5 Advantages to Filing for Bankruptcy

Declaring bankruptcy is a means and a right to get a fresh financial start. It allows individuals or businesses to resolve financial issues, rebuild credit, put a stop to aggressive debt collecting actions, and discharge certain kinds of debt that have become unmanageable. Here are 5 advantages to declaring bankruptcy.

  1. Address missed payments, defaults, repossessions, and lawsuits that are keeping your credit score down. While bankruptcy will also hurt your credit score, it is often an easier and quicker way to rebuild your credit score than to try and deal with each creditor individually over a number of years.
  2. Put a stop to creditors’ aggressive debt collecting practices like harassing phone calls, dunning letters, repossessions, and declined transactions. Even in the case of student loans, which are not dischargeable, at least you can prevent future aggressive collecting actions.
  3. You’re wiping the slate clean. The opportunity to get a fresh financial start should not be underestimated. While bankruptcy can have its own stresses, there is a great deal of peace of mind and relief to be gained from declaring bankruptcy. And keep in mind that you will probably end up keeping all of your personal possessions, either because of exemptions or lack of interest from creditors.
  4. While being in a disastrous financial situation often becomes all too public, bankruptcy is something you can keep fairly private. Friends, co-workers, and even your family do not have to know that you have filed for bankruptcy (unless you owe them money as well). The only time your bankruptcy will show up is on a credit history report, and as stated above, that can sometimes make a better statement to a lender than being stuck in a financial quagmire. And even if your employer was to find out, it is illegal under bankruptcy laws for an employer to discriminate based on bankruptcy.
  5. Debt discharge. This is an obvious one, but it’s huge. All of the (unsecured) debt that has been making your life miserable will disappear.

 

Are All Debts Discharged in Chapter 7?

You may have heard that you can extinguish all of your debt completely in one fell swoop if you file a Chapter 7 bankruptcy. In many cases, most of your debt can be discharged through a successful Chapter 7 filing, and all debts could potentially be discharged depending on the nature of the encumbrances. However, there are some debts that can never be discharged through bankruptcy.

 

For the most part, tax debts are not dischargeable. Tax liens and property taxes that have been assessed within a year of your bankruptcy filing date cannot be discharged.  If you are an employer, taxes that you are required to pay on behalf of your employees, like payroll taxes, can’t be discharged. Plus, sales taxes that have been paid to you by customers that you are supposed to pass along the government are not dischargeable. Though taxes are usually non-dischargeable, when very specific circumstances exist, it is possible to discharge some income tax debts.

 

If you are required to pay spousal support or alimony, the bankruptcy filing will do nothing to shield you from your responsibilities. The same thing is true for child support or any debts that you owe to your spouse that came about due to a dissolution of marriage. Any legal fees that you may have incurred during a child custody or child support matter would not be dischargeable. If you have financial obligations as a result of a judgment against you after a drunk driving accident that caused an injury, the debt will not be discharged in bankruptcy. You can see a complete list of non-dischargeable debts if you visit this page on the Cornell University Law School website.

 

The debts that we have been looking at simply cannot be discharged, but there can also be procedural barriers that prevent discharges when they could have otherwise been granted. You have to fill out detailed financial disclosure forms when you file for bankruptcy, and if anything is done incorrectly or dishonestly, discharges can be denied. You also have to complete a debtor education course to qualify for a discharge.

 

Set Up a Complimentary Bankruptcy Case Evaluation

 

A ready legal resource is just a phone call away if you would like to explore the debt relief avenues that may be available to you. We have locations in many metropolitan areas in Oregon, including Albany, Medford, and Eugene, and we also have offices that serve the Tri-Cities and Vancouver in Washington. To schedule an appointment, send us a message through the contact page on this website.

 

What Are Bankruptcy Exemptions?

Our firm has bankruptcy law offices in many different cities throughout the state of Oregon, including Medford, Grants Pass, Coos Bay, Bend, and Portland. If you are filing for a Chapter 7 bankruptcy in the state of Oregon, you are required to surrender certain types of property to a bankruptcy trustee so it can be liquidated. However, in many cases, there is no property that can be liquidated, because many forms of property are exempt for bankruptcy purposes.

 

In Oregon, you have the option of using the federal exemption, or the state exemption. However, you cannot flit from one to the other depending on the piece of property that is in question. The most significant exemption involves your home or any real property that is eligible for a homestead exemption. Call us today do discuss which exemption law would best apply to your situation.

 

Personal property is exempt with rather modest limits. For example, as much as $1800 worth of clothing, jewelry, and other apparel items would be exempt. If you have a piano, some artwork, and/or a book collection, the exemption is $600. Furniture and other assorted household items are exempt with a limit of $3000. A single firearm would be completely exempt if it is not worth more than $1000.

