People in Oregon sometimes make costly bankruptcy mistakes that they could avoid with an attorney’s advice and a better understanding of the bankruptcy process. Common issues, such as failing to take advantage of exemptions or waiting until after foreclosure to file for bankruptcy, might be expensive errors in retrospect. Other errors, such as allowing creditors to pester you during the automatic stay, can be handled by your attorney if you notify them of the problem. Moreover, some mistakes stem from misunderstandings or miscommunications about the bankruptcy laws.
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Failing to Take Advantage of Exemptions
You’re probably wondering what exemptions have to do with filing for bankruptcy. Many people enter the bankruptcy process worried about their possessions. What will happen to their house, car, cash, retirement accounts, and even tax refunds? The federal bankruptcy laws and the Oregon state laws allow many bankruptcy filers to keep some or all of their personal property through exemption provisions. If you fail to take advantage of exemptions, you could lose property as it is foreclosed on or repossessed by creditors.
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Waiting Until After Foreclosure, Eviction, or Repossession to File
Some people think they need to wait until they hit rock bottom to file for bankruptcy. This is simply not true, and often it’s more beneficial to file before your property is foreclosed on or repossessed, or before you’re evicted from a rental. You may be able to keep the house or property. Timing is important – don’t wait until days before the foreclosure sale to start the bankruptcy process. You need to complete the required credit counseling and assemble your financial information before you file. Also, if you file after the foreclosure sale, you probably won’t be able to get the property back. That’s why when you are having financial issues, we recommend seeking legal advice sooner rather than later.
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Dealing with Debt Collections During the Automatic Stay
While the bankruptcy automatic stay is in place, it acts as a “stop collections” order for creditors. Creditors should not be contacting you during this time. If they do, tell them you have filed for bankruptcy, give them the case number, and refer them to your lawyer. You don’t need to deal with creditor harassment during bankruptcy – the automatic stay protects you. Note that a small subset of creditors can still try to collect during the stay, such as for child support and student loans.
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Not Paying Taxes or Non-Dischargeable Debts
As mentioned above, certain creditors can seek repayment during bankruptcy. You need to keep making payments on student loans and child support obligations. However, most past tax debt does not need to be repaid while you’re going through bankruptcy. Debtors often get a discharge of that debt, or in some cases, some of it may come due after they finish bankruptcy. Note that you need to continue to file for and pay current taxes during bankruptcy. If you’re not sure which creditors to pay or not pay, check with your lawyer.
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Not Declaring Debts or Assets on Your Bankruptcy Petition
When people are not represented by a lawyer and file for bankruptcy, we sometimes see issues with them forgetting to declare (or purposely omitting) debts or assets on their bankruptcy petition. It is very important that your bankruptcy filing accurately summarizes your entire financial picture. In fact, the laws require it – only one of the many reasons you should get a bankruptcy lawyer.
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Choosing the Wrong Bankruptcy Type
Again, unrepresented filers sometimes choose the wrong bankruptcy type. Doing so can create issues with refiling or properly filing the case. You can avoid this mistake by getting a competent lawyer.
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Missing Required Court Dates
We also encounter some filers who don’t understand the importance of required court dates. For example, the Meeting of Creditors is a mandatory event. While it’s not in front of the judge, if you do not attend, it could have very serious consequences for your case. Make sure to talk to your lawyer about what to expect at any scheduled court dates, and show up early.
FAQs About Bankruptcy Mistakes
How do I learn more about Oregon exemption laws?
Our legal team handles Oregon exemption issues for bankruptcy filers regularly. We’d be happy to set up a consultation and go over your options. It’s best to get advice from a knowledgeable attorney on your exemption options and what can be protected in bankruptcy.
Can you tell me more about bankruptcy mistakes or myths?
We have a page on our website that describes some common bankruptcy myths and why they’re not true. We recommend reading it to learn more. If you have questions, please schedule a free consultation with our legal team.
Reach Out to Our Bankruptcy Team to Learn More
If you need to turn over a new leaf with your finances due to debts, reach out to our firm for legal advice. We offer free and confidential consultations in Oregon. The Law Offices of Alexzander C.J. Adams, P.C. can educate you about your debt-relief options and provide legal services to help you get a fresh start. To learn more, call us at 503-278-5400 or toll-free at 888-588-5410, or you can complete our online contact form. We look forward to hearing from you!
