Is There a Chapter 13 Bankruptcy Debt Limit?

Chapter 13 is a reorganization bankruptcy. With this form of bankruptcy, you get an automatic stay as soon as you file. This shields you from most collection efforts while the bankruptcy is in progress, so you get some immediate relief. You create a repayment plan that will span for three years or five years when you are going through this type of bankruptcy.

The court allows you to maintain possession of enough resources to satisfy your basic necessities, and income that is looked upon as disposable income will be earmarked to pay your debts over the course of the repayment plan. Certain debts are considered to be priority debts, and they are placed ahead of non-priority debts like medical expenses and credit card debt. If there is not enough disposable income to pay these non-priority debts, they can be discharged in a Chapter 13 bankruptcy. This type of bankruptcy will stay on your credit report for seven years, but that does not mean that you cannot obtain new lines of credit sooner.

Most individuals will qualify for a Chapter 13 bankruptcy filing. However, if you have an extraordinarily high level of debt, you may not be eligible because there are debt limits. We use the word “limits” in the plural because there are different parameters for secured debt and unsecured debt. The limit for secured debt (like real estate and motor vehicles) is $1,184,200. For unsecured debt, the Chapter 13 debt limit is $394,725.  If your debt exceeds these limits, you still have recourse. You could choose to file for a Chapter 11 bankruptcy, which is another type of reorganization that is usually utilized by businesses.

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We serve people in Vancouver and the Tri-Cities area in Washington, and we also have offices in Portland, Eugene, and many other cities in the state of Oregon. If you are interested in a bankruptcy filing, our doors are open, and we offer complementary, no obligation initial consultations. You can request an appointment right now through this website if you click this link and fill in the form that you see: free bankruptcy case evaluation.

What Does a Chapter 13 Filing Entail?

When you start to think about a bankruptcy filing, you should understand the fact that there are different types of bankruptcies, and you will not necessarily qualify for all of them. Chapter 12 is a type of bankruptcy that is available to some family farmers and fishing businesses. Chapter 11 is a reorganization plan that is typically utilized by businesses. The vast majority of individuals who are looking for debt relief will choose either a Chapter 7 bankruptcy or a Chapter 13.

If your income is greater than the median income in the state of your residence, you may not be able to qualify for a Chapter 7. You will be required to submit financial disclosure forms, and you will be deemed ineligible for a Chapter 7 filing if the court determines that you have enough disposable income to pay back a some portion of your debt over time.

Under these circumstances, you would be able to file for a Chapter 13 bankruptcy as long as the amount of your secured debt does not exceed $1,184,200, and your unsecured debt is less than $394,725. (These limits will be adjusted for inflation in April 2019.) This is a reorganization bankruptcy, so the idea is to restructure your debt with a payment plan that will typically last 5 years.

As soon as you file for Chapter 13, you will get an automatic stay. This will put a stop to all collection efforts while the process is underway. You do not have to surrender any property when you file for this type of bankruptcy. Priority debts that must be paid first include child support, spousal support, taxes and some other debt. If you are behind on secured debts, like your mortgage or your car payment, the money that you owe can be paid back over time as part of the repayment plan.

Schedule a Free Bankruptcy Consultation Right Now!

If you reside in Vancouver or the Tri-Cities area in Washington, we have an office near you, and we also have numerous offices spread throughout the great state of Oregon. We offer free initial case evaluations, and you can set up an appointment with a licensed bankruptcy attorney right now if you reach out to us toll-free at 800-682-9568.

Can a Noncitizen File for Bankruptcy?

Before we address the question that serves as the title of this blog post, we should explain some of the basic reasons why bankruptcy could provide a solution if you are struggling financially. If you qualify for a Chapter 7 filing, your unsecured debt can be completely discharged. Unsecured debts include credit card balances, unpaid medical bills, and a number of other types of debts. When you rid yourself of these obligations, other debts that you may have, like your home mortgage or student loan, will be easier to pay.

