BANKRUPTCY FAQ

Answers from Our Experienced Bend Lawyers

If you're struggling with debt, you might be considering filing for bankruptcy to get a fresh start. Because this decision can have various impacts on your life, you'll likely have many questions about it. At Baxter Law, LLC, our Oregon bankruptcy lawyers have provided answers to common bankruptcy questions to help you get a better understanding of what's entailed and what you might expect from the process.

What Is Bankruptcy?

Bankruptcy is a legal process that helps individuals and businesses manage outstanding debts. Various types of bankruptcy exist (referred to as Chapters) that provide relief for people in different situations. In some cases, certain debts can be discharged (or wiped away); in others, a payment plan might be devised to take care of debts.

After you file for bankruptcy, an automatic stay will be issued, which prevents some creditors from contacting you or taking legal action against you to collect on debts. This relieves you of some of the stresses you might be under, allowing you to focus on getting things in order for your bankruptcy filing. If the creditor violates the automatic stay, they could face serious consequences.

What's the Difference Between Chapter 7 and Chapter 13 Bankruptcy?

The two most common types of bankruptcy are Chapter 7 and Chapter 13. If you file for Chapter 7, many of your debts are discharged. However, much of your nonexempt property is sold to pay back some of your creditors.

In a Chapter 13 bankruptcy, you'll get to keep your property, but you must arrange a plan to make payments to the creditors you owe money to. The installments are made over a 3- or 5-year period, which depends on how much income you earn.

Will Filing for Bankruptcy Hurt My Credit Score?

After you file for bankruptcy, your credit score may drop. This can make it difficult to qualify for loans or credit cards right away. However, it's important to remember that bankruptcy helps you start over, which means the substantial debt you previously had will be cleared, or you'll be making modified payments on it. As long as you stick to a budget and continue to stay current on any new debts you incur, your credit score will begin rising again.

How Long Will the Bankruptcy Remain on My Credit Report?

Depending on the type of bankruptcy you file for, the information can stay on your credit report for up to 10 years. However, as you continue to make timely payments on your debts, your credit score will start recovering. Thus, although the bankruptcy will be on your report for up to 10 years, you might not feel the effects of it for that long.

Will Filing for Bankruptcy Get Rid of All Debts?

Filing for bankruptcy allows you to discharge or arrange payment plans for some of your debts. However, there are a few that are not eligible to be wiped out. These include:

• Specific taxes
• Property obtained by fraud or under false pretenses
• Child support and alimony
• Certain fines
• Student loans
• Financial obligations arising from willful and malicious injury to others or property

If I File for Bankruptcy, Will I Lose My House?

Whether or not you will lose your home after filing for bankruptcy depends on several factors, such as the type of bankruptcy you're filing for, whether you are current on your mortgage, and how much equity is in your home. It might be possible for you to get an exemption to avoid losing your home. Speak with an Oregon bankruptcy attorney to get a better understanding of your options.

Will I Lose My Car?

Depending on your circumstances, your car might be taken from you when you file for bankruptcy. In a Chapter 7 bankruptcy, you may be required to give up nonexempt property, such as your vehicle, but you might be able to exempt it. If you file for Chapter 13 bankruptcy, you'll get to keep your property while still making payments on it.

Will Filing for Bankruptcy Wipe Out My Back Taxes?

In some cases, certain types of taxes can be cleared in a bankruptcy unless they derived from a willful evasion of payments. Your situation must meet specific criteria for your taxes to be discharged.

Contact Baxter Law, LLC Today

We've answered quite a few questions about bankruptcy. Still, we know you may have others, or you may want further clarification. Our Oregon bankruptcy attorneys are happy to discuss your specific situation and go over your legal options.

Schedule a consultation with our Oregon bankruptcy lawyers by calling (541) 238-9210 or submitting an online contact form today.