What Happens to Your Unpaid Debt When You Die?

What happens to unpaid debt after death? It has to be handled through the probate process. A person who uses a will to handle his estate will name an executor or personal representative in the document. This individual will be responsible for the estate administration tasks. The process will be supervised by the probate court. Inheritances will not be distributed to the heirs until after the obligations of the estate are satisfied.

During probate, the executor is required to notify creditors to file a claim for payment of unpaid debts. Assets that are part of the estate will be utilized to pay any legitimate debts. What happens if there isn’t enough money in the estate to pay the unpaid debts? Under these circumstances, surviving family members are not held responsible even though the creditors will receive less than 100% of their claims.

There are some types of transfers that will not be subject to the probate process. For example, a person can add a beneficiary when opening a bank account or brokerage account. This is sometimes called a payable on death account or transfer on death account. The beneficiaries that are named on the account will have no access to the account while the holder of the account is still living. At the time of death, the beneficiary will assume ownership of the funds. Creditors can not step in to try to attach any of these assets. The same thing is true when it comes to insurance policy proceeds.

For real estate, Joint tenancy with right of survivorship is another arrangement that can protect assets from creditors. Let’s say you own your home outright, and you want your daughter to inherit the home after you are gone. You can add your daughter to the title or deed of the property. She will become a joint tenant or co-owner. After your death, she will assume ownership of the home in its entirety, and your creditors will have no ability to touch the home. There are other types of deeds that can also accomplish the same purpose.

Clearing up debts before passing away is the best way to ensure your creditors don’t come before your heirs. Our firm can help you clear up your unpaid debts before you pass away so that you can feel good about the legacy that you will be leaving behind to your loved ones. A Chapter 13 bankruptcy can make your debts more manageable, and a Chapter 7 bankruptcy can completely wipe away many different types of debt. We have locations that can be conveniently reached from Eugene, Portland, Medford, and a number of other major cities in Oregon and Washington. If you will like to schedule a free consultation, give us a call at 1-800-682-5568.

What Can I Keep When I File for Bankruptcy?

If you are thinking about filing for bankruptcy, you may be concerned about the possibility of surrendering all your property so that it can be liquidated to pay back your debts. In fact, you may be able to keep some or all of your property when you file for bankruptcy. It will depend on the circumstances and the type of bankruptcy that you file. First, let’s look at the way that property is handled when a Chapter 7 bankruptcy is filed.

This type of bankruptcy is called a liquidation bankruptcy. Property that is not exempt would become part of the bankruptcy estate, and it would technically be liquidated by the trustee to pay back some of the outstanding debt. However, in many cases, there is no nonexempt property to speak of, so there are no losses. You could keep exempt property when you file for Chapter 7, including your home and your motor vehicle, assuming you have limited equity and you are up to date on your payments. Limited personal property and the tools of your trade are exempt, there are a number of other exemptions.

To qualify for a Chapter 7 bankruptcy, you must pass a means test, because you have to make an effort to pay back your debts if you have the means to do so. If your income is less than half the median in your state of residence, you would pass this test. You could possibly pass the test even if your income exceeds the median if your financial responsibilities severely limit your disposable income. A formula is utilized to make this determination.

Chapter 13 bankruptcy would be an option for you if you cannot pass the means test. This is a reorganization bankruptcy. Your debt is restructured to become manageable, and you use your disposable income to make payments over a three-year or five-year period. It can also be the right choice if you are behind on your mortgage and you want to prevent a foreclosure. You can’t pay back the arrearage to stop a foreclosure if you file a Chapter 7 when you are behind on your mortgage payments. However, you can fold it into a repayment plan if you file for Chapter 13. With a Chapter 13, you can keep all your property if you honor your repayment plan and keep your ongoing obligations current.

Set Up a Free Case Evaluation

We have shared some of the basics with regard to property retention in this brief blog post, but you probably have more questions if you are thinking about a bankruptcy filing. If you would like us to provide you with answers, we would be more than glad to do so. Our firm offers free consultations to people in Portland, Eugene, Bend, and a number of other cities in the state of Oregon. To set up an appointment, call us right now at 1-800-682-9568.

Can Bankruptcy End a Garnishment?

If your wages are being garnished by a creditor, your life can become very difficult. After all, if you were in a comfortable financial situation, you never would have fallen behind on your debts in the first place. The last thing you need is to see a smaller number every time you receive a paycheck or a direct deposit from your employer. While this is going on, you probably have other debts you must pay, so you have to try to do more with less. The situation can be impossible to manage, but the good news is that there are legal steps that you can take to end a garnishment to create some financial space for yourself.

