In these difficult times, many people are considering filing for bankruptcy to find relief from unrelenting debt. Chapter 7 bankruptcy is right for many people, allowing the debtor to liquidate some personal property to pay outstanding balances, erase many consumer debts, and protect most personal property. Not all consumer debt can be erased, including tax debts, spousal and child support payments, and most student loans.
However, there are federal and state exemptions which apply to Chapter 7 bankruptcy petitions, allowing debtors to protect much or all of their personal property. In the state of Oregon, state exemptions take precedence.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption – $3,225
- Oregon state exemption – up to $2,150
In addition, if the car retains an outstanding auto loan that is secured by that vehicle, the debtor must continue to make payments or the lien holder may repossess the property, even if bankruptcy has erased the debt from the consumer’s credit record.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Oregon state exemption – $30,000 for an individual, $39,600 for joint filers
- Property must be the residence of the owner, or their immediate family
- Mobile home and lot – up to $23,000 (or $30,000 for joint owners) in lieu of homestead
- Mobile home without lot – up to $20,000 (or $27,000 for more than one debtor) in lieu of homestead
- Property may not exceed 1 block within city or town limits, or 160 acres elsewhere
- Sale proceeds exempt 1 year if to be used to purchase another home
- Unlimited property of a soldier or sailor during time of war
For any property that is under mortgage and secured by that property, the homeowner must continue to make payments as agreed or face foreclosure by the lien holder.
Oregon allows exemptions for other forms of personal property:
- Clothing, jewelry, and personal items – up to $1,800 total
- Household items, utensils, furniture, TVs and radios – up to $3,000 total
- Health aids
- Books, pictures, and musical instruments – up to $600 total
- Food and fuel to last 60 days - up to $1,000
- Pistol, rifle, or shotgun owned by someone over 16 – up to $1,000
- Burial plot
- Building materials to be used in building improvements
- Any personal property not already covered – up to $400
- Tools of the trade – tools, team with food to last 60 days, or library – up to $3,000 total
Filing Schedule C of a Bankruptcy Petition
Any state property exemptions that the debtor wishes to claim in their bankruptcy petition must be listed in a Schedule C attachment including these details:
- The property being claimed
- The Oregon statutes substantiating the claims
- The property exemption value for each
- Each claim’s current assessed value (not the market value)
Always Talk to a Local Bankruptcy Lawyer First
Many wonder if bankruptcy is the right choice for them, and if so, which type of bankruptcy provides the most protection. Those are difficult questions that often only a bankruptcy attorney can thoroughly answer, based on specific information from their client, and provide the maximum benefit.