 

Additionally, Social Security payouts, individual retirement accounts, and pensions are included under the exemption umbrella. Any money that you may have in a health savings account would be untouchable, and alimony payments and the tools of your trade would be exempt as well. In addition to the exemptions that we have itemized here, there are a number of others.

 

Now is the time for action if you have been thinking about filing for bankruptcy. As you can see, you are not necessarily forced to give up everything that is important you in return for a fresh financial start. If you would like to discuss your situation with a licensed bankruptcy attorney, call us at 1-800-682-9568 to set up a free, no obligation case evaluation.

 

 

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.

 

 

Bankruptcy in Washington State

We practice law in the state of Washington with offices in Vancouver and Kennewick. Bankruptcy proceedings are typically covered by federal laws, but there are certain state-by-state peculiarities. Let’s take a look at some of the steps that you would take if you are going to be filing for bankruptcy in Washington state.

 

Credit and Debtor Education Counseling

 

The government wants to make sure that you have a firm grasp on exactly what you are getting into when you file for bankruptcy. To this end, you are required to complete a pre-bankruptcy credit counseling course. These courses are offered by a number of different sources that are approved to provide courses for Washington residents. Plus, you can complete the course online, so they try to make it as convenient as possible. You can see a list of the approved credit counseling agencies on the United States Department of Justice website. To adhere to the guidelines, you have to complete this course within 180 days of your bankruptcy filing.

 

There is another form of testing required when you file for bankruptcy in Washington. The ultimate objective is to have certain debts discharged, which means they are essentially wiped away. After the bankruptcy has been filed, you have to complete a debtor education course, and if you fail to do so, your debts will not be discharged. You can access the list of approved course providers here.

 

Document Completion and Filing

 

As you might imagine, you have to complete and submit bankruptcy forms that are specific to the state of Washington. Your assets, your debts, and your income will be recorded on the forms, but you have to be aware of the fact that some of your property is exempt for bankruptcy purposes. The exact nature of the exemptions and will vary from state to state, and a Washington bankruptcy attorney can help you navigate these complicated waters.

 

There is also a means test applied when you file for bankruptcy in Washington. To qualify for a Chapter 7, you must be able to prove that you can’t afford to keep up with a repayment plan that could be part of a Chapter 13 filing. You automatically pass the test if your income is less than the median income in the state of Washington at the time of the filing. According to the Washington State Department of Social and Health Services, as of the end of the 2016 calendar year, the median income for a single individual was $3797 per month, which factors out to $45,564.

 

Give Us a Call Right Now!

 

Now that you have a bit of basic information, you may want to take the next step toward debt relief. If you would like to schedule a no-obligation case evaluation with a licensed Vancouver or Kennewick, Washington bankruptcy attorney, give us a call at 1-800-682-9568

Chapter 7 Bankruptcy and Social Security Benefits

Before we get into the matter of Social Security benefits, we should provide some context about Chapter 7 bankruptcy and the intricacies that go along with it. This is a liquidation form of bankruptcy, and depending on the circumstances, it can eliminate some or all of the debts that are making like difficult for you.

 

To qualify for this form of bankruptcy, you must be able to pass the means test that is in place to determine whether you have enough disposable income to make an effort to pay back your debts over time. A formula is used to make this determination if your income is more than the median income in your state. Getting back to Social Security benefits, your monthly direct deposit would not be counted when this means test is being conducted.

 

As we mentioned previously, this is a liquidation bankruptcy, and this means that property that is not exempt or secured would be turned over to a bankruptcy trustee. Under state laws, the trustee would liquidate the property and use the proceeds to pay back creditors. The good news is that many different types of property are exempt, including your Social Security benefits. For your information, here are some of the other types of property that are exempt when you are filing for a Chapter 7 bankruptcy:

 

  • Alimony
  • $47,000 of Home Equity for joint filers
  • $3775 of Motor Vehicle Equity
  • Retirement Accounts and Pensions
  • Veterans Benefits
  • Some Personal Property

 

You are going to be required to submit a great deal of paperwork when you file for Chapter 7, including a detailed accounting of your assets. While it is true that your Social Security benefits are exempt, you have to be sure that it is clear that benefits that may have accumulated in a bank account are in fact coming from Social Security. If you co-mingle your funds in one account, it can be hard to prove that a portion of the account should be exempt because it came from your Social Security benefits.

 

Contact OlsenDaines Today!

 

If you have questions about bankruptcy, we can provide answers, and we can guide you toward the optimal course of action given your unique set of circumstances. We offer free bankruptcy consultations to people in Tigard, Salem, Klamath Falls, Roseburg, and numerous other communities throughout the state of Oregon. If you would like to set up an appointment, simply send us a brief message through our contact page and we will get back in touch with you soon as we can.

 

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.