Wondering if you qualify for bankruptcy in Oregon or Washington? It’s time to get your common questions answered so you can move forward. Bankruptcy is a legal process that allows people who are struggling financially to shed many typical kinds of debt. If you qualify for bankruptcy and follow the required steps, the court will discharge many of your obligations. A discharge means you no longer have to repay a debt.
Thousands of Americans file for bankruptcy every year, and many people with financial struggles qualify to go through this legal process. Let’s walk through the requirements to file for bankruptcy in Oregon and Washington.
Who Can File for Bankruptcy?
In both Oregon and Washington, individuals and married couples can file for bankruptcy. Both spouses in a married couple do not have to file at the same time or at all. However, you should speak to a bankruptcy attorney about your situation, especially if you own property together or share bank accounts. In addition, corporations and other business entities can file for bankruptcy.
How Much Debt Do You Have to Owe to Qualify for Bankruptcy?
Federal and some state laws govern the bankruptcy process. The federal laws offer two types of bankruptcy for which individuals and married couples may qualify: Chapter 7 and Chapter 13 (the chapters refer to sections of the bankruptcy laws).
To determine if you qualify to file for Chapter 7 bankruptcy, your lawyer will compare your current monthly income to the state’s median income, based on the state where you are filing your case. If your current monthly income is more than the state’s median income, your lawyer will need to apply a “means test”, which helps determine if you have too much income to qualify for Chapter 7.
If you don’t qualify for Chapter 7 because you have too much income under the “means test”, then your attorney can talk to you about filing for Chapter 13 bankruptcy. Also, many people who are eligible to file Chapter 7 can opt to file for Chapter 13 instead. To qualify for Chapter 13, your “unsecured debts [must be] less than $526,700 and secured debts [must be] less than $1,580,125 as of the date of filing for bankruptcy relief. 11 U.S.C. § 109(e).” Your lawyer can help you sort out which debts are unsecured and which are secured.
Additional Requirements to Qualify for Bankruptcy
In addition to income and debt requirements, debtors must check a few more boxes to qualify for relief. For example, the court requires you to complete a credit counseling course. Moreover, you cannot file for bankruptcy if you’ve had a previous bankruptcy filing dismissed within the last 180 days because you did not appear in court or comply with court orders, or your case was voluntarily dismissed after your creditors sought to recover property through the court process. If you have any questions about these requirements, please reach out to our firm to learn more about the bankruptcy process and legal representation.
Frequently Asked Questions
What’s the difference between Chapter 7 and Chapter 13?
Chapter 13 involves a repayment plan; debts are discharged only if you complete the plan. The court consolidates your debts into a series of monthly payments. Chapter 7 involves a full discharge of eligible debts without a payment plan. Many of our firm’s clients qualify for exemptions that allow them to keep valuable property even in Chapter 7 cases. Give us a call to learn more!
What is the “means test” for Chapter 7?
The means test determines whether your disposable income is too high to qualify for Chapter 7 bankruptcy relief. If you have enough disposable income to cover a portion of your unsecured debts (like medical bills or credit cards), then the law says that a Chapter 13 repayment plan is more appropriate for you.
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 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: 888-560-8146) or complete our online contact form. We look forward to hearing from you!