People who cannot qualify for a Chapter 7 bankruptcy can choose a Chapter 13. This is a reorganization bankruptcy that allows you to pay back a portion of your debts over a three-year or five-year period. Once again, some unsecured debts may be discharged so that you can afford to pay your non-dischargeable debts through the repayment plan.

Now that we have set the stage, we can get to the point of this post. There are many people who reside in this country, but they are not citizens. Under federal laws, you can in fact file for bankruptcy if you maintain a domicile on American soil or have U.S.-based assets such as a home, a business, or any other property in the United States, even if you are not a citizen of this country. This is good news for noncitizens who are interested in bankruptcy to provide a fresh financial start.

Bankruptcy will typically not make it any more difficult to become a citizen, but in some cases, a bankruptcy filing could make it more difficult to obtain citizenship so if this is a concern to you, you should seek the advice of an experienced immigration lawyer before filing a bankruptcy.

Our firm will be glad to assist you if you would like to discuss a potential bankruptcy filing with us whether you are a citizen or a noncitizen who is living in the United States. We serve clients in Vancouver and Tri-Cities in Washington, and we have many locations throughout Oregon. To schedule a complimentary consultation, call us toll-free at 800-682-9568.

Can You Get a Mortgage After Bankruptcy?

Many people are under the assumption that you are essentially ruined after you file for bankruptcy for at least 7 to 10 years. In fact, this is a misconception. It is true that a Chapter 7 bankruptcy will remain on your credit report for 10 years, and a Chapter 13 will stay on the report for seven years. However, the existence of a bankruptcy on your credit report will not necessarily preclude you from obtaining credit, and this will include a home mortgage.

The exact period of time that you have to wait to be able to obtain a mortgage after bankruptcy depends on the type of loan. FHA loans are very popular because they are guaranteed by the government and the minimum down payment is small. You will typically have to wait three years after a Chapter 7 discharge to obtain this type of mortgage. With a Chapter 13, after you have kept your repayment plan current for 12 months, you could potentially qualify for an FHA home loan.

Many veterans can qualify for a VA mortgage. This type of home loan is similar to the FHA loan with regard to the government guarantee that eliminates the need for mortgage insurance, and qualified veterans can get a VA mortgage with nothing down. The minimum waiting period for eligibility after bankruptcy is two years.

For conventional loans, you can become eligible three years after the discharge in a Chapter 7. Many people can qualify for a conventional mortgage shortly after a Chapter 13 has been successfully completed.

Since the requirements for mortgage qualification changes frequently, you should contact an experienced mortgage broker to discuss recent changes to the timelines noted above.

We Are Here to Help!

If you are in Portland, Eugene, Coos Bay, Medford, or any other city in the state of Oregon we have a bankruptcy law office near you and we provide free initial case evaluations. To schedule an appointment send us a quick message through our contact page and we will be back in touch with you shortly.

Can a Bankruptcy Wipe Out Income Tax Debt?

People sometimes assume that a bankruptcy filing is a panacea that will wipe out all debts permanently, including tax debts. In fact, this is not the case. The details will depend upon the form of bankruptcy that is filed and the type of tax payment that is delinquent.

Chapter 7

A Chapter 7 bankruptcy can potentially result in a discharge of income tax debt if certain conditions are met. There are many rules, but the 3 primary rules are: 1) the tax year must be more than 3 years old at the time of the bankruptcy filing, 2) actual filing of the return has to have taken place in a timely manner, and the internal IRS or state assessment has to have been entered at least 240 days before the bankruptcy filing. If all of these conditions are met, the tax debts can usually be discharged.

Chapter 13

In a chapter 13 reorganization bankruptcy priority debts will be paid first. An income tax delinquency will be a priority debt, so your repayment plan can be structured to pay the taxes back over time and avoid any tax garnishments. The other benefit is that we can usually eliminate all future interest and penalties while paying the taxes back through a chapter 13.

Schedule a Case Evaluation

Our firm serves people in many different cities throughout the states of Oregon and Washington. If you are in Tri-Cities, Vancouver, Eugene, Salem, Portland, Bend, Medford or any other community in the Oregon our southern Washington, we are just a phone call away. We offer free, no obligation bankruptcy case evaluations, and you can set up an appointment right now if you give us a call at 1-800-682-9568.