Bankruptcy can provide a host of benefits, and a filing can have an immediate positive impact. When you file for bankruptcy, you receive an automatic stay right away. This stops most creditors from proceeding with their collection efforts. As a result, let’s say that you fall behind on your credit card debt, and the credit card company files a lawsuit against you. They receive a judgment from the court, and it includes a wage garnishment.

If you file for a Chapter 7 bankruptcy, you would get an automatic stay. This disallows most types of creditors from seeking payment as long as the stay is in effect. It would extend to the wage garnishment the court imposed as part of the judgment. With a Chapter 7 bankruptcy, unsecured credit card debts can be discharged by the court after the stay is lifted, so the garnishment would end permanently if the debt is discharged.

While it is true that a bankruptcy filing can put an end to a garnishment, it is not necessarily going to be the right choice under all circumstances. You have to remember that a Chapter 7 will remain on your credit report for 10 years, and it will be very difficult for you to get lines of credit at reasonable interest rates.

The decision can be a difficult one, and this is why it is wise to explore all your options with the benefit of professional legal counsel. As bankruptcy attorneys, we hear a lot of the same feedback from our clients after we have helped them get back on track. Though they are quite relieved, many of them share a common regret: They wish that they had reached out to us sooner.

Indeed, seemingly insurmountable problems can be quickly and efficiently addressed if you have strong advocacy by your side. We have offices in Portland, Grants Pass, Medford, and several other metropolitan areas in the state of Oregon, and we also have offices in Tri-Cities and Tacoma, Washington. If you would like to schedule a complimentary, no obligation case evaluation, send us a message through our contact page and we will get back in touch with you to nail down an appointment time.


What Is a Priority Debt?

If you file for bankruptcy, the different debts that you have are not all created equal in the eyes of the law. Some debts are considered to be priority debts that cannot be discharged through a bankruptcy filing. Let’s look at the details as they apply to the two most common types of bankruptcy that are filed by individuals.

Priority Debt and Chapter 7 Bankruptcy

A Chapter 7 bankruptcy is called a liquidation bankruptcy. Property that you have that is not exempt would become part of your bankruptcy estate. This property would be sold by the trustee, and the proceeds would be used to pay back a portion of your debts. Priority debts would be the first debts that would be paid by the bankruptcy trustee. These would include recent unpaid income taxes, alimony, child support, compensation that you owe to employees, and a handful of other less common types of debt.

Priority debts such as these will never be discharged, even after the bankruptcy is finalized. As a result, the creditors can continue to seek payment if they were not paid in full by the bankruptcy trustee after the liquidation. Plus, property that you acquire after the bankruptcy will not be part of the bankruptcy estate. As a result, priority debt creditors could seek to attach your wages going forward.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy is a reorganization rather than a liquidation. You present a reorganization repayment plan to the bankruptcy court, and you are given three or five years to complete the plan. Under this type of bankruptcy, you don’t necessarily lose any of your property, and you may not have to pay all your creditors in full. In fact, you may not have to pay some unsecured debts at all.

The priority debts in Chapter 13 are identical to the priority debts that we described above in the Chapter 7 section. These debts must be paid in full over the term of your reorganization plan. Though it is not technically a priority debt, secured claims, like mortgage arrearage that is folded into the repayment plan, must be paid in full as well.

Schedule a Complimentary Case Evaluation

We have offices in Eugene, Grants Pass, Klamath Falls, Tigard, Salem, Portland, and a handful of other cities in Oregon and Washington. If you would like to schedule a free consultation, give us a call at 1-800-682-9568.

Discuss Unfair Debt Collection With a Bankruptcy Lawyer

If you are getting phone calls from collection agencies that are getting out of hand in one way or another, you may want to discuss your situation with a bankruptcy lawyer. We serve clients in Salem, Roseburg, Medford, Klamath Falls, and numerous other cities in Oregon, and we also have offices in Washington. Many of our clients reach out to us because they simply cannot tolerate the nature of the collection calls that they are receiving, and we can always provide solutions.

The Fair Debt Collection Practices Act (FDCPA) spells out guidelines that collection agencies must abide by when they contact debtors. We should emphasize the fact that it is not applicable when a creditor is contacting you directly. The FDCPA protections do not apply until and unless the debts are handed over to a collection agency.

