Oregon Bankruptcy Lawyer Blog

My Husband and I are Divorcing, Should We Still File a Chapter 7?

2009-11-23T17:45:18Z

Every now and then in my Portland Oregon bankruptcy practice I have a couple come in for a consult that asks that very same question. Typically they have been living apart for a short period of time and are in the process of getting a divorce but it has not been finalized yet. The question of whether a bankruptcy makes sense either before or after the divorce always comes up.

While each bankruptcy case is unique in general it can be a good idea to file while the couple is still legally married. First qualifying for the means testing can be easier while married; allowing for a higher income threshold. Second, if as a couple, you are able to extinguish all your debts before you divorce; then the family law court may not make a determination that is adverse to your interests. For example the family law court may hold one spouse liable for all the debts of the marriage or award a higher support order to compensate for the debt burden. If you both file a Chapter 7 (Chapter 13 bankruptcy probably wouldn't make sense because you'll be divorced in the middle of the plan) then your debt load, with some exceptions, will be discharged and that item can be removed from the divorce calculations.

As with many issues, this can be a complex one and creating a Chapter 7 bankruptcy petition that the Oregon courts will not object too can be tough. Its always a good idea to speak with a knowledgeable bankruptcy attorney before taking any action.

THE RICH ARE NOT IMMUNE: CHAPTER 7 AND CHAPTER 11 BANKRUPTCY FILINGS ARE WAY UP FOR THE HIGHEST EARNERS AMONG US.

2009-09-09T17:05:33Z

So maybe the 'rich' wont be able to pay for all those new tax hikes and fee's. It looks like their own bankruptcy filings are on the increase and their household budgets are tight like the rest of us. The Bloomberg article notes an increase in Chapter 11 bankruptcy filings for the highest income folks in the U.S. It seems like the primary driver in these increase in bankruptcy filings is...wait for it....real estate. Too much mortgage and not enough value have put even the rich into a cash crunch. I hate to think what will happen when all those interest-only jumbo loans start hitting their 10 year adjustment mark around 2012...I don't see Chapter 11 filings or for that matter Chapter 7 filings for the high income set declining anytime soon.

Will His Freezer Full of Cash be Exempt in a Chapter 7 Bankruptcy?

2009-08-31T19:40:51Z

After a quick consult this morning with a potential bankruptcy client I came across this article detailing that former U.S. Representative William Jefferson filed a personal Chapter 7 bankruptcy last week. Mr. Jefferson was once found with a freezer full of cash to the tune of about $90,000 and was recently indicted on corruption charges. Details about the bankruptcy are in the article. The one thing that struck me is that I usually tell my bankruptcy clients that its rare that a Trustee will be an in-home audit (or inspection) in Chapter 7 cases; somehow I think with this guys past it might be a good idea for the trustee to search the house....

If you have a freezer full of cash or other assets you are worried about my firm would be happy to talk to you about your options and duties under a Chapter 7 or Chapter 13. Feel free to contact one of our attorney's anytime.

Enjoy the day.

Oregon Bankruptcy Lawyer Talks About a Rise in Business Bankruptcy Filings

2009-08-24T19:26:35Z

Oregon Bankruptcy Lawyer Talks About a Rise in Business Bankruptcy Filings

My bankruptcy practice mostly deals with personal (consumer) bankruptcy filings, both Chapter 7 and Chapter 13 cases. However this article details the other side of the filing spectrum, business bankruptcy. In total, business filings have increased by over 60% from 2008 numbers. This includes over one hundred percent increase in Chapter 11 filings and about a 50% increase in Chapter 7 business filings. These numbers probably don't include the many thousands of small business owners who are not corporate or partnership entities or who choose to file under the personal bankruptcy sections. Either way the numbers are not good for our economy and business in general. Hopefully the acceleration in bankruptcy filings will wane going into the fall and we can see a rebound in the Oregon business climate.

If you have any questions regarding either a personal bankruptcy filing in Chapter 7 or Chapter 13 or a business bankruptcy filing please contact our office. One of our bankruptcy lawyer's will be happy to set up a no-cost consultation to go over your options and see if a bankruptcy is right for you.

"Live with Passion"

Oregon Enacts Tax Amnesty Program

2009-08-17T00:22:47Z

A large percentage of my bankruptcy clients have large tax debts. Certain Federal taxes are easy to discharge but State of Oregon taxes are another story. A little bit of good next came out of Salem Oregon earlier this month; the Governor signed into law a tax amnesty program designed to reduce the back interest and penalty's that are due and set up a payment plan for the balance. For those in active bankruptcy filings there are some special requirements and you should talk to a knowledgeable bankruptcy lawyer about this program and what it might mean for your Chapter 7 or Chapter 13 filing; but if a bankruptcy is not able to help your State tax debt then this program might be helpful for you.