Are There Different Types of Bankruptcy?

If you sit down and discuss your options with an attorney, you may be surprised to hear that there are multiple different types of bankruptcies. An individual will probably be best served by a Chapter 7 bankruptcy or a Chapter 13 bankruptcy.

With a Chapter 7 bankruptcy, an automatic stay is imposed, so all collection efforts will immediately come to a halt. You can maintain possession of your car and your home if you are up to date on your payments and you don’t have a lot of equity. Property that is not exempt must be turned over to a trustee so it can be liquidated. The proceeds will be used to pay the delinquent debts. However, most people who file for this type of bankruptcy have little or no non-exempt property to surrender.

Unsecured debt will be discharged, so you will no longer have to be concerned about collection calls from credit card companies or collection agencies. A Chapter 7 bankruptcy will stay on your credit report for 10 years; that’s the bad news. The good news is that you still may be able to obtain debt after you file if you need to, but you will typically be required to pay higher rates of interest.

Chapter 13 is a reorganization bankruptcy. If you have enough disposable income to make payments on your debts, you will not qualify for Chapter 7, but you can still file for Chapter 13. Under this form of bankruptcy, you will get the same automatic stay. You will be able to maintain possession of your property if you can keep your payments current, and a three to five-year debt repayment plan will be submitted to the court. This plan can include past due mortgage or car payments, so a Chapter 13 can help you avoid a foreclosure or repossession if you have fallen behind. A Chapter 7 does not allow for a repayment plan to correct mortgage arrearage over a period of years.

A Chapter 11 bankruptcy is a reorganization bankruptcy that is used by business entities, but some individuals with very high levels of debt may qualify for this type of bankruptcy. Chapter 12 is a special form of reorganization that is available to some family fishing businesses and family farmers.

We have provided a brief overview in this blog post, but we will be more than glad to answer all of your questions in detail. Our firm offers free consultations to clients in Portland, Medford, Grants Pass, Roseburg, and a number of other cities in Oregon and Washington. If you will like to set up an appointment, fill out the request form on this website and we will contact you ASAP.

Answers to Three FAQs about Bankruptcy in Oregon

We have been providing bankruptcy assistance in the state of Oregon for over 40 years, and we now have offices Portland, Eugene, Medford, Grants Pass, Coos Bay, Roseburg, Salem, Bend and a handful of additional cities. If you are considering the possibility of a bankruptcy filing in the state, you are going to have questions, and we can provide you with answers if you visit us in person. In the meantime, let’s look at the answers to three frequently asked questions about bankruptcy in Oregon so you can proceed with an underpinning of basic knowledge.

What are the different types of bankruptcy that are filed by individuals?

Chapter 7 and Chapter 13 are the forms of bankruptcy that are most commonly utilized. Chapter 11 is a type of bankruptcy that is used by businesses and a very limited percentage of individuals who have enormous levels of debt. Chapter 12 is a rarely used form of bankruptcy that is exclusively earmarked for family farmers and family fishermen.

How does a Chapter 7 differ from a Chapter 13 bankruptcy?

A Chapter 7 is a liquidation bankruptcy, so unsecured debts like medical bills and credit card balances are discharged. Plus, you can usually retain ownership of your car and your home if you are current on your payments. To be able to qualify for this type of bankruptcy, you have to be able to pass a means test. If your income is less than the median income in the state of your residence, you automatically qualify. It is possible to qualify even if your income does exceed the median if certain circumstances exist.

People who cannot qualify for Chapter 7 because they have too much income can file for a Chapter 13 reorganization. If you were to do this, you can keep all of your property, and your debt will be restructured. You will be required to use your disposable income to pay down the debt over a period of 3 to 5 years.

How long will a bankruptcy stay on my credit report?

It depends on the type of bankruptcy you file. Credit reporting agencies will erase a Chapter 13 bankruptcy after seven years. If you file for Chapter 7, the bankruptcy will remain on your credit report for 10 years.

