Reaffirmation of Debts: What, When, and Why

Reaffirmation is a way to keep certain assets during a bankruptcy that you might otherwise have to forfeit.  A Chapter 7 discharge will wipe out your personal liability for dischargeable debts (including mortgages and auto loans). However, if you are current on the monthly payments and want to keep the item the creditors will routinely forward a new agreement with the original terms (or sometimes even slightly better terms) for you to sign thus reaffirming those terms in a new contract.

When you finance the purchase of a home or a car the lender will have a lien on the house or car (it is their collateral for the loan).  Under a Chapter 7 debt discharge scenario, the lien remains attached to the collateral, and the creditor will still have the right to foreclose or repossess if you don’t make your payments. Debts like these (where your property can be held until the loan is repaid) are called secured debts.

When you reaffirm a secured debt, you are in essence signing a new agreement that reaffirms your personal liability on the loan. In other words, you are signing away your discharge rights on the debt you are reaffirming. This is a serious commitment and one that you should consider carefully. It is advisable to consult with your bankruptcy attorney before taking this step. Keep in mind that a reaffirmation agreement must be filed within 60 days after the meeting with the bankruptcy trustee.

Here are some reasons why you might want to reaffirm a debt:

  • Rebuild your credit. When you reaffirm a debt, your payments on that loan will continue to be reported to the credit reporting agencies by the lender; this will aid you in the credit rebuilding process.
  • Opportunity to renegotiate with lender for more favorable loan terms since the reaffirmation constitutes a new contract.
  • Prevent repossession or foreclosure when you want to continue making payments on the loan.

Can Creditors Publish My Name to Embarrass Me?

As bankruptcy attorneys, we get a lot of calls from people who are being harassed by creditors. In many cases, these individuals are extremely frustrated. It seems to them that the tactics that are being utilized are not reasonable or fair. Here at OlsenDaines, we apply a simple rule that is almost always on the money when it comes to creditor harassment: If it seems to you like it should be illegal, it probably is, and there are legal steps that you can take to bring the harassment to a screeching halt.


Fair Debt Collection Practices Act


Back in September of 1977 a piece of legislation was enacted as a response to very aggressive tactics that were often being utilized by collection agencies. It is called the Fair Debt Collection Practices Act (FDCPA). This measure spells out the parameters that people who work for collection agencies must follow when they are attempting to collect debts. To go directly to the question that serves as the title of this blog post, under a provision contained within the FDCPA, collection agencies are not allowed to publish your name as a delinquent debtor in an effort to embarrass you. (One caveat would be that in some jurisdictions, collection agencies that collect outstanding child support payments are allowed to publish names without violating this law.)


There are many other provisions contained within this act that protect consumers. If the collector is aware of the fact that you are not allowed to take collection calls at work, they cannot call you while you are on the job. There are also restrictions with regard to the hours during which they are allowed to contact you. Under typical circumstances, their window is confined to the hours between eight a.m. and nine p.m. Plus, they cannot contact you at all if they are aware of the fact that you have legal representation. These are a handful of the restrictions, but there are a number of others.


Schedule a Free Debt Relief Consultation Today


You do not have to sit idly by while aggressive, demeaning collectors constantly invade your life. Many people fall into unmanageable debt as a result of circumstances that are out of their control, and regardless of the underlying causes, you have legal recourse. If you would like to discuss your options with a Portland, Oregon bankruptcy attorney, we would be more than glad to assist you. We provide free consultations to people in Portland and a number of other cities scattered throughout the state of Oregon. To set up an appointment, send us a brief message through our contact page and we will take care of the rest.


Is Chapter 11 Strictly for Large Corporations

If you have been paying attention to the business news over the years, you have probably read about instances of very large corporations filing for Chapter 11 bankruptcy. Names like Chrysler, General Motors, Dow Corning, United Airlines, and Texaco may come to mind. Without question, Chapter 11 bankruptcies are commonly utilized by large corporations that are struggling with debt that they simply cannot manage. However, this form of bankruptcy can be useful for businesses that are not among the Fortune 500. Read on to get the details.


Reorganization Bankruptcy


A Chapter 11 is a reorganization bankruptcy. In most cases, the intention is to restructure the financial responsibilities in a manageable fashion so that the business can continue to operate. However, in some instances, the goal will be to effectively liquidate the assets and shutter the enterprise.


There is another type of bankruptcy that works in a similar manner called Chapter 13. If you are a sole proprietor or a general partner in a business, you are personally responsible for your business debts. As a result, you can file for Chapter 13. However, many small businesses do not use these structures. They are established as corporations, limited liability companies, or limited partnerships. These entities cannot use Chapter 13; they must use Chapter 11 bankruptcy. This is why Chapter 11 is not strictly for large, publicly held corporations.


