Bankruptcy is federal law that gives debtors needed temporary protection and relief from creditors to obtain a fresh start in their financial lives. There are two main types of bankruptcy that individuals can file:
- Chapter 7 is the faster bankruptcy track, involving a liquidation of assets to repay creditors and wipe out debts.
- Chapter 13 is the longer bankruptcy track when a debtor makes a repayment plan over three to five years. The bankruptcy trustee takes the debtor's monthly payments and distributes them to creditors to repay a proportion of creditors' claims.
Where Do You File Bankruptcy?
Oregon’s bankruptcy court has one district with two divisions located in Portland and Eugene. Debtors must file in the division of the court where they live.
Are You Eligible to File Chapter 7?
If your average monthly income is less than Oregon’s median income, you are eligible to file Chapter 7. If your average monthly income is greater than or equal to Oregon’s median income, then you are not eligible to file Chapter 7 unless you pass a stringent means test.
Duration of Chapter 13 Plan
If your average monthly income is less than Oregon’s median income, your Chapter 13 repayment plan cannot be longer than 36 months, unless the bankruptcy court determines there is good cause to extend the plan for up to 60 months. If your average monthly income is greater than, or equal to, Oregon’s median income, your Chapter 13 repayment plan usually must be 60 months.
Exemptions determine which property a debtor may keep in a Chapter 7 filing or how much a debtor must pay to creditors in Chapter 13 bankruptcy.
- State Exemptions: Oregon mandates state exemptions are used with non-bankruptcy federal exemptions. State exemptions in Oregon include those for a homestead, personal property, wages, pensions, public benefits, tools of trade, alimony, child support, insurance, miscellaneous property, and wildcard personal property not already covered.
- Federal Exemptions: Federal exemptions are not available to Oregon bankruptcy debtors.
- Non-bankruptcy Federal Exemptions: Oregon allows debtors to use federal non-bankruptcy exemptions from other federal laws, however. There are four main non-bankruptcy federal exemptions for wages, Social Security benefits, Civil Service benefits, and veterans' benefits.
Residency rules for state exemptions mandate that you live in the state for a required period. You usually have to live continuously in the state for two years before filing bankruptcy. There are also limits on homestead exemptions for property acquired less than four years prior to bankruptcy.
Retain Legal Counsel
Oregon bankruptcy laws are complicated and each case is unique. For specific legal information, contact an Oregon bankruptcy lawyer.