Set Up a Free Bankruptcy Consultation

If you will like to take action after absorbing this basic information, we will be more than glad to assist you. We provide free initial case evaluations, so you can get to know us and learn more about the benefits of bankruptcy before you make any final decisions. To set the wheels in motion, send us a message through our contact page and we will get back in touch with you promptly.

Feeling at Ease With Your Bankruptcy Attorney

Money matters are sensitive and personal, and there are not too many people that are anxious to discuss their financial affairs with someone they have just met for the first time. This is certainly a prudent way to conduct yourself, but the “close to the vest” approach can have a downside if you are having financial difficulties. A bankruptcy attorney can guide you toward an effective debt management solution, but you may feel a bit uncomfortable asking for help.

This is understandable and it is human nature, but you don’t have to be concerned. Our bankruptcy law firm has been assisting people for more than three decades, and we have worked with tens of thousands of clients in Oregon and Washington. Given our vast experience, there is no scenario that we haven’t seen before, and we always go the extra mile to make our clients feel comfortable throughout the whole process.

We get to know our clients, we put them at ease, and we answer all of their questions in a thorough but down to earth and understandable manner. For some individuals, a Chapter 7 liquidation bankruptcy will be the best choice. With this form of bankruptcy, unsecured debts are discharged entirely, and you can usually maintain ownership of your home and your car if you are up-to-date on the payments. Other people will be better served by a Chapter 13 reorganization that allows a person to make payments over time until the debts are paid or discharged.

Our firm offers free case evaluations, so you have the opportunity to meet us and get to know your bankruptcy attorney before you make any firm commitments. This is a simple but effective way to break the ice, and we also make personal interactions quite convenient for people in many different parts of Oregon and Washington. We have offices in Portland, Eugene, Medford, Grants Pass, Coos Bay, Tigard, Bend, Klamath, Salem, Vancouver, and Tri-Cities, so you won’t have to travel very far to get sound legal counsel. If you will like to take the first step toward a comfortable financial future, send us a message through our contact page to request a consultation with a licensed OlsenDaines bankruptcy attorney.

Bankruptcy Is Not a Badge of Dishonor

There are certain trigger words that can have negative connotations in some circles, and bankruptcy is one of them. As attorneys who help people who are struggling with debt in Portland, Vancouver and other cities in Washington and Oregon, we definitely understand this dynamic, but it is misguided. Bankruptcy is a legal tool. If you are experiencing financial difficulties for any reason, the law allows for corrective actions so that you can get back on track financially.

At the same time, a very significant percentage of people who file for bankruptcy handled their finances perfectly well until they were confronted with unexpected health care bills or other expenses. A study that was conducted in 2016 by T.H. Chan School of Public Health at Harvard along with National Public Radio and The Robert Wood Johnson Foundation shed some interesting light on the subject. Over a quarter of the respondents stated that health care expenses that accumulated over the preceding two years yielded very negative financial consequences. Four out of ten received collection calls from health care providers, and 23 percent of the poll participants were forced to take on credit card debt that will be hard to manage. Seven percent of these individuals had to file for bankruptcy.

Regardless of the underlying circumstances, bankruptcy can give you a fresh start, and you are not necessarily being unfair to your creditors if you take this route. With a Chapter 13 bankruptcy, you simply reorganize your debt and make payments that you can afford. The court requires you to utilize all of your disposable income after you pay for the basic necessities of life to pay down your debt. Creditors really can’t ask for anything more than that. A Chapter 7 bankruptcy does wipe away unmanageable debt, but you can’t qualify for this type of bankruptcy if your income will allow you to pay back your creditors.

We understand the fact that we discuss very delicate financial matters when we consult with our bankruptcy clients in Portland, Eugene, TriCities, Vancouver, and the other cities that we serve. This area of the law is our passion because we sincerely enjoy helping people. There is no need to feel any sense of uneasiness or trepidation. If you will like to obtain more information about bankruptcy before you proceed further, you can learn a lot if you read through our frequently asked questions. When you are ready to move forward, you can send us a message through our contact page to request a complementary, no obligation case evaluation.