One of the provisions contained within the Fair Debt Collection Practices Act will provide you with immediate relief if you engage our firm to represent you. Once the collection agency is aware of the fact that you have legal representation, they cannot contact you directly; they would have to communicate with us. This is a very efficient way to get the collectors off your back as we work with you to develop a debt relief strategy.

Bankruptcy is going to be the right choice for many people who are struggling with a significant level of unmanageable debt. After you engage our services and the collection calls come to a halt, you could potentially file for bankruptcy. If you decide to go this route, you would get an automatic stay. This would temporarily stop most collection efforts, and this could apply to your original creditors as well as the collection agencies.

You would typically choose between a Chapter 7 and a Chapter 13. With a Chapter 7 bankruptcy, unsecured debts can be completely discharged, and you can go forward with a fresh start. A Chapter 13 bankruptcy is a reorganization that allows you to use your disposable income to pay back your debts, or a portion of your debts, over time. The form of bankruptcy that is right for you will depend upon the circumstances. In either event, the collection calls will cease, and you will be able to move on with your life free of debt collector harassment.

There is no reason to accept abuse from a collection agency representative who is stepping out of bounds. Help is just a phone call away, and our firm offers free case evaluations for people in Vancouver and Tacoma, Washington and just about everywhere in the state of Oregon. If you would like to reach out, you can give us a call right now at 1-800-682-9568.

Can’t Pay Student Loan Debt? Here Are Your Options

If you have not looked at the subject in a while, you may be unpleasantly surprised when you learn about the current state of college tuition costs. The College Board has compiled some very meaningful statistics that shed light on the subject. During the 2016-2017 school year, the average annual cost for private college tuition was over $33,000. The average tuition charge for a public university was about $9600 for in-state students, but that figure skyrocketed to almost $25,000 for students from out-of-state who are attending public institutions of higher learning.

The cost of a college education is considerable, but at the same time, the price that you will pay if you go through life without an educational underpinning will probably be much more significant. However, when you digest these tuition figures (and they don’t include living expenses and supplies), you can understand why so many students accumulate significant student loan debt. According to Forbes, the average amount of student loan debt that was being carried by students in 2016 was just over $37,000. Of course, this is the average, so some students owed much more.

Can Bankruptcy Help?

Many students who graduate from college don’t earn enough money to keep their student loan payments current. Plus, there are individuals who are carrying student loan debt who never actually graduated. It would make sense to assume that you could file bankruptcy to wipe away your student loan debt, but in fact, bankruptcy is rarely going to be an option. Student loan debts are not discharged through a Chapter 7 or Chapter 13 bankruptcy filing unless you can prove that paying the debts would create an undue hardship for you. Very few people will be able to convince the court that they are in this position.

Outside of Bankruptcy

There are a few actions that you can consider if you are drowning in a sea of student loan debt. A lender may grant you a deferment or a forbearance that would suspend your payment plan for a temporary, agreed-upon interim. Plus, a number of federal student loan forgiveness programs exist, and this is an avenue that is worthy of exploration.

Schedule a Consultation Today

If you would like us to review your financial situation, including your student loans, we would be glad to provide a free case evaluation. We have offices in many different cities in Oregon including Eugene and Portland, and we also have locations in the state of Washington. To set up an appointment, send us a message through our contact page.

Are You Responsible for Your Spouse’s Credit Card Debt?


Credit card debt tends to sneak up on you, and it can become a problem for many people. There are those that make irresponsible purchases, but overwhelming credit card debt can accumulate for other reasons. For example, if your child needs a tonsillectomy, and you don’t have health insurance or a significant amount of money in the bank, what are you going to do? Medical bills are one underlying cause of unmanageable credit card debt, but there are others. A loss of income can necessitate excessive credit card usage, and people sometimes run up credit card debts because they are trying to assist family members or friends.

The matter of credit card debt responsibility is pretty cut and dried if you are single and there are no co-signers on your account or accounts. However, what about people who are married? If your spouse cannot pay his or her credit card debt, are you liable? The answer depends on a number of different factors, including the state that you live in. Most states are common law states, and in these places, you would typically not be responsible for your spouse’s personal credit card debt as long as you are not a co-signer. However, creditors could seek to attach your spouse’s share of jointly owned property.

