If you cannot pay your debts, are receiving calls from bill collectors, suffering garnishments or are dealing with a lawsuit, bankruptcy may help you. The major purpose of bankruptcy is to give the financially distressed person a fresh financial start. Filing bankruptcy can result in a discharge or a restructuring of your debts. However, careful consideration and planning should be given before filing for bankruptcy.
Chapter 7 is the most common type of bankruptcy. A Chapter 7 results in the liquidation of non-exempt property for payment to creditors. The property a Chapter 7 debtor is allowed to keep is called “Exempt Property” and determined by either State or Federal Law.
The principal result of a Chapter 7 is the discharge of most debts. Some debts such as child support and some taxes may not be discharged. When to file a Chapter 7 and which exemptions to claim are important questions that should be discussed with an attorney. A Chapter 7 bankruptcy generally takes about 3 months to complete after filing. A person may only file a Chapter 7 once every eight years.
Chapter 13 is a type of bankruptcy used to reorganize debts. Chapter 13 requires a regular income source. The debtor must submit a plan and commit a portion of this income for payment of part or all of his or her debts. How much must be paid under the plan and how much each debtor receives usually depends upon your assets, your income and the type of debts you have. Chapter 13 bankruptcies generally take 3-5 years to complete.
More information is provided by the Oregon State Bar and the Oregon Bankruptcy Court.