-A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain.

Portland Oregon Ranks Number 5 in Small Business Bankruptcy Filings

2009-08-16T21:08:37Z

Here's a small news story that should not come as much of a surprise for those of us living in the Portland Oregon Area. As a bankruptcy attorney I'm on the ground floor of seeing these changes and am surprised that its just now hitting the news. According to equifax Portland is 5th in small business bankruptcy filings following such large metro's as Los Angeles, Sacramento and Atlanta. As you can imagine real estate is the primary driver for the filings. Builders, contractors, real estate companies and mortgage companies have all been imploding up here for some time. The businesses that relied on those businesses have now started to collapse as well.

Without getting too political, I wish that the State of Oregon would do more to foster new business and create a climate where one can start, grow and mature a business. Instead the legislature decided to raise personal income taxes and business taxes by hundreds of millions of dollars. I cannot see how this will stem the tide of bankruptcy filings by small business nor do I see the new taxes as a way to bring more business to the State of Oregon or the Portland Area. My guess is we'll see more articles like this one showing what a poor State this is to do business in, but what do I know?...I'm just a bankruptcy lawyer in Portland.

Live with Passion

Pre-Bankruptcy Issues: Getting Ready for the Phone Calls.

2009-08-16T20:49:11Z

Probably the largest complaint I receive as a portland bankruptcy attorney is about the creditor calls my clients receive. They start typically 1-2 weeks after a payment is missed and increase in frequency the longer you don't make the payments. The first calls will usually be a couple of courtesy calls asking to set up a payment to get caught up. They will graciously agree to waive the 14.00 over the phone payment. Since you couldn't make the payment in the first place, you probably wont be able to make this one either; so its irrelevant.

]]> The next series of calls get more annoying. These are robo calls. I'll use Citibank credit card as an example. You'll start receiving calls from them about 45 days after you failed to make a credit card payment. If you don't pick up they wont leave a message and you'll know its a Citibank robo call because it will come from the 816 area code, where Citibank has a large collections call center. If you do pick up, a recording will ask you to wait for an 'important message'. You'll be connected with a collector that will offer you some options to pay. Most are not that great. Most of my bankruptcy clients cannot pay off the options on their terms and the collectors are rarely able to make any sort of real accommodation. If that's the case then its best to ignore the subsequent calls.

If you ignore the calls be prepared to be called every hour in spurts. I.E. from 8-11 AM then 5-7 PM on random days. These calls can continue for months. If you do hire a Chapter 7 bankruptcy attorney (Chapter 13 as well) they can help end the calls. You may also want to look up the "fair debt collection practices act" for some advice on stopping the calls on your own. Bottom line is that you don't have to put up with harassment and the easiest tactic is to learn the numbers they call from and ignore them. Some phone companies also have the ability to block calls from certain numbers. Don't let them intimidate you. Know your options, talk to a good bankruptcy attorney if your debt is overwhelming and you would like some relief and stay optimistic. There are ways out of your situation and there are honest folks out there who can help.

Live for today

Being Loud Doesn't Keep you from Filing a Bankruptcy

2009-08-15T21:54:51Z

Here's a quick note showing that nobody is immune from today's negative economic environment. Celeb. chef Gordon Ramsey, known for his foul mouth and good eats is facing a possible personal bankruptcy Profits are down at his fancy eating joints and Mr. Ramsey has resorted to selling his London home and down grading his sports car to something more modest. Probably good moves. I feel for his staff that's been cut and really don't have a place to go to.

Personal Bankruptcy Filings Soar to New Levels

2009-08-15T20:58:59Z

It should not come as too much of a surprise that new figures this week show Chapter 7, Chapter 13 and Chapter 11 personal bankruptcy filings have gone up over 34% from 2008 to present. The rate of increase is shocking and a little scary, even for a bankruptcy lawyer such as myself. Here is Portland Oregon where I practice as a bankruptcy lawyer I've seen at least as much as a 30% increase in business; probably closer to 50%. The clients that I see on a daily basis are coming from all walks of life and more and more I hear that folks never thought they'd be having to file for a Chapter 7.

I think this increase, and I believe that it will go much higher is due to the fact that many folks have been holding on; using a bankruptcy filing as the very last resort and that they will exhaust other means (consolidation, 401k cash outs, balance transfers, etc) before considering a bankruptcy. Its seems that many of the people I help have simply run out of options. While I'm not advocating being flippant about a filing, I do think that people can benefit talking to a bankruptcy lawyer early on when you sill have options. We can often help people plan their way out of distress without a filing and if a filing is necessary, help them plan for the bankruptcy in an orderly fashion.

