Being overwhelmed with financial debt can lead you to choose bankruptcy as a last resort. It is a great debt relief tool available for individuals, families, and businesses in Portland, Oregon. If you’re thinking about filing bankruptcy, our trusted Portland bankruptcy attorneys are here to help undertand the basics of bankruptcy. At Michael D. O’Brien & Associates PC, we have more than two decades of experience helping Oregon families get debt relief and a fresh start. Call our law firm today at 503-694-4445.
The Basic Bankruptcy Process
Dealing with crippling debt can be overwhelming, but before deciding to file for bankruptcy, you should consider other debt-relief options aside from bankruptcy. Consult with our Portland bankruptcy attorneys to help you choose the best solution for your financial situation.
When filing for bankruptcy, the process involves plenty of paperwork, preparing documents, meeting with a trustee, and going to different court appointments. The whole process usually takes about two to six months to finish, starting from the day you filed your petition up to your last court appointment.
Once you file bankruptcy, a court-issued order immediately occurs, called the “automatic stay.” An automatic stay prevents most creditors and debt collectors from harassing you or from making any debt collection efforts. Once the court issues it, creditors will only seek debt payments if the Oregon bankruptcy court lifts the stay.
Even though the process can take time, bankruptcy will surely help you get back on your feet by resolving your debt crisis and financial burden. To know more about how the automatic stay can help, call our Portland bankruptcy lawyers today.
Basic Bankruptcy Types
Chapter 7: Liquidation Bankruptcy
Chapter 7 is a type of liquidation bankruptcy and is the most common bankruptcy for individuals. A court-appointed bankruptcy trustee oversees the sale of your properties and assets to repay our creditors. Chapter 7 erases unsecured debts, while it can’t erase other types of debts such as taxes and student loans.
Chapter 13: Debt Reorganization
While Chapter 7 erases your debts, Chapter 13 offers a debt reorganization. Under Chapter 13, you’d have to come up with a repayment plan to pay back a portion of your unsecured debts and all of your secured debts in a span of three to five years. You can keep your assets under Chapter 13 and catch up on all your late payments.
Chapter 11: Large Reorganization
Chapter 11 bankruptcy reorganizes your business or corporation so you can pay your creditors. Individuals who can’t qualify for Chapter 13 because they have too much debt can also apply under this chapter.
Handling your finances while dealing with crippling debt can be overwhelming. Our bankruptcy attorneys in Portland, Oregon, are here to help you reorganize your business. We can help you decide the best course of action to take for your financial situation.
Bankruptcy Basics: What Bankruptcy Can Do
Filing bankruptcy can help you get rid of certain debts. This can be helpful so you can focus on other aspects of your financial situation.
Wipe Out Unsecured Debts
Bankruptcy is a great tool to wipe out unsecured debts such as credit card debts, medical bills, personal loans, unpaid utility bills, and gym contracts. Bankruptcy can wipe out most non-priority unsecured debts except for student loans.
Debt is classified as unsecured if you didn’t have collateral for the loan. In contrast, secured debt is any kind of debt that is backed or secured by collateral. Computers, furniture, car loans, or jewelry are often under secured debt.
Wipe Out Secured Debt (By Giving Up the Property)
If you can no longer afford to pay a secured debt, such as a car loan or mortgage, you can wipe out the debt through bankruptcy. However, you’ll end up giving up your car, house, or other property, securing the loan payment. When you consent to secure your debt with property, you must either pay your debt or return the property.
If you’re late on your loan payments and you are at risk of losing your home or getting your car repossessed, connect with a Portland bankruptcy attorney right away. Our Portland foreclosure and repossession lawyers can help you stop a home foreclosure or prevent car repossession.
Keep Your Property Through Bankruptcy
When filing for bankruptcy, you’re required to take the bankruptcy means test. The bankruptcy means test is an objective method to weigh whether a borrower qualifies for bankruptcy under Chapter 7. If you have a regular income exceeding Oregon’s median income but face unmanageable debts, then Chapter 13 fits your situation best.
Through Chapter 13, you can keep your property while dealing with your debts. Chapter 7, on the other hand, takes care of your debts through liquidation. This means that some of your properties may be sold by a bankruptcy trustee to repay your creditors. To know more about bankruptcy basics, seek the help of a bankruptcy lawyer. Our Portland bankruptcy attorney can determine if you can keep your property after bankruptcy. Call us at 503-694-4445 for an initial consultation.
Bankruptcy Basics: What Bankruptcy Can’t Do
While bankruptcy can help you manage your debts and give you a fresh start, it can’t cure all debt problems.
Bankruptcy Can’t Help You Keep a Property You Can’t Afford
While a bankruptcy discharge eliminates unpaid debts, it cannot eliminate liens. A lien allows a lender to foreclose a home or repossess a car, sell it, and use the proceeds to pay the loan balance. Bankruptcy can eliminate your duty to pay a secured debt. If you fail to pay the lien, a creditor can still recover the property used as collateral. To know if you’re eligible for lien stripping, connect with a Portland bankruptcy attorney.
Bankruptcy Can’t Eliminate Child Support and Spousal Support
You still have to pay your alimony and child support obligations even after bankruptcy. If you filed a Chapter 13, you’d have to pay it in full through your debt repayment plan.
Bankruptcy Can’t Discharge Student Loans
You can only eliminate a student loan in bankruptcy if you prove that repaying the student loan would only bring you unnecessary hardship.
Bankruptcy Can’t Eliminate Tax Obligations
You can only eliminate tax debt in bankruptcy if:
- The debt is at least three years old
- The debt is an income tax
- You didn’t commit fraud
- You filed a tax return
Got Debt? Call a Portland Bankruptcy Attorney Today!
Being overwhelmed with financial debt can sometimes lead you to choose bankruptcy as a last resort. It can be an excellent tool for debt relief, but filing for bankruptcy is a serious decision that you have to think through. Bankruptcy filing has certain advantages and disadvantages, and it is up to you to weigh the pros and cons between filing and not filing. If you want to know more about bankruptcy basics, our Portland bankruptcy law firm can help you determine whether bankruptcy or a bankruptcy alternative is right for you. Call us today at 503-694-4445 to schedule an appointment.