In very limited cases, a Chapter 11 bankruptcy can be filed by an individual who cannot qualify for a Chapter 13 bankruptcy. There is a debt limit with regard to a Chapter 13 filing, and it is updated every three years. At the time of this writing in 2017, the Chapter 13 limit for secured debts is $1,184,200. For unsecured debts, the limit is $394,725. If your level of debt precludes you from a Chapter 13 filing, you could choose to file for a Chapter 11 bankruptcy.


Act in a Fully Informed Manner


We have covered one aspect of the intricate bankruptcy maze in this brief blog post. If you are a business person or an individual who is struggling with debt, you should certainly discuss all of your options in detail with a licensed bankruptcy attorney. Our firm serves clients in Portland, Eugene, and many other cities in Oregon, and we also have a couple of offices in Washington. We offer free consultations, and you can reach out to us through our contact page to request an appointment.



Am I Personally Responsible for My Business Debts?

Many people are in business for themselves, and being your own boss certainly has its advantages. Of course, there are certain responsibilities that go along with business ownership as well. The lay of the land can be a bit tricky when you are trying to determine whether you can be held personally responsible for debts that are incurred by your business. We will provide some insight in this blog post.


Business Formation


When you are starting your own business, you should be very discerning about the business entity that you choose, because it will have everything to do with personal responsibility for business debts. If you are a sole proprietor, there is no separation between you as an individual and the actions of your business. As a result, you would absolutely be responsible for debts incurred by the business. The same thing is true of a general partnership. Each partner is responsible for all of the partnership’s debts. It may not sound fair, but if you have personal assets, and your partner is insolvent, you would be responsible for all of the debts, not just your 50 percent share.


Things are different with limited liability companies and corporations. Generally speaking, you would not be personally responsible for business debts under these structures. However, there are exceptions to this rule. If you personally guarantee a business-related debt in writing, it would be your personal responsibility. This is not uncommon, because some vendors, leaseholders, and others know that the business entity would not be liable, so they insist on personal guarantees.


Of course, if you put personal property up as collateral for a loan that you will use for business purposes, the lender could seek to attach the property if you don’t pay the debt. If you use a personal line of credit or a credit card to infuse your business with resources, the business structure would do nothing to limit your liability. When you digest all of the above information, you can see why you should think long and hard about the business structure that you should utilize when you are establishing your enterprise.


Schedule a Complimentary Case Evaluation


If your business debt is becoming unmanageable, there are steps that you can take to ease the burden. We are here for you if you would like to discuss them with a licensed Portland, Oregon bankruptcy attorney. Our firm offers free consultations to people in The City of Roses and many other communities throughout the Beaver State. To schedule an appointment, call us toll-free at 1-800-682-9568.



Can I File for Bankruptcy More Than Once?

Bankruptcy can be a pathway toward a fresh financial start if you simply cannot keep up with all of your financial obligations. Many of your debts will be discharged, and you can regain your footing and look ahead toward a fruitful future. If all goes well, you may never look back. You can do all the right things to rebuild your credit record, and in either seven or 10 years depending on the type of bankruptcy that was filed, it will no longer be on your credit report.


This successful scenario often plays itself out, especially if you work with a bankruptcy attorney that will help you understand the right steps to take. However, in some cases, circumstances can call for a subsequent bankruptcy filing. It is possible to file for bankruptcy more than once, but there are some important details that you have to understand with regard to the timing.


First, let’s look at multiple filings of a Chapter 7 bankruptcy. This type of bankruptcy is a liquidation bankruptcy, and unsecured debt can be discharged when you successfully file. While there is no law that prevents you from filing another Chapter 7 bankruptcy within a particular time frame, debts cannot be discharged unless you wait for at eight years to file again. The time frame for filing for a new Chapter 13 discharge is two years after the first filing.


Things are different when you file once, and you subsequently decide to file for a different type of bankruptcy. If you were in Chapter 7 bankruptcy, you could potentially qualify for a discharge under a Chapter 13 four years after the initial filing. When you flip the scenario around for a Chapter 13 filer that wants to file for Chapter 7 at a later date, you have to wait for six years if you want to get a discharge. However, there are two exceptions to this rule. There is no waiting period at all if you repaid the entirety of your unsecured debt in the Chapter 13 repayment plan, or 70 percent if it is determined that you made a sincere and concerted effort to satisfy your obligations.


