Women looking over bills

Preparing for Bankruptcy

Lyndon Ruhnke, PC Sept. 28, 2021

According to statistics from The American Bankruptcy Institute, there were 6,636 total business and non-business bankruptcy filings in the state of Oregon in 2020. When facing financial adversity, filing for bankruptcy may be a possible solution to achieve debt relief and remedy your financial situation. However, with lots of false assumptions and misinformation out there, getting proper guidance from an experienced Oregon consumer bankruptcy attorney is crucial to help navigate key decisions and avoid costly mistakes.

With nearly 20 years of experience, Lyndon Ruhnke has devoted his career to assisting and guiding clients through complicated bankruptcy proceedings. He is available to discuss your personal financial situation and enlighten you about your available bankruptcy options. Lyndon Ruhnke will educate you about actions to take prior to filing, guide you through the bankruptcy filing process from start to finish, and help you achieve your deserved financial relief. With offices in Gresham, Beaverton, and Portland, Oregon, the firm is proud to serve clients throughout the Northern Oregon area.

What to Do to Prepare for Filing Bankruptcy

If you have decided to file for bankruptcy, understanding what to do prior to filing is important to make your bankruptcy proceedings more manageable. Here are some steps to take when preparing for bankruptcy:

Gather Your Financial Documents. Gather necessary financial documents, including copies of proof of your income for the past six months, tax returns for the last two years, bank statements, credit reports, and information about ongoing litigation against you.

File Required Tax Returns. Not all debts can be eliminated by filing for bankruptcy. You will still be required to pay your taxes. Especially if you are petitioning for Chapter 13 bankruptcy, completing your bankruptcy paperwork requires your tax returns.

Pay Off Necessary Bills. Continue paying for essential living expenses and bills, such as your utility and electricity bills, mortgage, and car payments. Being behind on these necessary bills can make your bankruptcy filing more complex.

Stop Automatic Payments. Cancel all automatic payments to your bank account, credit cards, as well as post-dated checks. Stopping all automatic payments will help ensure that you are not short on funds to pay for your basic needs.

Document Debt Information Honestly and Thoroughly. The bankruptcy process requires complete honesty. When thinking about filing, you must be totally honest about your assets, income, and debts. Therefore, make sure that you document your debt information accurately.

Complete Your Credit Counseling Course. Take your credit counseling course and debtor education course from an approved agency before filing. Both courses can be taken online or over the phone. You are required to complete these courses before you can petition for bankruptcy.

What Not to Do Prior to Filing

If you're considering filing a bankruptcy petition in Oregon, here are some actions to avoid prior to filing:

Don't Pay Debts That Would Be Dischargeable. Dischargeable debts are debts that can be eliminated after filing for bankruptcy. Such debts include credit card debt, medical bills, personal loans, and other unsecured debt. There is no need to pay these debts since they would be discharged once you file for bankruptcy.

Don't List Assets That Will Be Protected. Bankruptcy law allows you to keep your exempt assets when you file. These include your primary car, primary home, clothing, and household furnishings. These assets will be protected, so there is no need to list them when you file.

Don't Wait Until a Creditor Has Won a Judgment. When a creditor sues you and wins, the court will issue a money judgment against you. Hence, do not wait until the creditor has won a judgment before your file for bankruptcy.

Don't Use Retirement Accounts to Pay Debts. Withdrawing money from retirement accounts to offset credit card debt has major drawbacks, including penalties and taxes. Also, you will be left with less money for retirement. Even after filing for bankruptcy, you can still protect most of your retirement funds.

Don't Acquire New Debt. Avoid acquiring new debt between 70 and 90 days prior to filing for bankruptcy. The creditor may object to your bankruptcy discharge by filing an "adversary proceeding." Also, the creditor may argue that you got the loan without intending to pay it back.

Don't Move Assets (Transfer Funds or Property). Do not hide, sell, or transfer assets to friends or close relatives for safekeeping prior to filing for bankruptcy. This is considered an offense and may lead to your bankruptcy discharge being denied.

How Legal Counsel Can Help

Filing for bankruptcy in Oregon involves a lot of complex processes. Understanding your available bankruptcy options, the eligibility requirements, and navigating the entire bankruptcy process requires comprehensive guidance. Therefore, when thinking about filing for bankruptcy, consulting with a knowledgeable bankruptcy attorney is crucial to evaluate your possible legal options and determine the right bankruptcy chapter that suits your financial situation.

Lyndon Ruhnke is committed to offering outstanding legal services and brilliant advocacy to clients in bankruptcy-related matters. As your legal counsel, he can:

  • Assess your unique financial situation

  • Educate you about your available bankruptcy options

  • Help determine the right bankruptcy for you

  • Enlighten you about what to do and what to avoid before filing

  • Gather necessary documentation and file forms

  • Attend bankruptcy court hearings with you

  • Handle correspondence between you, your creditors, and court-appointed trustees

  • Outline an effective strategy to protect your assets and financial future

Using his extensive experience, he can guide you through every step of your bankruptcy proceedings and help you navigate key decisions.

Contact Lyndon Ruhnke, P.C. today to schedule a simple case assessment with an experienced consumer bankruptcy attorney. Lyndon Ruhnke can offer you the comprehensive legal counsel, reliable advocacy, and support you need in your bankruptcy case and help you make informed financial decisions moving forward. The firm proudly serves clients throughout Gresham, Beaverton, and Portland, Oregon.