Bankruptcy is a legal process allowing an individual or business to have some or all of their debt excused. It is almost always considered as a last resort because it can have some negative long-term consequences which must be considered, even if you eventually decide that they are outweighed by the benefits. Bankruptcy is controlled by federal law and handled in federal courts, so the procedural and substantive rules involved in Oregon are often the identical as everywhere else in the U.S. However, individual bankruptcy courts have slightly different rules for items such as exemptions, so it would be a good idea to consult with a local Mcminnville, Oregon bankruptcy attorney beforehand.
Chapter 7 Bankruptcy in Mcminnville, Oregon
In Mcminnville, Oregon, there are 2 commonly-used types of consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 states that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many forms of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is absolved. However, some forms of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Mcminnville, Oregon is not dischargeable, you may want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Mcminnville, Oregon
Chapter 13 Bankruptcy in Mcminnville, Oregon is very different from Chapter 7. Whether or not it is a better option is very dependent on the facts of each distinct case. Chapter 13 does not absolve any debt, but it creates a new payment plan that should give the debtor some breathing room. Typically, all of the debts are consolidated into 1 periodic payment. While this may make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Mcminnville, Oregon
Chapter 13 is typically a good option for people who have a stable income, and a large amount of non-exempt property that they can't part with. On the other hand, if most of the debtor's property is exempt, and he or she does not have a stable income, Chapter 7 might be more beneficial.
Regardless of your situation, you should speak with an attorney in Mcminnville, Oregon who is accomplished in bankruptcy before making a decision. They will be able to advise you of your options, and the likely results of each one, allowing you to make a much more informed decision.