Give Us a Call to Schedule a Free Case Evaluation


If you would like to learn more about multiple bankruptcy filings or any other debt relief matter, we are here to help. We offer free consultations to people in Eugene, Portland, Tigard, and several other cities in Oregon, and we also have offices in Vancouver and Tri-Cities in Washington. To schedule a free consultation, call us right now toll-free at 1-800-682-9568.

What is a Bankruptcy Means Test?

A Chapter 7 bankruptcy is a liquidation bankruptcy. With this form of bankruptcy, property that is not exempt would be turned over to a bankruptcy trustee. In most cases, there is little to no non-exempt property to surrender to the trustee. However, if there is non-exempt property, the trustee would be required to sell the property and use the proceeds to pay back as much of the debt as possible. We should point out the fact that debts are prioritized, and unsecured debts, like credit cards and unpaid medical bills, are looked upon as non-priority debts.


A Chapter 7 bankruptcy can be a potential solution for people who do not have enough disposable income to pay down all or some of their debts over time. To determine whether or not a person is qualified for Chapter 7, a means test is administered. We have offices in Portland, Eugene, Medford, Salem, and a number of other cities in Oregon, and we also have locations in the state of Washington. If your income is below the median income in your state of residence, you would automatically pass this means test, and you would qualify for a Chapter 7 filing.


You are not automatically precluded from Chapter 7 eligibility if your income exceeds the median income in your state. There is a formula that is utilized to measure an applicant’s ability to use his or her disposal income to adhere to a payment plan over a three-year or five-year period. If you have very limited income left after your basic life responsibilities are met, you may still be able to qualify for a Chapter 7 bankruptcy filing.


All is not lost if you cannot file for a Chapter 7 because you cannot pass the means test, because a Chapter 13 bankruptcy can be a viable alternative. If you would like to discuss your options with a knowledgeable member of our team, our doors are open. We can get to know you, gain an understanding of your situation, and make the appropriate recommendations. To schedule a free consultation, send us a message through our contact page and we will be back in touch with you shortly.


What is a Bankruptcy Estate?

A Chapter 7 is a commonly utilized form of bankruptcy that can give you a fresh start if you are incapable of meeting your financial obligations. As long as you do not have enough disposable income to pay back your debts over time, you can probably qualify for this form of bankruptcy. Unsecured debts, which would include unpaid medical bills and credit card debts, could be discharged if you successfully file for a Chapter 7 bankruptcy.


This is a liquidation bankruptcy, so you are required to turn over all of your nonexempt property to a bankruptcy trustee. The property would comprise your bankruptcy estate, and the trustee would be required to liquidate the property to pay back some of the debt. Certain debts are considered to be priority debts, and they would be paid first. Once the property is liquidated and the monies are exhausted after the disbursements, most unsecured debt that is left unpaid would be discharged.


Exempt Property


When you hear about the bankruptcy estate, you may have some serious concerns with regard to surrendering your property so it can be liquidated. Along these lines, there is some good news to report: some of your most valuable property is exempt. We have offices in Eugene, Portland, Medford, Salem, and several other cities in Oregon. In our state, if you own a home we can protect up to $47,000 in equity as exempt.


Plus, health savings accounts are not subject to liquidation, and you could keep up to $23,000 if you receive a settlement or a reward via a personal injury claim. Up to $3775 in equity in a motor vehicle would be exempt for each individual as well. These are a handful of the exemptions, but there are a number of others.


Our Doors Are Open!


You have recourse if you are faced with overwhelming debt that is having a negative impact on your life. A Chapter 7 bankruptcy filing is one possibility, but there are other debt relief options that you may want to explore. If you would like to discuss your situation with one of our licensed bankruptcy attorneys, our doors are wide open. We offer free consultations to people throughout the state of Oregon, and we also have offices in Vancouver, and Tri-Cities in Washington. To schedule an appointment, send us a message through our contact page.


Will Bankruptcy Impact My Retirement Funds?

Before we address the way that bankruptcy may or may not impact your retirement funds, we should explain the basic differences between a Chapter 7 and a Chapter 13. These are the two types of bankruptcies that are most commonly utilized by individuals. A Chapter 7 is a liquidation bankruptcy. Unsecured debts like credit card debts and medical bills are discharged under this form of bankruptcy. If you are current on your mortgage payments and your equity falls within a certain limit, you can retain ownership of your home if you were to file for a Chapter 7 bankruptcy.


You have to pass a means test to be able to qualify for a Chapter 7 filing. If your income is less than the median in the state of your residence, you would automatically pass this test. Getting back to the retirement question, if you are receiving Social Security benefits, they would not be counted when you are calculating your eligibility for Chapter 7 under the means test.


