Which Type of Bankruptcy Should I Choose?

Our law firm offers bankruptcy assistance for clients in a number of cities in Oregon and Washington, including Salem, Portland, Grants Pass, Bend, Vancouver, and TriCities. When you decide to file for bankruptcy in one of these states, you have multiple options, and the circumstances will dictate the ideal course of action. For most individuals, it will be a choice between a Chapter 7 bankruptcy and a Chapter 13 bankruptcy.

Chapter 7 is a “liquidation” bankruptcy, and you receive an automatic stay when you file. This temporarily prohibits creditors from trying to collect on debts that are outstanding. When you successfully file this type of bankruptcy, your unsecured debts like credit card balances and medical bills are completely eliminated. If you are a homeowner and you are current on your mortgage payments, as long as you do not have a great deal of equity, you can file for Chapter 7 and retain ownership of your property. You can also keep your car if you are not behind on the payments and you have limited equity in the vehicle.

In order to qualify for a Chapter 7 bankruptcy, you have to be able to pass a means test. Though there are exceptions, if your income exceeds the median income in the state of your residence, you cannot qualify for a Chapter 7 liquidation. Under these circumstances, if your debt is unmanageable, you may want to opt for a Chapter 13 reorganization.

When you file for chapter 13, you are allowed to keep all of your property, and you use your disposable income to make monthly payments that you can afford. Also, if you are not current on your home or car payments, you can make up these payments over time through the chapter 13 and retain ownership of your home or car. A chapter 7 will only temporarily delay a creditor from foreclosing or repossession if you are not current.

In addition to these two forms of bankruptcy, there is Chapter 11, which is a reorganization plan for businesses and individuals who have very high levels of debt. Chapter 12 is a reorganization bankruptcy that is available to certain family farmers and fishermen.

If you are a resident of Portland, Grants Pass, Salem, Vancouver or TriCities, we will be more than glad to provide you with a free bankruptcy case evaluation. These sessions are very relaxed, and we make every effort to make our clients completely comfortable every step of the way. You can simply click this link to take the first step, and the professionals here at OlsenDaines will take care of the rest.

Say Goodbye to FDCPA

Supreme Court Justice Neil Gorsuch issued his first opinion this week.  We learned a lot from this opinion.  Unfortunately, the most important thing we learned was that he can come to any conclusion he wants – that makes him a perfect fit for the Supreme Court.  This opinion is being heralded as well written and Gorsuch is praised for his “Melodic Phrasing”  (ABC) and his “Writing Flair” (FOX).  What was lost in all the praise was the simple fact that with one opinion, Justice Gorsuch eliminated the whole of the FDCPA (Fair Debt Collection Practices Act – 15 USC 1692).

The primary requirement when a judge is interpreting a law is to give the law some meaning.   What the Court ruled was that to avoid the FDCPA completely, all a debt collector has to do is buy the debt instead of collect the debt for another.  Nothing in the opinion states that a collector can not have a sell back provision and sell a debt back to the original lender if the collector is unable to collect.

Bottom line:  A lender and a debt collector can now write their agreement in such a way as to completely avoid the FDCPA.  Justice Gorsuch has now given the FDCPA no meaning.  For the 50% of adults in America who have debts:  You just lost your right to not be harassed.

Does Bankruptcy Discharge Alimony Responsibilities?

A bankruptcy filing can provide debt relief, but it is not a magic wand that makes every type of debt disappear forever. Certain types of debts are looked upon as priority debts that cannot be discharged via a bankruptcy filing. If you are required to pay your spouse alimony or child support, this would be a priority debt, and it could not be discharged. You would still be required to make your alimony payments. However, the bankruptcy filing could help if you are finding it difficult to keep your alimony obligation current.

To explain by way of example, let’s say that you are divorced, and you are required to make alimony payments. Over a period of time, you have accumulated a number of credit cards, and the payments are more and more difficult to make. You are also making payments on some large medical bills. These expenses eat up a large chunk of your disposable income, so it is hard for you to keep your other responsibilities current.

Under these circumstances, if your income is less than the median income in your state, you could choose to file for a Chapter 7 bankruptcy. We should point out the fact that it is possible to qualify even if your income is more than the median if you have very little disposable income left after you pay for the basic necessities of life. You get an automatic stay when you file for this type of bankruptcy, so most creditors have to suspend their collection efforts. However, this does not extend to alimony payments.

