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What You Need to Know About Consumer Bankruptcy

Lyndon Ruhnke, P.C.  Feb. 27, 2024

When it comes to deciding whether or not to file bankruptcy, there is a lot that you need to consider. Since most of us never actually plan to file for bankruptcy, it can come as a shock when you have to weigh the decision.

Things like unexpected job loss, medical emergencies, divorce, and other major life changes can quickly alter our plans and create overwhelming financial stress. Even a series of smaller financial losses can add up over time, leading to a level of debt that simply becomes insurmountable.

It's during these times that having a trusted and experienced consumer bankruptcy attorney working for you can make all the difference in the world. Over the years, I've learned that helping people understand bankruptcy law and how it relates to their personal situation can serve as a major relief to their financial struggles.

Most people are surprised to learn how helpful filing for bankruptcy can be when it comes to helping you manage your debt and crafting a solution to help you repay what you owe. That's why it's not only important to work with an experienced consumer bankruptcy attorney but to also understand some of the basic principles of bankruptcy and how they relate to you and your situation.

What Should I Know About
Filing for Consumer Bankruptcy?

Deciding to file bankruptcy is a serious decision, most people never plan to file bankruptcy. They work hard and pay their bills, but an unexpected loss of employment, medical emergency, or divorce can cause a financial disaster.

Often, many small things over time will lead to a situation where the debt is simply too large to handle. The stress of financial problems can lead to serious health and relationship problems, but filing for bankruptcy can help.

We specialize in consumer, Chapter 7, and Chapter 13 bankruptcies. Consumer bankruptcy allows individuals to discharge all or most of their debts and stop foreclosures, the garnishments of wages and bank accounts, vehicle repossessions, and harassing phone calls from debt collectors. In some cases, bankruptcy can even eliminate back taxes.

What Should I Know
About Chapter 7 Bankruptcy?

Filing for Chapter 7 bankruptcy will, in essence, allow you to wipe out your debts and provide you with a fresh start. Chapter 7 bankruptcy serves as a liquidation process where a trustee will collect all of your assets that are not listed as exempt assets. The trustee will then sell these assets and use the proceeds to pay your creditors, with a small commission taken by the trustee who oversees the distribution.

The vast majority of Chapter 7 bankruptcies are no-asset bankruptcies. A no-asset bankruptcy is where there are no non-exempt assets at stake and the only cost to you to get immediate debt relief will be attorney fees and a filing fee.

It's important to remember that certain debts cannot be discharged through Chapter 7 bankruptcy, such as alimony and child support payments, student loans, and fraudulent debts. In most cases, filing for Chapter 7 bankruptcy will eliminate all other debts, providing the debtor with a clean financial slate.

What Should I Know
About Chapter 13 Bankruptcy?

When filing for Chapter 13 bankruptcy, a debtor will propose a three to five-year repayment plan to all creditors offering to pay off all or part of the debts from the debtor's future income. Typically, individuals will choose Chapter 13 to prevent a house foreclosure, pay back missed car or mortgage payments, or prevent other valuable non-exempt property from being seized.

If you can follow the terms of your repayment agreement, all of your remaining dischargeable debt will be released at the end of the plan.

Other stipulations must also be met to file for Chapter 13 bankruptcy. Among them is the requirement of a regular source of income and some amount of disposable income that can be applied to your repayment plan.

Consumer Bankruptcy Attorney Serving Portland, Oregon

Deciding to file for bankruptcy is not a decision that should be made lightly. There is a lot to consider about your financial future. Lyndon Ruhnke P.C. has helped clients throughout Northern Oregon with consumer bankruptcy issues to ensure their future is in safe hands. If you need reliable legal help, call Lyndon Ruhnke P.C. today