We practice in Oregon and Washington. Oregon is a common-law state, but Washington is one of a handful of community property states. In a community property state, generally speaking, you could be held responsible for credit card debts that your spouse incurred while you were married. Debts that were owed before the marriage would not fall into the community debt category. If a personal credit card was used to benefit both parties, it would typically be looked upon as community debt. On the other hand, if the purchase only benefited the cardholder, his or her spouse may not be liable for the debt.

If you would like to explore avenues that can lead to credit card debt relief, our firm would be more than glad to assist you. We offer free case evaluations to people in Grants Pass, Medford, Coos Bay, and a few other cities in Oregon and Washington, and you can set up an appointment right now if you give us a call at 1-800-682-9568.

Develop Good Habits to Prevent Unmanageable Debt

Advertising has always made an impact on consumers, but the influence has been taken to another level now that we all spend a lot of time on the Internet. Search engines inundate you with images of products that you have showed interest in through your browsing history, so you are constantly tempted. Plus, in many cases, when you do decide to make a purchase, you are offered a discount if you apply for a line of credit with the company. Before long, it can seem as though you can buy anything you want without reaching into your pockets to lay out any cold hard cash. Over time, this misguided perspective can lead to unmanageable debt.

Without question, the system is set up to invite people to spend beyond their means, but you don’t have to fall into the trap. If you develop good habits when you are a young adult, you can utilize credit wisely when it is prudent, and steer clear of behavior that can leads to unmanageable debt and a subsequent bankruptcy filing. To keep a finger on the pulse of your financial health, you should always be aware of your credit score. Many credit cards provide cardholders with free credit scores on a monthly basis, and there are also websites that you can visit to obtain your score, and some of them are free.

You get the score itself, but you also get an explanation of the factors that are influencing your credit score either positively or negatively. These would include the timeliness of your payments, the length of time that you have had credit, the percentage of your credit lines you have used, and the number of recent credit inquiries. If you keep these core factors in mind when you are making financial decisions that involve the utilization of credit, you will develop the right habits. Of course, the ebb and flow of your credit score will inform you with regard to the impact of your recent credit usage, so you can adjustment your behavior when necessary. Some people will set credit score goals, and this can definitely help to keep you on track.

Without question, good habits can allow you to steer clear of monetary problems, but you do have recourse if you simply cannot pay all your debts for one reason or another. Bankruptcy will be the right choice for many, and our firm can help you understand your options so that you can make sound decisions that get you on a path that leads to financial wellness. We have offices in Eugene, Portland, and a number of other cities throughout the state of Oregon, and we also have locations in Washington. If you would like to schedule a free, no obligation case evaluation, give us a call right now at 1-800-682-9568.

How Can I Avoid Foreclosure?

If you are concerned about the possibility of losing your home because the payments are becoming unmanageable, there are steps that you can take to avoid foreclosure. It is wise to contact your mortgage lender proactively if you come to the realization that you are not going to be able to meet your upcoming obligations. The lender may be able to work with you and make some adjustments so that you can get back on track.

For example, let’s say that you cannot make your payment, but you will be receiving an inheritance in a couple of months after your father’s estate has been probated. Your mortgage holder may be willing to allow you to pay what you can afford for a limited period of time until you receive the bequest. Under different circumstances, you may be able to work out a long-term loan modification. A conversion from a debilitating adjustable rate mortgage to a fixed rate loan could also be a possibility.

The Bankruptcy Solution

Negotiating with your mortgage lender will sometimes be possible, but a bankruptcy filing will be the best choice for many consumers. If you are current on your mortgage payments, but unsecured debts like medical bills and credit card balances are making it hard for you to fulfill all your responsibilities, you may want to file a Chapter 7 bankruptcy. You could maintain ownership of your home, but unsecured debts would be discharged. You would then have more disposable income to pay priority debts like your mortgage.

If you are behind on your mortgage payments, you could choose to file for a Chapter 13 bankruptcy. This is a reorganization bankruptcy. With this type of bankruptcy, your debt is restructured, and you make affordable payments over a 3 to 5-year period. Your mortgage arrearage could be paid back over time as part of the reorganization arrangement, and you would be able to maintain ownership your home as long as you keep the ongoing monthly payments current.

Now that you have digested this information, you may be ready to take direct action. Our firm offers free consultations to people in Salem, Grants Pass, Klamath Falls, Tigard, Roseburg, and several other cities in Oregon and Washington. If you would like to set up an appointment, send us a message through the contact page on this website or call us at toll-free at 1-800-682-9568.