September 26

Filing a Chapter 13 Bankruptcy

Filing  a Chapter 13 BankruptcyFiling a Chapter 13 Bankruptcy means that a debtor (the person who filed the bankruptcy) makes payments to the court for a certain period of time, after which dischargeable debts are forgiven and the bankruptcy ends.  Here are few things to keep in mind as you explore whether it is right for you.

The Plan:

The plan is an agreement with the court to pay a certain amount of money over a certain period of time. This money is paid monthly from wages and annually from tax returns and bonuses. In return the debtor is able to eliminate some debt and control the repayment of other debts. The debtor and creditors must follow exactly what it says in the plan, if either said fails to comply they may be punished by the court.

Duration:

Your plan will either last a minimum of 36 or 60 months depending on the result of the Chapter 13 Statement of Current Monthly Income and Means Test Calculation. A plan may be extended from 36 to 60 months, but it may not extend past 60 months.

Some Benefits to Filing a Chapter 13 Bankruptcy:

A debtor is able to catch up on back mortgage, car, or child support payments in order to keep their house or license. In some situations a debtor may eliminate a 2nd mortgage or reduce the price they pay for their vehicle. Although taxes and student loans may not go away, filing a chapter 13 bankruptcy can help in repaying them.

Some Risks to Filing a Chapter 13 Bankruptcy:

Filing a chapter 13 bankruptcy is a lot easier than finishing one. There are a lot of changes that can occur over 3-5 years and this can impact a debtor’s ability to fulfill their obligations to the court. As circumstances change for the better, the court may require more money to be paid which can result in a case being dismissed if the debtor does not comply.

There is a lot that can be accomplished in a Chapter 13 bankruptcy. Oregon residents considering filing bankruptcy should contact us for a free consultation to explore it further.

September 24

Filing Chapter 7 Bankruptcy

Filing Chapter 7 BankruptcyFiling a chapter 7 bankruptcy is a major step.  These are three major factors in determining whether filing a chapter 7 bankruptcy is right for you.

ELIGIBLITY TO FILE CHAPTER 7 BANKRUPTCY?

Residency:

You must have been domiciled or had a residence, principal place of business, or principal assets in your district for the greater part of preceding 180 days of the date that you file bankruptcy.

Qualifying under the Chapter 7 Statement of Current Monthly Income and Means Test Calculation:

This calculation compares your pre-filing income to the median income of a household of your size to determine whether you are eligible to file. For the purposes of this calculation your last six months of full income will be doubled to create an annual average. Even if your income appears to be too high, it is possible that you could still qualify. Contact us to help you know for sure.

Post-filing income:

Your post-filing income can’t be too much greater than your qualified post-filing expenses. If your Schedule I is much larger than your Schedule J than the Trustee may want you to file a Chapter 13 Bankruptcy.

WHERE IS THE ADVANTAGE IN FILING CHAPTER 7 BANKRUPTCY?

Filing chapter 7 Bankruptcy Oregon

Filing a chapter 7 bankruptcy should create an advantage:

If filing bankruptcy isn’t going to improve your life in some way than it doesn’t make sense to file.

Protect your assets:

Your possessions are protected in bankruptcy by exemptions, but sometimes those exemptions are not enough. It is important that you know what may be lost in a bankruptcy before filing.

IS THIS THE RIGHT TIME TO FILE A CHAPTER 7 BANKRUPTCY?

Is there a risk of new debt:

It is fraudulent to incur debt in anticipation of bankruptcy, but it is foolish to file bankruptcy when at serious risk of medical debt that you won’t be able to pay. It may be better to wait for a situation to resolve itself before obtaining your fresh start.

Can you afford to wait:

One risk to waiting to file chapter 7 bankruptcy is that your situation could change such that you are no longer eligible to file.
There are other questions to ask yourself if you are contemplating filing a chapter 7 bankruptcy, but this is a good place to start. Oregon residents considering filing bankruptcy can give us a call at 503 741-9529 for a free consultation to explore it further.

