Who Can File Bankruptcy?


Portland Bankruptcy Lawyers

Who Can File Bankruptcy? Many people in debt wonder if they can file bankruptcy. The good news is that most people can qualify to eliminate their debts through Chapter 7 or Chapter 13 bankruptcy. If you are tired of overwhelming debt, stress, and financial burden, then bankruptcy may be your best option.

Our Portland bankruptcy lawyers at Michael D. O’Brien & Associates PC have over two decades of expertise serving Oregon families with Chapter 7 and Chapter 13 bankruptcy, wage garnishment, house foreclosures, auto repossessions, lien stripping, and equitable debt collection.

Unlike other Oregon bankruptcy lawyers, we recognize that bankruptcy is not for everyone, so we also provide non-bankruptcy solutions to help you handle your financial difficulties.

What is Bankruptcy?

Bankruptcy is a court action in which a judge and a court trustee review the assets and obligations of individuals, partnerships, and corporations whose debts have grown so demanding that they do not feel they can pay them. 

The court decides whether to discharge the obligations, which means that individuals who owe are no longer legally compelled to pay them. The court may also dismiss the lawsuit if it considers the individual or corporation has sufficient assets to pay their liabilities. 

Who Declares Bankruptcy?

Most individuals and businesses who filed for bankruptcy have considerably more obligations than money to cover them, and this situation is unlikely to change very soon. In 2020, bankruptcy filers owed $86 billion and had $56 billion in assets. The majority of such assets were real estate holdings, the value of which is questionable.

What is shocking is that people, not corporations, are the most likely to declare bankruptcy. They owe money on a mortgage, credit card debt, vehicle loan, or school loan – and don’t have the money to pay for it. Debtors who did not pay their debts had to file or go through the bankruptcy process and suffer the consequences. 

When Should I Declare Bankruptcy?

Dealing with financial issues may be stressful and daunting. Declaring bankruptcy is sometimes the recommended means to get out of debt and start over. Each person’s financial circumstances are unique, and the intricacies of bankruptcy can be complicated. You should know several things before filing for bankruptcy, such as which form of bankruptcy to file, when to file, and how bankruptcy may damage your credit.

Confronting oneself about your ability to pay your debts is critical when considering bankruptcy. If you think you no longer have the ability to pay your debts, you may consider filing for bankruptcy. Debt settlement can be a comfort for an individual but also has drawbacks, such as making it difficult to obtain a loan in the future. Bankruptcy laws must be considered, and if you require the assistance of a bankruptcy attorney, do not hesitate to get it. 

Types of Bankruptcy

Chapter 7

You can preserve some “exempt” assets up to a specific amount in a Portland Chapter 7 bankruptcy, commonly known as a “liquidation bankruptcy.” Subsequently, you would be required to turn over all non-exempt assets to a Bankruptcy Trustee.

The trustee will next assess your financial holdings and sell any assets not covered by the exemption, distributing the profits to unsecured creditors to pay off obligations. The remaining unsecured debts will be dismissed at the end of this process. If the Trustee determines that there are no assets to sell, the bankruptcy case will be listed as a “no-asset case” and closed. 

The entire procedure would take roughly 3 to 4 months in bankruptcy court. We have Chapter 7 bankruptcy attorneys in Portland at Michael D. O’Brien & Associates, P.C. that can assist you throughout the bankruptcy process.

Chapter 11

Businesses that file for Chapter 11 bankruptcy can reorganize their obligations, allowing them to stay afloat. It is intended to assist debtors in developing a financial plan that creditors and the Court will agree on for the firm to remain operational. The agreement will include reducing interest rates, revising payment due dates, or completely canceling debts! 

The new contract will be implemented, and the filer will get a debt discharge as long as all creditors agree on the conditions. Our Portland bankruptcy lawyers at Michael D. O’Brien and Associates can assist you in determining which bankruptcy option is best for you.

Chapter 13

A Chapter 13 bankruptcy allows you to preserve your properties with secured loans (obligations with collateral), such as your vehicle and house, and to establish a repayment plan for your debts.