Your nonexempt property would be liquidated by the trustee to pay back unpaid debts under a Chapter 7, but most people who file have little to no property that is not exempt. Going back to our example, if you don’t have much property that can be liquidated, the credit card debt and medical expenses would be discharged permanently after the bankruptcy became final. Since you would not have to pay these debts anymore, it would be much easier to make your alimony payments on time.

Schedule a Free Consultation

If you reside in Tacoma, Vancouver, or tri-cities Washington, we have an office near you, and we also have locations throughout the state of Oregon. We offer free bankruptcy case evaluations, and we would be glad to gain an understanding of your situation and make the appropriate recommendations. To schedule an appointment, give us a call at 1-800-682-9568.

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.

 

Small Business Bankruptcy FAQs

If you are involved in the operation of a small business and things are not going very well financially, you may have questions about the potential benefits of bankruptcy. We provide this type of assistance to people in Tacoma, Tri-Cities, and Vancouver, Washington. Our firm also has offices in many different locations throughout the state of Oregon, including Portland, Eugene, and Medford. We have successfully counseled countless small business people over the years, and we are often asked many of the same questions. In this blog post, we will take a look at a few of them so that you have a basic foundation of information to draw from going forward.

Am I personally responsible for debts that have been incurred by my business?

The answer to this question depends upon the business structure that you are utilizing. If you are the sole proprietor of your business, you would in fact be held personally liable for the business debts. The same thing is true if you are a general partner in a partnership. On the other hand, if your business is a limited liability company, a corporation, or a limited partnership, generally speaking, you would not be personally responsible.

What types of bankruptcies are available to small business people?

There are three types of bankruptcies that are often used: Chapter 7, Chapter 13, and Chapter 11. Chapter 12 bankruptcy is also a possibility, but it is only available to family fishing businesses and family farmers.

What kind of bankruptcy should I file if I want to shut down my small business?

In many cases, a Chapter 7 will be the most efficient and effective choice under these circumstances. This is a liquidation bankruptcy that is available to limited liability companies, corporations, and partnerships. If your business qualifies and you file for a Chapter 7 bankruptcy, the bankruptcy trustee would liquidate the business property to pay back as much as possible, and the business would not be responsible for any debt that may remain.

You can also use a Chapter 7 bankruptcy if you are a sole proprietor, but it would be personal bankruptcy that encompasses your business debts.

Schedule a Small Business Bankruptcy Consultation

Now that you understand a few of the basics, you may be ready to take the next step. If you would like to schedule a free case evaluation, give us a call at 1-800-682-9568.

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.

Do I Need a Lawyer to File for Bankruptcy?

Many people like to engage in do-it-yourself projects, and they have different motivations. Some individuals genuinely enjoy certain types of DIY challenges, and there are others who decide to go it alone because they want to save some money. There is nothing wrong with doing some things for yourself, and the information that can be easily obtained on the Internet makes it easier than it has ever been. However, you do have to know where the draw the line. You may feel confident replacing the alternator on your car, but do you think that you have the know-how to file for bankruptcy for yourself?

Technically speaking, you don’t have to have a license to practice law to file for bankruptcy. However, these are some rather complicated waters to try to navigate on your own as a layperson. First of all, do you know what type of bankruptcy to choose? You may hear about the fact that a Chapter 7 can make your credit card debts and medical bills disappear. This can be true, but are you sure you qualify for a Chapter 7? You have to pass a means test to qualify for this type of bankruptcy. If your income exceeds the median income in your state of residence, you won’t automatically qualify. A complex formula would be utilized to determine whether you are eligible to file a Chapter 7.

A Chapter 13 bankruptcy could be the right choice for you if you do not qualify for a Chapter 7. It can also be a better option if certain circumstances exist. For example, you cannot stop a foreclosure if you are behind on your mortgage through a Chapter 7 filing, but a Chapter 13 could allow you to repay the arrearage over time. When a Chapter 13 bankruptcy is filed, a complicated repayment plan is submitted to the court. This form of bankruptcy is so complex that there are some bankruptcy attorneys that do not handle them, so it is very unlikely that you could effectively file a Chapter 13 bankruptcy by yourself without any legal guidance.

We understand the fact that people who are experiencing financial difficulties are not particularly anxious to put out money to engage a bankruptcy lawyer. This is why we have established a very affordable fee structure, and our clients find that the value that we provide is extraordinary. Our firm offers free consultations to people in Portland, Eugene, Grants Pass, Bend, Tigard, and a few other Oregon cities, and we have locations in the state of Washington as well. If you would like to set up an appointment, send us a quick message through our contact page.

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.