August 6

Stop a Garnishment with Bankruptcy

Stop a Garnishment

Being Garnished:

The two most common ways of being garnished are from bank accounts and wages.

Wages-If your wages were garnished within the 90 days prior to filing bankruptcy you may get them returned.  If you were garnished, consult a bankruptcy attorney as soon as possible.  Otherwise there is no recourse unless the underlying garnishment is bad.

Bank Account-Depending on the source of the money in the bank account, it may be protected.  Everyone who is garnished should receive a challenge to garnishment form, to dispute illegal garnishment.

Here is a link to Oregon’s model garnishment forms.

How Bankruptcy can stop a garnishment:

Filing bankruptcy almost always stops a garnishment!  How it handles the debt and what type of bankruptcy is necessary depends on the type of debt.

Bankruptcy will stop garnishment for a credit or medical debt and get rid of the debt.

Bankruptcy won’t stop a support obligation, such as child support.  A Chapter 13 bankruptcy may allow you to catch up on back payments and get rid of other debt making it easier to pay.

Bankruptcy will stop a garnishment for taxes and may discharge them.  Tax debt involves many factors.  Bankruptcy can play a key role in handling and eliminating tax debt.

Money owed to unemployment, restitution, etc. will need to be paid.  Bankruptcy may temporarily stop or modify the garnishment, but ultimately the debt remains.

Why Use Bankruptcy to Stop a Garnishment:

If you were garnished within the 90 days prior to filing the bankruptcy, then you may get you your money back!

Bankruptcy can be the best way handle tax debt.  It stops  garnishment by the Internal Revenue Service or Oregon Department of Revenue, then you can eliminate the debt or negotiate a payment plan.

Using a bankruptcy to stop a garnishment and get rid of other debt can allow you to catch up on child support or mortgage payments.

Bankruptcy stops the garnishment and in many cases eliminates the debt.

December 13

Should I File Bankruptcy?

Every individual situation is unique, so the descriptions and information provided here should not be construed as legal advice.  Anyone contemplating filing bankruptcy should speak with an attorney familiar with their state and its laws.  Oregon residents are encouraged to contact me at noah@bishopbankruptcylaw.com.

Bankruptcy was designed to provide each debtor with a fresh start, but the source of the debt, and the situation surrounding the debtor while they incurred the debt, will determine if it can be discharged in bankruptcy.  Debts are either dischargeable (e.g. an old credit card bill), non-dischargeable (e.g. child support), or quasi-dischargeable (e.g. some taxes may be discharged while others can’t).  When a debt is discharged in bankruptcy, the person who filed is no longer personally liable for the debt and a creditor may not attempt to collect that debt from them.

Here is a non-exhaustive list of how some of these debts are treated in bankruptcy.

Medical Debt:  With skyrocketing health care costs and a difficult economy, many people are faced with mounting medical costs.  These debts are generally dischargeable in bankruptcy if they were incurred prior to the date of filing.  Medical debts incurred after filing are not dischargeable nor are elective surgeries that were obtained with the intent to file bankruptcy on the resulting debt.

Credit Card Debt:  Past credit card debt is generally considered dischargeable, provided that charges weren’t run up in anticipation of bankruptcy.  It is best not to use your credit card once you think that you may have to file bankruptcy.  Exceptions may be made for life necessities, but it is best to talk with an attorney if that may be an issue.

Deficiency Judgments from Repossession or Foreclosure:  Deficiency judgments are dischargeable in bankruptcy provided there was no fraud involved.  For many debtors, bankruptcy is the only solution when a creditor has repossessed their vehicle or foreclosed on their house and then tries to collect the difference between what was owed and what was received at sale.

Unemployment:  Debts owed to the unemployment office are non-dischargeable debts owed to a government entity.

Student Loans:  Although there are unique instances where student loans have been discharged in a bankruptcy, these are the rare exceptions to the rule that student loans are not dischargeable in bankruptcy.

Domestic Support Obligations:  In a Chapter 7, all domestic support obligations are non-dischargeable.  In a Chapter 13 some obligations may be dischargeable (but never child support).