If you’re exploring filing bankruptcy in Oregon or Washington, here’s your 2026 guide. We’ll answer common questions, give you an idea of what to expect, and help you get started gathering information for your lawyer.
What Does It Mean to File for Bankruptcy?
Filing for bankruptcy means you are having financial problems and you need a fresh start. In the United States, the law allows you to seek a discharge of many types of debt by going through the bankruptcy process. It’s a legal process governed by the federal bankruptcy courts in each state and by federal and state laws. When you successfully go through the process, the court will issue a discharge, which is an order stating that many of your creditors must stop pursuing debts you owe them, and the debts essentially disappear.
Are There Different Types of Bankruptcy?
Yes, you may have heard of Chapter 7 and Chapter 13 bankruptcy. These are the avenues for individuals and married couples to file for bankruptcy. The numbers refer to sections of the bankruptcy law. Chapter 7 is also called “liquidation”, because the bankruptcy trustee handling a case can sell the person’s non-exempt assets to pay off creditors. Chapter 13 is also called “reorganization” because the court consolidates debts into a single monthly payment made over time until debts are fully or partially paid off.
Who Can File for Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is available to many people with limited income or little disposable income to pay off debts. Those who qualify either have monthly income below the state median or pass a “means test” indicating they have little disposable income. The means test is complex, so we recommend that you consult a lawyer to determine whether Chapter 7 bankruptcy is right for you.
Who Can File for Chapter 13 Bankruptcy?
Many people who have too much income to qualify for Chapter 7 can file for Chapter 13 instead. Chapter 13 does have some upper limits on debt: your unsecured debts must be less than $526,700, and your secured debts must be less than $1,580,125. Again, we recommend speaking with a lawyer to better understand whether you qualify and which debts are secured or unsecured.
Can Creditors Still Collect During Bankruptcy?
Most creditors cannot collect on your debts after you file for bankruptcy, during a period called the “automatic stay”. The automatic stay is one of the most powerful bankruptcy tools available. It’s a “stop collections” order from the court. While it’s in effect, creditors can’t bother you about your debts (except a few limited exceptions). If you hear from a creditor during your bankruptcy, notify your lawyer right away so they can take action.
Can I Keep My Personal Property in a Bankruptcy?
Our firm works with many clients who are concerned about keeping their personal property during and after bankruptcy. Fortunately, bankruptcy exemptions can protect much personal property from being sold off to pay creditors. People often keep their homes, cars, personal possessions, and other items under the exemption laws. If you have questions about exemptions, we invite you to schedule a free consultation with our legal team to learn more.
FAQs About Filing Bankruptcy
If I qualify for Chapter 7, can I choose to file Chapter 13 instead?
Yes, people who qualify for Chapter 7 can file under Chapter 13 instead, but the reverse is not available. We work with clients who choose Chapter 13 because a lengthy payment plan better suits their situation and goals than a quick debt discharge.
I spend time in both Oregon and Washington – does it matter where I file?
Yes, there are specific rules about where you can file your bankruptcy case. It’s a good idea to hire a lawyer to determine where you should file. Some state laws impact bankruptcy cases, and those laws differ from state to state.
Considering Filing Bankruptcy? Contact Us
If you need to turn over a new leaf with your finances, reach out to our firm for legal advice. We offer free and confidential consultations for debtors in Washington and Oregon. Learn more about your debt-relief options by talking with a bankruptcy attorney at the Law Offices of Alexzander C.J. Adams, P.C. To get started, call us at 503-278-5400 (toll-free: 888-588-5410) or complete our online contact form. We look forward to hearing from you!
