Avoid Post-Bankruptcy Mistakes

If you are being overwhelmed by ever-spiraling debt, bankruptcy can provide a solution, and the benefits are realized immediately. You get an automatic stay when you file for bankruptcy, and this makes most debt collection efforts come to a halt. The two different types of bankruptcies that most people (who are not in business) use are Chapter 7 and Chapter 13. Under a Chapter 7, unsecured debts like credit card balances and medical bills can be completely discharged. Plus, if you are current on your payments and you don’t have more than $40,000 in equity, you can maintain ownership of your home. The same thing is true for your car with an equity limit of $3000.

With a Chapter 13 bankruptcy, your debts are reorganized, and you make monthly payments over a three-year or five-year period. The court determines how much of your income is “disposable,” and these funds are utilized to make the payments. There are priority debts, and non-priority unsecured debts. If there’s not enough money to make payments on all of the debts, all or some of your unsecured debts may be discharged under Chapter 13.

Before you can get a discharge with either type of bankruptcy, you have to complete an accredited debtor education course. You can see a list of the approved providers if you visit the United States Department of Justice website. The information that you will receive should help you make good choices going forward so that you can avoid post-bankruptcy mistakes and steer clear of future financial problems.

Everyone makes errors, but the key is to learn from them. If you had to file for bankruptcy because you made poor financial decisions, you should certainly go forward with a new perspective once you are given a fresh start. You may be surprised to find out that you can obtain credit cards, a car loan, and even a mortgage after you file for bankruptcy if you act wisely and consistently meet all of your financial responsibilities.

Take Control of Your Financial Future!

A bankruptcy filing can ease the pressure in the present and help you regain control of your financial future. If you are in Portland, Eugene, or Medford, Oregon, we have a bankruptcy law office nearby, and we would be more than glad to provide you with a free consultation. To set up an appointment, call our office toll-free at 800-682-9568.

Filing for Bankruptcy in Oregon

We have bankruptcy law offices in many different cities throughout the state of Oregon, including Portland, Medford, Eugene, Salem, Tigard, Klamath Falls, Coos Bay, Bend and several others. There are federal bankruptcy statutes, but there are also state specific laws that effect bankruptcy. In this post, we will provide an overview regarding some of the specific details that come into play when you file for bankruptcy in Oregon.

First, you have to understand what type of bankruptcy you are going to file. Most individuals will choose between either a Chapter 7 bankruptcy or a Chapter 13. You have to make an honest effort to pay back as much of your debts as you can if you have sufficient disposable income, so there is a means test that you must pass to qualify for Chapter 7, which is a liquidation bankruptcy. You automatically pass this test if your income is less than the median income in the state of Oregon. According to the United States Census Bureau, the median income in our state for a single person is $50,333 per year.  For a household of 4, the median income is $80.170.   You can potentially qualify for Chapter 7 even if your income exceeds this amount if it is determined that you don’t have enough disposable income to devote to a repayment plan.

Before you are allowed to enter into the bankruptcy process, you are required to take a credit counseling course. You also have to take a debtor education course before your debts can be discharged. This requirement can seem like a huge hassle, but it does not take long and it allows an independent party to review your finances before you file the case.  Most people take these courses online and some people do them over the phone. You can click these links to see a list of the approved providers of these tests for residents of Oregon: credit counseling and debtor education.

Simplify the Process!

The best way to file for bankruptcy in Oregon is to sit down and discuss all of your options with a licensed bankruptcy lawyer. One you determine which bankruptcy is right for you, your attorney can guide you through the process each and every step of the way.  Legal assistance is invaluable because it can be complicated to navigate these waters on your own. If you would like to speak with us about your debt, we would be more than glad to assist you. Our firm offers free consultations, and you can request an appointment if you send us a message through our contact page.

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.

Q & A Session With a Bankruptcy Attorney

 

As bankruptcy attorneys, we are asked many of the same questions by our clients. In this blog post, we will present a hypothetical example of a typical question and answer session with a bankruptcy lawyer so that you can come away with a basic foundation of useful information.

Will collection calls stop if I file for bankruptcy?

The answer to this question is a resounding yes. When you file for bankruptcy, you get an automatic stay. This prevents most creditors from making any attempts to collect debts while the bankruptcy process is unfolding. It goes into effect immediately. Additionally, if you have legal representation, collection agencies are not allowed to call you. They are required to contact only your attorney.

Does a bankruptcy filing prevent a foreclosure?

Yes, bankruptcy can prevent a foreclosure. If you are behind on your mortgage payments, you can pay back the arrearage over time through a repayment plan in a Chapter 13 filing. In Chapter 7, up to $50,000 in equity in your Oregon home is exempt, so you can maintain ownership of your home as long as you are current on your payments if you have less than $50,000 equity ($50,000 for a married couple, $40,000 for an individual).

What is the difference between Chapter 13 and Chapter 7?