Most bankruptcy lawyer's don't charge for a quick consult (myself included) so there should be no reason not to talk to one of us; even if we end up saying a bankruptcy is not right for you...at least you'll know all your options early.

Be well for today

Michael Vick and a Confirmed Chapter 13 Bankruptcy Plan

2009-08-15T20:53:49Z

Well, there is good news for Michael Vick these days. Not only is he out of jail and signed by the Philadelphia Eagles but his Chapter 13 Bankruptcy plan will be confirmed now. Not many people knew that Michael Vick filed for bankruptcy, it didn't seem to make that large of a headline but even more unknown was that the Bankruptcy judge assigned to his case refused to confirm his plan until he signed. The judge noted that even though Mr. Vick has talent and would likely be employable until he inked a contract with a team, he could not show the steady income needed to support his Chapter 13 plan payments. So just like the rest of us, the rules of bankruptcy apply. That's good to know. Its also a reminder for those looking to do a Chapter 13 that a major hurdle is the ability to show the trustee and judge that your income will support the payments for anywhere between 36 and 60 months.

So if you don't have a sports agent sitting next to you, be prepared to show pay stubs, tax returns and bank statements. You should also be able to explain why your income is likely to be steady and what line of work you are in. A good bankruptcy lawyer can help you map that out or you can sign an NFL contract.

Go Eagles

HOUSEHOLD BILL PAYMENT WHEN YOU HAVE FILED A BANKRUPTCY IN OREGON

2009-07-22T19:02:11Z

As a bankruptcy lawyer in Portland Oregon I find that a good part of my job decription is that of a financial planner and counselor. I work with my bankruptcy clients to budger, increase their cash flow and manage their secured and unsecured debt. Today I like to talk briefly about a common question that comes up...Do I still pay my bills when I have filed for a Chapter 7?

Now my typical bankruptcy lawyer reponse is "it depends". Seriously there are a lot of variations and this article should not substitute for a sit down with our firm or another bankruptcy law firm so an attorney can go over the exact details of your case. That said; typically you will not have to pay all your tier 2 bills either before or during the bankruptcy.

]]> The first thing I should do however is define tier 1 and tier 2 'bills'. In my view a bill is an ongoing expense used to maintin your housefhold. This is dfferent then debt. Bills can include cells phones, water bills, cable, internet, etc. Things you need in your everyday life. These tier 1 bills you should continue to pay before, during and after your chapter 7 bankruptcy filing. You may need permission to9 pay these so please talk to your lawyer or court before you take any action. My little mantra for bill payment is that you'll need to pay for what you want to keep..."you like water? Pay your water bill. You like electricity in your home? Pay your electric bill. You get the idea.

Now what I call tier 2 bills are a bit different. These are your ongoing debt payments; credit cards, mortgage bills, medical bills, etc. When you have filed for a Chapter 7 these creditors are not able to contact you to solicit payment of these debt and you should not continue to pay on those bills. If you have an auto-draft from your bank account you may consider shutting that off. For se cured asetts like cars and mortgages there are very detailed rules regarding this but generally you don't keep making payments on these until the court allows the lender to start asking for the payments. It may be a good idea to keep making those payments to yourself so you'll be able to catch up any arrange that might arise during the process. Again this is a really important area to disucss with a bankruptcy lawyer; In general though you can stop making a good part of your unsecured debt payments before and during the bankruptcy. If you bankruptcy is done right then you wont likely have any further payments on some of those debt again.

Enjoy the day

JOINED AT THE HIP: CO-DEBTOR'S AND BANKRUPTCY

2009-07-08T23:00:51Z

Bankruptcy in Oregon can present a variety of challenges. Clients come in all the time with various issues and no one case is the same. As a bankruptcy attorney its my job to try to sort these issues out and present a clear path for my clients that helps solve their issues and gets them the fresh start they are looking for. One common issue that arises that can put a wrinkle in my clients plans is what to do when a friend or loved one is co-signed on the debt that they are considering discharging in a Chapter 7.

In cases like these there usually isn't a lot of good news to be had. Clients will ask if they can simply remove the co-signed person; whether its on a credit card or more commonly a car loan? The really only effective way to remove a co-debtor is to refinance the debt into one persons name. This would typically present a challenge to a potential client facing a bankruptcy since there credit scores in the first place require a co-signer. Its not likely they'd qualify. If that's the case then you can request a removal from the credit issuer but its unlikely they'd allow it since they have two parties they can go after if the debt is defaulted on. If you cannot remove them then what happens if I file a Chapter 7 bankruptcy?

