Bend Bankruptcy Attorney
Steps to Filing for Bankruptcy in Oregon
Filing for bankruptcy is a difficult decision to make, but it may be the right choice for you. The Oregon Fresh Start bankruptcy attorneys at Oregon Fresh Start understand the difficulties you may be facing and are here to help you make the right decision. We will guide you through the bankruptcy process and help you determine if bankruptcy is right for you.
How to File for Bankruptcy in Oregon
If you are considering filing for bankruptcy, you must first understand the bankruptcy laws in Oregon. The state has adopted the federal Bankruptcy Code, which means the state follows the procedures set forth in the Bankruptcy Code. Bankruptcy laws can be complex, which is why seeking legal help is so important.
If you are considering filing for bankruptcy, you will go through the following steps:
- File for bankruptcy: You must file for bankruptcy before you can receive any of the bankruptcy relief options. You can file for bankruptcy either voluntarily or involuntarily.
- Go through credit counseling: You must undergo credit counseling before you can receive any of the bankruptcy relief options. Credit counseling will help you learn how to better manage your finances.
- Go through debtor education: You must complete debtor education before you can receive any of the bankruptcy relief options. Debtor education will help you learn how to better manage your finances.
- Attend the 341 Meeting of Creditors: You must attend the 341 meeting of creditors before you can receive any of the bankruptcy relief options. At this meeting, your creditors will ask you questions about your bankruptcy filing.
- Disclose your assets: Before you can receive any of the bankruptcy relief options, you must disclose all of your assets to the court trustee.
- Go through the Means Test: Before you can receive any of the bankruptcy relief options, you must go through the Means Test. The Means Test measures your ability to repay your creditors.
- Receive the bankruptcy relief options: After you have completed all of the above steps, you can receive one or more of the bankruptcy relief options.
It is important to note that you can still file for bankruptcy even if you have already received one of the bankruptcy relief options. If you have already received a discharge, you can still file for bankruptcy and receive another discharge.
What Is the Difference Between Chapter 7 and Chapter 13?
The main difference between Chapter 7 and Chapter 13 bankruptcy is the type of debt that is discharged. In a Chapter 7 bankruptcy, all unsecured debt is forgiven, while in a Chapter 13 bankruptcy, only a portion of unsecured debt is forgiven.
Chapter 7 Bankruptcy
- Chapter 7 bankruptcy is often referred to as liquidation bankruptcy. The court trustee will liquidate your nonexempt assets to pay back your creditors.
- You will receive a discharge of unsecured debt, such as credit card debt or medical debt, after the trustee has paid back your creditors.
- You will be able to keep your assets, including your home and car, as long as they are secured by a lien.
Chapter 13 Bankruptcy
- Chapter 13 bankruptcy is often referred to as a repayment plan. You will have to make monthly payments to a bankruptcy trustee for 3 to 5 years, until all of your debts have been paid off.
- You will receive a discharge of unsecured debt, such as credit card debt or medical debt, after you have completed your repayment plan.
Both Chapter 7 and Chapter 13 bankruptcies will discharge your debt, but Chapter 7 discharges unsecured debt while Chapter 13 discharges unsecured debt and secured debt. Filing for Chapter 7 bankruptcy will allow you to keep your assets, while filing for Chapter 13 bankruptcy will require you to give up some of your assets in order to keep the rest.
What Is a Debtor Education Course?
Before you can receive any of the bankruptcy relief options, you must undergo credit counseling and complete a debtor education course. Credit counseling will help you understand your financial situation and how to better manage your finances. Debtor education will help you learn how to better manage your finances.
