If you’re in debt and interested in filing for bankruptcy in Oregon, you’re probably wondering whether Chapter 7 or Chapter 13 is right for you. Each kind of bankruptcy has important differences that you should understand as you go through the process. Under the law, some people must file for one type of bankruptcy rather than the other. We recommend that you speak with an experienced Oregon bankruptcy attorney to determine what is right for you.
Chapter 7 Bankruptcy Basics
In Chapter 7 bankruptcy, the court helps you assess your liabilities and discharge some of your debts to get a clean start. Once debts have been discharged, you do not owe them anymore. Creditors cannot come after you for these discharged debts. For people mired in medical or credit card debt, Chapter 7 bankruptcy can be a lifesaver.
Not everyone can file for Chapter 7. The bankruptcy laws require a “means test” to determine whether a debtor’s income is too high to qualify. The means test involves comparing your average income in the last six months to your state’s median income by household size. Several exceptions could apply if your income exceeds the allowed amount. Because the means test requires a detailed assessment of your income and financial situation, it’s important to talk to a bankruptcy attorney before you file for Chapter 7.
Chapter 13 Bankruptcy Basics
In Chapter 13 bankruptcy, the court helps you assess your income and liabilities, then approves a payment plan. The payment plan typically combines payments on many of your debts into a single monthly payment. When you complete the payment plan, the court discharges any remaining debts that can be discharged according to the law. You make payments on some of your debts because you have income coming in, but you typically end up paying less during the payment plan than you would have without it.
Some people have to file for Chapter 13 rather than Chapter 7 because their income exceeds the means test threshold. Some people choose to file for Chapter 13. They want to retain certain assets that debtors may have to surrender under Chapter 7 because they can’t afford to make the payments.
Chapter 7 or Chapter 13? Talk to an Attorney
To figure out whether you meet the means test and can file for Chapter 7, or whether you qualify for a payment plan under Chapter 13, it’s very important to speak to an attorney. Filing for the wrong chapter of bankruptcy can have significant consequences. It’s best to start out your bankruptcy journey correctly, using all the resources at your disposal. Though you’re going through a tough time financially, hiring a bankruptcy attorney is not expensive compared to the cost of having to pay back all your creditors or making mistakes when filing.
Frequently Asked Questions
Can I file for bankruptcy if I’m married?
Yes, you can file for bankruptcy if you’re married. In Oregon, married couples can file jointly or separately. One spouse can declare bankruptcy without the other doing so. That said, it’s best to speak with a bankruptcy attorney about your best options if you are married and considering bankruptcy. Deciding whether both you and your spouse or one of you individually should file for bankruptcy depends on several factors, including your overall financial situation.
When is it time to file for bankruptcy?
We often hear from potential clients who are unsure whether it’s time for them to file for bankruptcy. Bankruptcy helps Americans who are struggling with debt get a fresh start. If you’re having trouble making monthly payments, are overwhelmed by your debt, or aren’t sure if you can cover your bills next month, bankruptcy might be a good option for you. Our Oregon bankruptcy team would be happy to speak with you about your situation – please give us a call!
Reach Out to a Bankruptcy Attorney to Turn Over a New Leaf
If you’re fielding calls from debt collectors and 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 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: 888-560-8146) or complete our online contact form. We look forward to hearing from you!