A Chapter 13 bankruptcy would be an option if you cannot pass this means test. It may also be a better choice for you even if you could qualify for Chapter 7, particularly if you are behind on your mortgage. This is a reorganization bankruptcy. Your disposable income is utilized to pay back some of your debts over a three-year or a five-year period. Mortgage arrearage could be corrected over the course of this repayment arrangement. When it comes to Social Security when you are in Chapter 13, the laws vary with regard to whether your benefits must be claimed as income, so your attorney will discuss this with you.


Under federal laws, virtually all retirement accounts are looked upon as exempt property when a bankruptcy is filed. The types of accounts that are exempt include 401(k)s, individual retirement accounts, 403(b)s, Keoughs, and profit-sharing plans. Most pension plans are also safe when you file for bankruptcy.


We Are Here to Help!


If you have questions about debt relief, our firm can provide you with answers. We have offices in Salem, Tigard, Albany, Portland, and other major metropolitan areas in Oregon, and we also serve clients in Tri-Cities and Vancouver in Washington. Our firm offers complimentary, no obligation initial consultations, and you can request an appointment if you send us a quick message through our contact page.



Chapter 13 Bankruptcy: Three Things You Need to Know


If you are in need of debt relief, you may be thinking about bankruptcy. It is important to understand the fact that there are multiple different types of bankruptcies. The ideal choice will depend upon your circumstances, so you should have some basic knowledge regarding your options. A Chapter 13 bankruptcy is one possibility, and when you absorb these three facts, you will come away with a rudimentary understanding.


1.) An automatic stay is granted.


Many people consider bankruptcy because they are being inundated with collection letters and threatening calls. When you file for a Chapter 13 bankruptcy, you get immediate relief, because an automatic stay will go into effect. This prohibits creditors from trying to collect on the unpaid debts, so you have some time to regroup as you prepare yourself for life after bankruptcy.


2.) You can keep your property.


You may assume that you have to surrender your property when you file for any type of bankruptcy. In fact, this is not the case with a Chapter 13. This is a reorganization bankruptcy rather than a liquidation. If the bankruptcy goes through successfully, you will be able to maintain ownership of your property.


3.) Your debts are paid back over time.


When you file for Chapter 13 bankruptcy, you submit a repayment plan to the court. After the basic necessities of life are met, the remaining disposable income must go toward paying back your debts. The repayment plan lasts for 3 to 5 years. Under bankruptcy laws, certain types of debts are priority debts, and they would be paid first. Nonpriority debts, like credit card bills, would be at the end of the list. Depending on the extent of your disposable income, some or all of this non-priority debt may be discharged.


Schedule a Free Case Evaluation


Now that you know a little about Chapter 13, you may want to sit down and discuss this option and other possible courses of action with a licensed bankruptcy attorney. If you live anywhere in the state of Oregon, we probably have an office near you, as we have locations in Eugene, Portland, Grants Pass, Medford, Coos Bay, and a handful of other cities. We also have an office in Vancouver, Washington. To schedule a free, no obligation case evaluation give us a call at 1-800-682-9568.

Bankruptcy and Credit Counseling

There are certain requirements that must be met before you can file for bankruptcy. The government wants to make sure that you know exactly what you are getting into, so you have to complete a credit counseling course before you can go through with a bankruptcy filing. There are certain organizations that offer this course that are approved by the federal government. We have offices in Vancouver and Kennewick in the state of Washington, and we also have locations spread throughout the state of Oregon. There is a list of approved credit counseling course providers on the website of the United States Department of Justice, and you can click one of the following links if you would like to identify a credit counseling course provider: Washington credit counseling and Oregon credit counseling. Under federal guidelines, the course must be successfully completed less than 180 days before the bankruptcy filing.

Finishing the credit counseling course is just one of the requirements that must be met if you want to file for a Chapter 7 bankruptcy. This is a liquidation bankruptcy, and it allows for the discharge of your unsecured debts. If you can rid yourself of debts like credit card balances and unpaid medical bills, you may be able to keep up with your other responsibilities more comfortably. To qualify for this type of bankruptcy, you must have limited disposable income. A means test is applied to determine whether or not you qualify for Chapter 7. If your income is less than the median income in your state, you qualify automatically. However, it may still be possible to qualify for Chapter 7 if the state determines that your disposable income is very limited.

In addition to the credit counseling course, there is another educational hurdle that you must cross when you file for bankruptcy. Debts cannot be discharged until you complete a debtor education program, and once again, you can obtain a list of approved course providers if you visit the U.S. Department of Justice website.

Act Now to Regain Control of Your Finances!

Our firm can help if you are struggling under a mountain of debt that you simply cannot manage. We offer free, no obligation case evaluations, and you can set up an appointment that conveniently fits into your schedule if you call us right now at 800-682-9568.