We will provide a short answer here. Chapter 13 is a reorganization bankruptcy. You are allowed to keep your property, and your debts are reorganized so that you can make affordable payments over a three-year or five-year period. Many debts are eliminated in a chapter 13 just like a chapter 7. Chapter 7 is a liquidation bankruptcy. Nonexempt property (if there is any) will be liquidated by the bankruptcy trustee to pay back as much of your debt as possible. Unsecured debts like credit card bills, old utility balances, medical charges, and unpaid lease obligations would be discharged completely.

How long will a bankruptcy filing remain on my credit report?

It depends on the type of bankruptcy that you file. A Chapter 7 bankruptcy will remain on your credit report for 10 years, and a Chapter 13 will last for seven years. The time period starts the day we file the case with the bankruptcy court.

Take the First Step Toward a Fresh Financial Start!

Now that you know some of the basics, you may be ready to move forward and have a detailed discussion with a licensed bankruptcy attorney. We have offices in Tigard, Salem, Klamath Falls, Albany, Grants Pass, Bend and several other cities in Oregon, and we also have locations in Vancouver and Tri-Cities in Washington. If you would like to schedule a free consultation, give us a call at 800-682-9568.

How Will a Bankruptcy Filing Impact My Credit?

Clearly, a bankruptcy filing is going to have a significant impact on your credit, and the exact details will vary depending upon many different factors. When it comes to your FICO score, if your score was low prior to your bankruptcy filing, the reduction will be minimal. Some people end up with better credit scores immediately after the bankruptcy. If you had a good credit rating before your bankruptcy, the score is going to plummet significantly. While your credit score is definitely going to go down if you file, there can be a silver lining. If you do nothing, your credit score will continually cascade downward month after month. On the other hand, if you take the bull by the horns and file a bankruptcy, you can begin to rebuild your credit sooner rather than later.

Chapter 7 bankruptcy is a liquidation bankruptcy, and it will wipe out all of your unsecured credit card debt. Chapter 13 is a form of bankruptcy that is called a reorganization. You continue to pay your bills with your disposable income when you file for a Chapter 13, but the debts are restructured to be more manageable. Depending on how soon after filing a bankruptcy you need good credit, a chapter 7 and chapter 13 will have different result. The type of bankruptcy that you file for also has an impact on the length of time that it will remain on your credit report. According to Experian.com, a Chapter 13 will be deleted seven years after the filing, and the duration is 10 years for Chapter 7 bankruptcy.

Many people think that they will not be able to get any type of credit for years after a bankruptcy filing, but this is not the case. Depending on the circumstances, you may be able to get credit cards and car loans shortly after your bankruptcy is finalized. However, you will wind up paying inflated rates of interest, and there will typically be significant annual fees and high interest rates on the credit cards. If you have no bad debt after the bankruptcy you will be able to qualify for a good mortgage in as little as 2 or 3 years.

Yes, a bankruptcy is going to have an impact on your credit, but it is not as severe as many individuals are led to believe. We offer no obligation, free case evaluations to people in Medford, Coos Bay, Klamath Falls, and a number of other communities in Oregon and Washington. If you will like to set up an appointment, send us a message through our contact page and we will get back to you in short order.

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.

What Is a Reorganization Bankruptcy?

If you are trying to gain a basic understanding of the ins and outs of bankruptcy, you will invariably come across some terms that you may not fully understand in the context within which they are being used. With this in mind, this blog post will provide a basic explanation of the term “reorganization” as it applies to bankruptcy.

Chapter 13 Bankruptcy

Some people are under the impression that your debts are simply wiped away when you file for bankruptcy. In fact, this is not necessarily the case. It all depends on the type of bankruptcy that you file coupled with unique circumstances surrounding your case. There is a type of bankruptcy called a Chapter 7, and unsecured debt like credit card balances and unpaid medical bills can be completely discharged if you file this type of bankruptcy. However, you cannot qualify for a Chapter 7 if you have enough disposable income to make reasonable payments toward your unpaid debts after your basic living expenses are met. Under these circumstances, you would have to file a Chapter 13 bankruptcy.

A Chapter 13 bankruptcy is a reorganization bankruptcy. Your debts are reorganized, and you make payments over a three-year or five-year period. You don’t lose any of your property, and if you are behind on your mortgage or your vehicle payments, you can pay back the arrearage through the payment plan. High priority debts must be paid in full, and these would things like child support, spousal support, and some income tax debt. Secured claims such as your home mortgage arrearage would also be paid in full through the terms of the reorganization plan.

However, you may wind up paying a fraction of low priority unsecured debts like credit cards balances and medical bills. In fact, you may not pay any of this debt at all if your disposable income cannot stretch that far. At the conclusion of the term, the unsecured debts would be discharged, and the creditors would not be able to seek repayment from you going forward.

Chapter 11 Bankruptcy

A Chapter 11 is another type of reorganization bankruptcy. This form of bankruptcy is primarily utilized by business entities like corporations and partnerships. However, there is a debt limit for individuals who would like to file for Chapter 13. Some of these people can opt for a Chapter 11 reorganization.

If you would like to learn more about reorganization, we would be glad to assist you. Our firm offers free case evaluations to people in Medford, Klamath Falls, Portland, and other metropolitan areas in Oregon and the state of Washington. To set the wheels in motion, send us a brief message through our contact page.

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.