It is a reorganization bankruptcy designed for those with a steady income who can set aside a portion of their monthly income to pay off their debts. The amount that must be paid back under Chapter 13 is determined by your income, the kind and quantity of debts you have, and your property and assets value. 

How to File for Bankruptcy?

A Chapter 7 bankruptcy may discharge your debts. On the other hand, a bankruptcy trustee will liquidate or sell a portion of your assets to repay what you owe. This sort of bankruptcy typically lasts 4-6 months and can be filed by both individuals and corporations. There are some exempt properties under state regulations that you can maintain in this sort of bankruptcy.

Eligibility for Chapter 7 Bankruptcy

When in financial trouble and want to file this kind of bankruptcy, you must:

  • Pass the means test for bankruptcy (which covers your assets, monthly income, and living expenses)
  • Have not completed a Chapter 7 bankruptcy (within the last eight years) or a Chapter 13 bankruptcy (in the previous six years)
  • Have not (in the recent 180 days) filed a bankruptcy petition that was dismissed (because of failure to appear or follow court orders)
  • Have not filed a petition that was voluntarily dismissed (also within the past 180 days)

Individuals who are bankrupt and wish to file for Chapter 13 bankruptcy must have a stable source of income to repay their obligations. Also known as a “wage earner” bankruptcy, this is typically beneficial if you are a high-income earner looking to restructure your obligations. 

You can keep all of your properties and assets in this sort of bankruptcy, but you must reimburse your creditors for non-exempt assets through a debt repayment plan. A payment plan of this nature will last three to five years.

How to File for Bankruptcy Under Chapter 13

If you intend to file for Chapter 13 bankruptcy, you should generally take the following steps:

  • Consult a credit counselor to review your finances and debt restructuring plans with a local attorney, who will assist you in documenting your eligibility.
  • Collaborate with your Chapter 13 bankruptcy trustee to obtain permission from the court to repay secured and unsecured obligations while keeping your assets.
  • You must formally file your bankruptcy petition to benefit from the automatic stay.
  • Submit your suggested payment plan 14 days after filing the petition, and aim to make payments within 30 days of filing, even if the bankruptcy court has not yet authorized it.
  • Complete the mandatory debtor education course and attend the confirmation hearing.

If you have financial issues and growing debt, we can help you get back on track. Our skilled Portland bankruptcy attorneys can walk you through the whole bankruptcy process so you can start over. Contact Michael D. O’Brien & Associates, P.C to explore your choices and receive confidential, expert legal advice.

Bankruptcy law is complex and ever-changing. Every situation is different. 

The best way to know what your options are in relation to bankruptcy is to speak with a reputable bankruptcy attorney about your situation. At Michael D. O’Brien & Associates PC, we are ready and willing to answer any questions you may have in regard to Chapter 7, 11, or 13 bankruptcy. 

Call Michael D. O’Brien & Associates PC today to speak with bankruptcy lawyers who can examine your current financial condition and provide the best option for your financial circumstances.

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FACING COMPLEX DEBT PROBLEMS?

Whether you're dealing with overwhelming debt, stopping foreclosure or repossession proceedings, or looking for a way to protect your assets, our Portland bankruptcy attorneys are here to help you overcome your financial hurdles!

Please be aware that submission of this no-obligation form does not establish an attorney-client relationship. By filling out the form, you agree to receiving emails from our firm regarding your case evaluation and other helpful resources. 

What debt problems are you having?

Disclaimer:By submitting this form you consent to our privacy policy. If you prefer contact via text you understand that *regular text message rates may apply. The information presented on this site should not be construed as formal legal advice and your submission of this form does not establish a lawyer/client relationship. We are proud to be a debt relief agency who frequently, but not always, helps people get relief through bankruptcy.

portland bankruptcy attorney logo

FACING COMPLEX DEBT PROBLEMS?

Whether you're dealing with overwhelming debt, stopping foreclosure or repossession proceedings, or looking for a way to protect your assets, our Portland bankruptcy attorneys are here to help you overcome your financial hurdles!

Please be aware that submission of this no-obligation form does not establish an attorney-client relationship. By filling out the form, you agree to receiving emails from our firm regarding your case evaluation and other helpful resources.