a Chapter 7 or Chapter 13, the trustee takes charge of your non-exempt property. Oregon debtors are explicitly allowed to choose between the full state bankruptcy exemptions or the full federal bankruptcy exemption list.
To file bankruptcy in Oregon as an Oregon resident, you must have lived in Oregon for at least 730 days (two years). Otherwise, you must file as a resident of your prior state.
- Homestead exemption: Equity up to $158,300 for single filers and $316,700 for joint filers. If the debts are due to child support arrears, the exemption is limited to $40,000
- Motor vehicle exemption: Up to $10,000 motor vehicle equity
- Household Goods: Up to $3,000 in furniture, clothing, appliances, and everyday household items
- Tools of the Trade: Up to $5,000 of work-related implements
- Wage Protections: Typically protects 75% of your earned but unpaid wages from court seizure or garnishment
- Retirement Accounts: 401k, IRAs, and Social Security and other government benefits are fully exempt
- Wildcard exemption: Oregon has a small wildcard exemption of $400, allowing filers to protect non-exempt property
These figures are updated every three years by Oregon law. Bankruptcy filers should consult an attorney to confirm they are using the correct figures.
Filing Bankruptcy in Oregon
Before filing for bankruptcy in Oregon, you must complete a credit counseling course. The U.S. Department of Justice has a list of approved classes. After your debt discharge, you will complete a financial management course.
It is a good idea to have an Oregon bankruptcy attorney handle your bankruptcy petition. The amount of paperwork and the level of detail required for a successful bankruptcy filing are considerable, and an attorney can ensure you follow the local rules on the format of filing your documents.
You should also have an attorney for the creditors’ meeting and any negotiations with the bankruptcy trustee.
Fees and Costs
Bankruptcy filing fees in Oregon are:
- $338 for Chapter 7
- $313 for Chapter 13
You can apply for installments or fee waivers if necessary. The costs of the mandatory courses range from $20 to $50, and most can be taken online.
After Bankruptcy
Bankruptcy discharge will eliminate most unsecured debt, such as medical bills, credit card debt, personal loans, and some other types of debt. A Chapter 7 discharge remains on your credit report for seven to ten years. After the repayment plan in a Chapter 13, if you have made all monthly payments, the judge will discharge any remaining deficiencies.
Bankruptcies of either kind will not eliminate secured debts. Although you can pay them down in a Chapter 13, you cannot discharge:
- Child support or alimony arrearages
- Tax debts and tax liens
- Mortgages
- Court-ordered restitution and fines
- Student loans (unless you can show undue hardship)
Get Legal Advice from an Oregon Bankruptcy Lawyer
Before you head into Oregon bankruptcy court, it’s a good idea to consult with an Oregon bankruptcy lawyer. They can explain the differences in federal and Oregon exemptions, and appear in court when necessary. Contact an attorney for assistance when you need immediate debt relief in Oregon.
Frequently Asked Questions About Oregon Bankruptcy
If you are filing a no-asset Chapter 7 and you are in the red every month, a do-it-yourself (DIY) bankruptcy might be the way to go. The forms are available here. However, be aware that even a no-asset Chapter 7 is quite complicated. It’s like filing a corporate tax return without consulting the instructions.
A Bankruptcy Petition Preparer (BPP) bankruptcy might be an option as well. Nonlawyer BPPs fill out forms for you. But that’s all they can do. They cannot give you any advice and certainly cannot represent you in a bankruptcy hearing.
A partnership with a bankruptcy lawyer is always an investment. But one that can pay dividends. Lawyers review your case and lay out your bankruptcy and non-bankruptcy options. Furthermore, attorneys take care of all the complex paperwork. All you do is review and sign. Finally, as discussed above, only an Oregon bankruptcy lawyer can represent you in court and may help you with money-saving options.
The bankruptcy filing fee, which varies slightly in different jurisdictions and in different types of bankruptcy, is usually about $350. If you have a financial need, an installment plan or even a fee waiver might be available.
A bankruptcy lawyer’s professional fee also varies, usually depending on the location and type of bankruptcy. Sliding scales and installment plans are usually available, regardless of financial need. Additionally, Chapter 13 bankruptcy debtors can include most or all of the professional fees in their monthly debt consolidation payments.
If you want to. Cell phone agreements, like cable TV and home security, are executory contracts. Many people chose to keep paying these things in Chapter 7. Other people use bankruptcy as an opportunity to cancel an unfavorable contract without penalty.
When you file bankruptcy in Oregon, you get a fresh start. The automatic stay stops foreclosure, repossession, and other adverse actions. State and federal laws protect your house, car, and other property. The judge eliminates credit card debt and most other unsecured debt. If you have past-due secured debt payments, the law gives you up to five years to make catch-up payments.
Most people lose nothing if they declare bankruptcy. Oregon has very generous property exemptions. The federal exemptions are also very broad. Some little-known rules could protect even more of your property.
From start to finish, about six months, in most cases. The meeting of creditors (a “341 Meeting”) happens about six weeks after you file your petition. If the trustee recommends discharge, the judge usually signs an appropriate order a few months later.
There is no debt requirement in Chapter 7. As outlined above, Chapter 13 debtors must have less than $1.4 million in secured debt and $400,000 in unsecured debt.
Oregon Bankruptcy Court
Where To File
The Beaver State’s bankruptcy courts are located in Eugene and Portland.
Debtors without lawyers must usually go to one of these courts during business hours to file documents, pay fees, and do almost anything else. A lawyer can normally do all these things, and more, online at any time.
You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.