How to Determine Eligibility for Bankruptcy in Oregon

Filing for bankruptcy is a significant financial decision that requires careful consideration, especially in Oregon. Understanding the eligibility criteria is crucial to navigate this complex process effectively. This guide outlines how to determine if you meet the eligibility requirements for bankruptcy in Oregon.

There are primarily two types of personal bankruptcy individuals may file in Oregon: Chapter 7 and Chapter 13. Each has its own set of eligibility requirements.

Chapter 7 Bankruptcy Eligibility

Chapter 7 bankruptcy is often referred to as “liquidation bankruptcy,” where a trustee may sell non-exempt assets to pay off creditors. To qualify for Chapter 7 in Oregon, you must meet the following criteria:

Means Test: You must pass the means test, which evaluates your income against the median income for Oregon. If your income is below the median, you may qualify. If it's above, further calculations involving your expenses will be necessary to assess your eligibility.
Previous Filings: You cannot have filed for Chapter 7 bankruptcy in the past eight years. If you received a discharge in a previous bankruptcy, this rule applies.
Credit Counseling: Completion of a credit counseling course approved by an authorized agency within 180 days before filing is mandatory.

Chapter 13 Bankruptcy Eligibility

Chapter 13 bankruptcy, also known as “reorganization bankruptcy,” allows individuals to reorganize and repay debts over a period of three to five years. To be eligible for Chapter 13 in Oregon, you must meet the following criteria:

Regular Income: You must have a regular source of income to fund your repayment plan. This can include wages, self-employment income, pensions, or benefits.
Debt Limits: Your unsecured debts must be less than $465,275, and secured debts must be under $1,395,875, as of April 2023. These limits are adjusted periodically, so checking the current figures is advisable.
Previous Filings: You must have not received a discharge in a Chapter 13 case within the past two years.
Credit Counseling: Similar to Chapter 7, you must complete a credit counseling session from an authorized provider before your filing.

Assessing Your Financial Situation

Before filing, conduct a thorough assessment of your financial situation. Consider your debts, assets, income, and expenses:

Debts: Compile a list of all your debts, including credit cards, medical bills, and personal loans.
Assets: Identify your assets, including property, vehicles, and savings accounts. Understanding which assets are exempt under Oregon law is crucial.
Income: Calculate your total income from all sources to determine your eligibility under the means test and assess your ability to maintain a repayment plan.
Expenses: Analyze your monthly expenses to see if you can realistically afford a repayment plan if you choose Chapter 13.

Consulting a Bankruptcy Attorney

Given the complexities of bankruptcy law, consulting with an experienced bankruptcy attorney in Oregon can provide invaluable guidance. They can help you understand your options, evaluate your eligibility, and navigate the filing process.

In conclusion, determining eligibility for bankruptcy in Oregon involves understanding the specific requirements for Chapter 7 and Chapter 13 filings. Conduct a careful analysis of your financial situation and consider seeking professional legal advice to guide you through the process effectively.