Oregon Bankruptcy Lawyer Blog

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.

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.

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.

Continue reading "HOUSEHOLD BILL PAYMENT WHEN YOU HAVE FILED A BANKRUPTCY IN OREGON" »

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

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

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

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

I hear a lot of questions as a bankruptcy lawyer in Portland Oregon...One of the most common questions I hear when I meet with prospective clients is "when will I be able to borrow again?". Its actually a reasonable question and I understand why people ask; but after being in this practice as long as I have been the answer to me is pretty obvious...Who Cares!

Its not that its a bad question...but our culture has conditioned us so much to rely on and base our worth on what we can borrow that it frustrating for me to hear folks who are in debt trouble asking when they can take more debt. I find that its my job as a lawyer and counseling to help my clients understand that the better question is: "After this bankruptcy will I need credit again?". The answer to that is probably not.

Continue reading "Post Bankruptcy and New Credit: Do you really need to ask?" »

One of the most common questions I hear in my bankruptcy practice is "will I have to give up my car"; to which I respond with the most common lawyer answer "it depends". It will depend on which Chapter your file, Chapter 7 or Chapter 13. It will depend on how much the car is worth on the open market. It will also depend on how much you owe on the car. I'll try today to shed a little light on the basics so you understand how the bankruptcy court will view your vehicle if you choose to file.
Basically under a Chapter 7 (the more common filing) the key to keeping your car is value..i.e. how much is the car worth. In Oregon bankruptcy court a single person can have a car that's 'worth' a little over two thousand dollars. "What's my car worth" you ask? Good question. The trustee's can use a number of valuation methods. Most common that I see here in the Portland Oregon meetings are either kelly blue book or NADA guides. These give a decent valuation for most vehicles; you can also use black book value which is a compilation of local auction values..I like using this in my practice because I feel it gives the best true value for the car in the current marketplace. So once you have your value then what?

Continue reading "Bankruptcy and your car: Will you need to ride a bike? " »

In a Chapter 7 bankruptcy it is possible that the trustee will seize and sell your home to pay off part or all of your creditors. As a bankruptcy attorney in Portland Oregon its my job to make sure my clients understand if this is a possibility before any filing is made and to do whatever the bankruptcy code allows to protect your home.

My clients homes are probably the number one asset they are worried about protecting. The key to seeing if your home will be protected and not subject to being turned over to the trustee comes down to value. Much like cars; if there is equity in the home than its possible that it will go. How much equity are you allowed depends on a variety of factors that you should discuss directly with your bankruptcy attorney.
In general however for a single person you can retain a home that has about 30,000 is equity value after subtracting reasonable sale costs and expenses. If you are married the amount runs up to about 36,000. If you are under this exemption amount then you should be able to keep your home as long as you continue to make your payments.

If you are over then you should discuss this situation directly with a lawyer; as there are methods to retain the home. You may have to pay the trustee some money but you could stay in your home. Obviously in today's market it may make sense to turn the home over and let it go into foreclosure and these should also be discussed with your bankruptcy attorney directly.
To recap though; for most of my bankruptcy clients I find that showing that their home has little to no equity is not a problem and hence if they are able to meet the payment obligations of the mortgage they will be able to stay in their home during and after the bankruptcy proceedings.

Have a great day-