Which Type of Bankruptcy Should I Choose?

When bills pile up and creditors start calling, it’s natural to feel lost and unsure of what steps to take next. One option you might be considering is bankruptcy, which can help you regain financial stability by eliminating or restructuring your debt. But with several types of bankruptcy available, how do you know which one to pick? Here are the most common chapters of bankruptcy to help you determine which is best suited to your needs.

Chapter 7 Bankruptcy

Chapter 7 bankruptcy is intended to provide relief for individuals with limited assets and low income from their unsecured debts. In order to qualify for this chapter, you must be able to pass a means test, which generally means your income does not exceed the median income in your state of residence. Under Chapter 7 bankruptcy, you may be able to eliminate debts such as:

  • Medical bills
  • Overdue utilities
  • Outstanding credit card debt
  • Lease agreement deficiencies
  • Collection agency accounts

Even though this chapter can wipe away many kinds of debt, it doesn’t cover everything. Some types of debt may stick around even after filing for bankruptcy. For example, most people still need to pay secured debts, taxes, child support or student loans.

How Does Chapter 7 Bankruptcy Work?

Chapter 7 bankruptcy is commonly referred to as a liquidation bankruptcy because the courts will assign a trustee to sell any of your non-exempt assets. The proceeds from those sales will go toward paying off your creditors. Non-exempt assets can include items such as:

  • Valuable artwork
  • Jewelry or expensive clothing
  • Investments outside of retirement accounts
  • Valuable collections or musical instruments
  • Properties outside of your primary residence
  • Newer-model vehicles in which you have equity

It’s important to note that it is possible to retain your house and your vehicle when filing for this type of bankruptcy. Though it may be difficult to face liquidation, doing so could allow you to eliminate debts while retaining the assets that are most important to you and your family.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy is intended to provide debt relief for individuals with more assets or higher disposable income. This is a good option for anybody who has enough income to make reasonable payments toward debts even after basic living expenses are met. If you are unable to pass the means test required for Chapter 7, then this chapter may be right for you.

How Does Chapter 13 Bankruptcy Work?

Chapter 13 is often called a reorganization bankruptcy because it restructures debts to make them more manageable, rather than completely eliminating them. If you file for this chapter, you will create a payment plan proposal to repay your creditors. Unsecured debts, such as credit card balances or unpaid medical bills, may be partially forgiven to provide some relief.
However, certain debts need to be paid in full. These can include:

  • Alimony
  • Child support
  • Mortgage delinquencies
  • Motor vehicle payments
  • Taxes

With this type of bankruptcy, you can keep all of your property while paying down debts and reaching financial stability. Though the process can feel overwhelming, you don’t have to face it alone. The debt relief attorneys at OlsenDaines can help you each step of the way.

Chapter 11 and Chapter 12

While Chapter 7 and 13 are the most common types of bankruptcy, there are two other options that could be a better fit depending on your circumstances:

  • Chapter 11 is intended for businesses and individuals who do not qualify for another chapter. Similar to Chapter 13, this type of bankruptcy works by reorganizing your debts under a payment plan. However, the debtor will generally have a longer repayment period than those filing for Chapter 13.
  • Chapter 12 is specifically for farmers and family fishermen. It is a lot like Chapter 13, but is designed specifically for farm and fishing operations. Additionally, it gives debtors more opportunity to modify secured debts on property such as home mortgages and equipment loans.

Get Legal Assistance from a Bankruptcy Attorney

Considering bankruptcy, but still unsure of which chapter is right for you? That’s where we can help. At OlsenDaines, it’s our mission to educate, inform, and empower people about their legal options for dealing with debt. We have proudly served residents throughout Oregon for over 40 years with the goal of helping them reach financial stability and security. Whether you want to learn more about your bankruptcy options or you’re ready to start filing, we’re here to make every step easier. Give us a call today to schedule your free legal consultation!