If you file and discharge the debt the filing person or party can be let off the hook for the debt but the finance company will likely turn around and go after the co-signing party and try to hold them liable for the debt. Obviously this can present a severe financial difficulty for their loved one. This is one reason its really important to take your time in deciding whether a Chapter 7 makes sense in your situation and to seek good legal counsel. Every case is different so please talk to a local bankruptcy attorney in your area.

Enjoy the day

Bankruptcy and Foreclosure: Where will you live?

2009-06-17T03:57:05Z

In Portland the rate of foreclosure sseems to be increasing all the time. Along with this there is a resultant rise in the number of bankruptcy filings I see coming through my law office. In consulting with my clients one worry I find as a lawyer they have is; where will they be able to live after the foreclosure is complete.

Their concern revolves around the issue of having a wrecked credit score and the possible inability to rent another house or apartment for their family. While my evidence in anecdotal at best; what I've seen in the Portland Oregon rental market is that this typically isn't as big a problem as my clients might think. It's true that most landlords, large and small, require a credit check and after a bankruptcy and foreclosure my clients FICO score will probably be down in the low 500's about as bad as it can be. For the large corporation run complexes this will likely disqualify you from renting as they typically run off of formulas and scores and don't look too closely at an individual's story.

If you to a look at smaller places and single owner rentals I've seen the market really open up. If you have a stable job, some decent references and a good story then small mom and pop landlords are likely to rent to you even with a low FICO...i.e. you are not dead in the water from the beginning. What you will need to have in many cases is a larger than normal deposit; I've seen 2x and 3x the normal amount. If you think this situation may apply to you then you should consult with your bankruptcy attorney very early in the process so they can counsel you on the proper way to plan for these requirements and may even have leads to places where their own clients have found success.

Have a joyous day

Chapter 7 Bankrutpcy and your tax refund: What should you know

2009-06-15T21:23:54Z

Its important this time a year to talk about filing your taxes and its possible effect on your bankruptcy. As a Chapter 7 bankruptcy lawyer I see my practice get busy around Feb and March every year and as part of that I also see more issues with clients tax refunds.

In many cases if a client files their bankruptcy petition before the refund has been issued then that refund in its entirety can become property of the bankruptcy estate. If you wait to file your return and haven't filed it before sending in your bankruptcy petition the U.S. Trustee may hold the 341 hearing open until your tax refund has been filed and any refund amount determined. Either way you may loose that refund.

Its very important where you think you may be entitled to a refund to talk with your bankruptcy lawyer before filing and inform them of what your tax status is. There may be legal ways to exempt some of those funds or protect them before filing so you and your family can make use of the money. As always talk to a lawyer first because the law varies in each State and the issues surrounding refunds are complex.

-Be Well

Bankruptcy Filing and Marriage in Oregon: Are we stuck together?

2009-06-04T19:58:10Z

Practicing bankruptcy in Portland Oregon affords me the opportunity to meet lots of interesting characters (clients). One issue I see arise that can cause a lot of emotion and turmoil in a bankruptcy filing is what to do when one spouse wants to file for bankruptcy, usually under Chapter 7, and the other spouse does not. The potential clients come to me and ask, what to do?

The first thing I look at, after looking at conflicts, means test issues and general ability for both of them to file a Chapter 7; is where is the debt. by that I mean who holds the responsibility for the outstanding debt they are trying to discharge? Typically in most married couples the debt is held by both partners in their individual names and they'll tend to have many co-signed accounts. If they typicaly client has maybe 50,000 in unsercured debt I typically see maybe 40% soley in the husbands name, 30% in the wife and the rest joint. When this is the case then typically it wouldn't make a lot of sense to not file jointly and take care of all the debt at one time. Why saddle the other partner with debt that they are both working on paying back outside the bankrutpcy...better for both to start clean together and get that fresh start. What happens with the above ratio is heavily tilted in one spouses direction?

If I see a client that has the huge majority if not all the unsecured debt in their name alone, then it may make sense to leave the non-debted spouse out of the filing and only discharge the debtor spouse; possibliy leaving the other spouse with a better credit score and option should the couple need to take on some type of financing down the road. That said, the bankruptcy code under a Chapter 7 does allow this proceedure and we can carve out one spouse. If you think this might apply to you and something you are considering then I always suggest that you seek the counsel of a bankruptcy attorney in your area and go over all your options. The above is just a very narrow explanation of one part of the law. Please talk to a lawyer directly as each case is unique.

Be well