Debtor education courses are offered by:
WHAT DOES IT MEAN WHEN A CREDITOR WANTS ME TO REAFFIRM MY LOAN WITH THEM? IS THAT DIFFERENT FROM REDEMPTION?Secured creditors (those creditors who have collateral for their loans, such as a car or boat) will want you to reaffirm the loan. When you reaffirm the loan, you re-obligate yourself to all of the loan terms just as if you were getting a new loan from the creditor. Although this may sound harmless, it has serious consequences. If you reaffirm and then later default on the loan, you are personally liable to pay the balance and you will have no protection on that debt from the bankruptcy. One of the major changes made to bankruptcy law in 2005 is that a creditor can repossess the collateral if you do not reaffirm. This change does not apply to real estate debt. Your reaffirmation agreement is subject to court approval in some circumstances. If your income is less than your monthly expenses, you may be required to participate in a telephone hearing with the court where you will be required to explain to a bankruptcy judge why the reaffirmation is in your best interest and how you intend to make the payment. More often than not, when you file bankruptcy, you owe more on the collateral securing the loan than it is worth. If your loan is more than 2 1/2 years old, under a process called REDEMPTION, bankruptcy law allows you to reduce the amount owing on the debt to the value of the collateral if you can pay it all at once. Many debtors can find a source of family financing or, perhaps, borrow from a 401K account, etc. and come up with the full value. There is also a company on the internet that specializes in redemption funding for cars. Talk with OREGON FRESH START about this for more information. WOULDN'T IT BE BETTER TO SETTLE MY DEBTS THROUGH A DEBT CONSOLIDATION PLAN? Although there may be a few reputable credit counseling services out there, most will not and cannot give you what they promise. Usually, they promise they can settle your debts for 50 cents on the dollar and that when you get done, you will have great credit. The facts are that (1) most people do not complete the "plans" because they usually do not work, and if you do complete the plan, (2) your credit is trashed. Creditors report to credit bureaus exactly what happened. If you get hooked on a 50% plan, your credit report will show that you did not pay all of the debt and that the unpaid balance was charged off. Most creditors do not waive interest or late fees. In addition, most credit counseling programs will charge you a fee (a portion of each payment) and they often do not send your money to the creditors for several months. This gives them an interest-free loan working with your money. Most debtors would be better off filing a Chapter 7 or Chapter 13 bankruptcy which can force the creditors to accept your terms of repayment. In addition, and this is a big one, the amount that was charged off by the creditor will likely be reported to the IRS with a 1099 tax form and you will be required to pay income taxes on the charged-off amount which will be a very unpleasant surprise for you when you file your tax returns for that year. CAN STUDENT LOANS BE DISCHARGED? Yes, but it is not easy. It will also, probably, be expensive. Once upon a time, federally guaranteed student loans were dischargeable if the loan was more than 7 years old. In 1998, the federal government changed all that. Now, federally guaranteed student loans cannot be discharged unless you can prove that being required to repay the loan will cause an undue hardship - not just a hardship, but an "undue" hardship. To have an opportunity to prove your case, you will be required to sue the federal government in bankruptcy court through an adversary proceeding. You will be required to prove all of the following: repayment of the loan would prevent you from maintaining a minimal standard of living your financial circumstances are not likely to change in the foreseeable future you made a good faith effort to repay the loan before you became unable to pay Frequently, the federal government will try to show that you could get a reduced payment plan by going through a consolidation program that will stretch out your payments for 20 years or more based upon an "ability to pay." In short, it is possible to discharge a student loan, but the government has made it very difficult. Also, remember that the government has a raft of lawyers to defend the federal government in the lawsuit who are paid for by your taxes. On the other hand, you will be required to pay for your attorney.
ARE LOANS OWING TO RELATIVES GIVEN SPECIAL TREATMENT IN BANKRUPTCY?It is not uncommon for you to owe money to a relative. As discussed in other answers to questions, you must list every debt. This includes debts you owe to your family members. The bankruptcy court looks closely at loan transactions between family members. As we all know, if we owe money to several creditors and one of them is a family member, we will probably be inclined to pay the family member first. In a bankruptcy context, this often means that family members have been paid while the other creditors have not been paid. One of the main ideas behind filing bankruptcy is that all creditors share your misfortune equally. One of the questions asked in the bankruptcy petition is whether you have repaid any loans from relatives within the past year. If you have, you are required to disclose the amount. If the amount is large enough, the bankruptcy trustee has the power to get the money back from the relative and spread it out equally among all the creditors. While there is no set rule as to what amount is "large enough," if the amount were $2,000 or more, that would definitely be "large enough." There are other factors that go into the trustee's decision, including whether you have any other assets which exceed the exemption amounts and how likely it is the trustee can obtain a return of the money from the relative. A relative who has already spent the money and whose only source of income is Social Security is not likely to be a target for the trustee. If you have a loan from a relative and are considering filing bankruptcy, stop paying on the loan until you consult with OREGON FRESH START.
CAN I TRANSFER PROPERTY TO A FRIEND OR RELATIVE TO PROTECT IT FROM BANKRUPTCY?If you transfer any of your property to a relative, even by selling it, within 1 year of filing for bankruptcy, the bankruptcy trustee can reverse that transfer if it was transferred for less than the fair market value of the property. For example, if you gave Uncle Joe your car 30 days prior to filing bankruptcy because you did not want it to show as an asset in your bankruptcy, the trustee has the power to sue Uncle Joe and get the car back. Unfortunately, some people engage in such an activity before consulting with an attorney. It is also not advisable if you have already made the transfer to attempt to transfer it back without first obtaining expert legal advice.