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Bankruptcy: Oregon

Filing bankruptcy in Oregon gives debtors an opportunity to overcome overwhelming debt and allows creditors to be repaid to the extent that the debtor’s property value or earnings permit. 19,779 bankruptcies were filed in Oregon in 2010, ranking Oregon 19th in the country for the number of bankruptcy filings per capita. 78% of Oregon’s bankruptcy petitions in 2010 sought protection under Chapter 7 bankruptcy.

Filing Bankruptcy in Oregon

Federal law governs bankruptcy proceedings in Oregon, therefore all bankruptcy cases are filed in the US Bankruptcy Courts located in Bend, Coos Bay, The Dalles, Eugene, Klamath Falls, Medford, Pendleton, Portland, Roseburg and Seaside.

While federal courts have jurisdiction over bankruptcy proceedings, Oregon law disallows petitioners from using the exemptions listed in the U.S. bankruptcy code, requiring instead that debtors choose from the state exemptions list. An Oregon bankruptcy attorney can help explain to petitions what personal property the exemptions permit the debtor to retain in bankruptcy, and what must be sold.

Chapter 7 Bankruptcy, Oregon

Chapter 7 bankruptcies in Oregon are the most common bankruptcy filing.  Chapter 7 is best suited to petitioners who lack significant assets such as investments or substantial equity in a home, since a Bankruptcy Trustee may liquidate personal property that isn’t protected by Oregon’s bankruptcy exemptions. Liquidation takes place when the Trustee converts personal assets to cash to distribute to creditors. Oregon’s Chapter 7 bankruptcy law allows debtors to keep some essential property and the exempt assets are off-limits to creditors seeking repayment.

The vast majority of Chapter 7 cases are “no-asset” cases where no property is taken.

Oregon Bankruptcy Exemptions

Oregon bankruptcy law designates specific property exemptions that allow debtors to keep certain personal property and assets so they may move forward from bankruptcy as productive members of society.  To be blunt, this means creditors cannot pressure debtors to sell the shirt off their backs to settle a debt.  Bankruptcy in Oregon permits petitioners to choose exemptions only from the state list.

Property exemption values may have changed since this writing, so it is wise for anyone considering filing bankruptcy to seek the advice of an Oregon bankruptcy attorney and learn the options open to them.  Oregon bankruptcy exemptions include:

Oregon Homestead Exemption

  • Homestead proceeds used for rent count as reinvestment within one year.
  • Prepaid rent and security deposits for renter’s dwelling
  • Real property of a soldier or sailor during time of war
  • Tenancy by entirety not exempt, but subject to rights of non-debtor spouse
  • $40,000 total: Real property, mobile home or houseboat you occupy or intend to occupy ($50,000 for joint owners);  property cannot exceed 1 block in town or city or 160 acres elsewhere; sale proceeds exempt 1 year from sale, if you intend to purchase another home

Oregon Personal Property Exemption

  • $7,500 total: Bank deposits, cash for sold exempt property
  • $3,000 total: Furniture, household items, utensils, radios and TVs
  • $600 total: Books, pictures and musical instruments (Husband and wife may double)
  • $1,800 total: Clothing, jewelry and other personal items (Husband and wife may double)
  • $1,000 total: Domestic animals, poultry and pets plus food to last 60 days
  • $7,500 total: Higher education savings account
  • $10,000 total: Personal injury recoveries (Husband and wife may double)
  • $1,000 total: Pistol, rifle or shotgun (owner is 16 or over)
  • $3,000 total: Motor vehicle (Husband and wife may double)
  • Food and fuel to last 60 days if debtor is householder
  • Building materials for construction of an improvement
  • Burial plot
  • Compensation for lost earnings payments for debtor or someone debtor depended on, to extent needed (Husband and wife may double)
  • Federal earned income tax credit
  • Health aids

Oregon Tools of Trade Exemption

  • $5,000 total: Tools, library, team with food to last 60 days (Husband & wife may double)

Oregon Wage Garnishment Exemption

  • 75% of disposable wages or $170 per week, whichever is greater (Low-income debtors may be authorized for more)
  • Wages withheld in state employee’s bond savings accounts

Oregon Public Benefits Exemption

  • $7,500 Total: Aid to blind
  • $7,500 Total: Aid to disabled
  • $7,500 Total: Civil defense and disaster relief
  • $7,500 Total: General assistance
  • $7,500 Total: Medical assistance
  • $7,500 Total: Old-age assistance
  • $7,500 Total: Workers’ compensation
  • $7,500 Total: Unemployment compensation
  • $7,500 Total: Vocational rehabilitation
  • $7,500 Total: Injured inmates’ benefits
  • Klamath Indians tribe benefits for Indians residing in Oregon
  • Veterans’ benefits and proceeds of veterans loans
  • Crime victims’ compensation (Husband and wife may double)

Oregon Insurance Exemption

  • $500 per month: Annuity contract benefits
  • Health or disability proceeds or avails
  • Fraternal benefit society benefits
  • Group life policy or proceeds not payable to insured
  • Life insurance proceeds or cash value if you are not the insured

Oregon Pensions and Retirement Savings Exemption

  • $7,500 total: ERISA-qualified benefits, including IRAs and SEPs
  • $7,500 total: Public officers, employees pension payments

Oregon Miscellaneous Exemption

  • Alimony, child support needed for support
  • Liquor licenses

Chapter 13 Bankruptcy, Oregon

In 2010, 22% of debtors filed for protection under Chapter 13 bankruptcy in Oregon.  Filing Chapter 13 bankruptcy in Oregon starts a financial reorganization process in which a court-appointed Trustee negotiates with creditors and implements a 3-5 year repayment plan using the debtor’s future earnings to repay creditors.  Chapter 13 petitioners in Oregon keep most – or all – of their property.

How to File Bankruptcy in Oregon

Your decision to file for bankruptcy protection from creditors should reflect your eligibility for property exemptions. The desired outcome should be the protection of major assets and discharge of debts. Because each bankruptcy case is unique, an Oregon bankruptcy attorney can inform debtors of the exemption rules and financial options concerning Chapter 7 and Chapter 13 bankruptcies.

Bankruptcy Attorney: Oregon

It is the bankruptcy petitioner’s responsibility to know their rights and obligations as a debtor.  The bankruptcy process can be complex and emotionally taxing for many.  An Oregon bankruptcy attorney can inform petitioners about Oregon bankruptcy exemption regulations and provide expert counsel on suitable bankruptcy options for each financial situation.