The biggest difference in the bankruptcy codes from state to state are the exemption schedules, which can vary greatly depending on where the person filing for bankruptcy is located at within the country. According to Alexz Adams of the Law Offices of Alexzander C. J. Adams, P. C, a bankruptcy lawyer in Portland, Oregon, the state’s generous bankruptcy exemptions allow Oregonians to protect certain assets that people are not allowed to keep elsewhere.
Likewise, certain states allow people filing for bankruptcy to keep specific assets that Oregon citizens cannot. Nonetheless, it is important that people are fully aware that they may not be able to take all of the same exemptions as friends who file for bankruptcy in neighboring states.
In Oregon, filing for bankruptcy can allow people to strip away unsecured second mortgages, prevent foreclosure, and postpone or stop wage garnishments altogether. These are all major benefits to filing for bankruptcy, and they are all things that most people don’t automatically think of when they think about bankruptcy.
As a bankruptcy lawyer in Portland, Adams advises clients to consider the state exemption schedule when looking for clues as to what assets they will and will not be allowed to keep. Oregon is unique in that the state does not allow bankruptcy filers to use the federal exemptions, which means that people must use the state exemptions instead. This can be a pro or a con depending on the exemption, since some of Oregon’s exemptions are higher than the federal levels and some are lower.
Adams explains that the process of going through bankruptcy is not like what is seen on most TV shows, where they show a family packing up its house and selling everything. The Oregon government and state courts realize that people who file for bankruptcy still need to have enough assets to live on, such as clothes and basic furniture, which is why they allow for certain exemptions that help people keep their most important possessions.
Oregon’s requirement that bankruptcy filers use only state exemptions rather than federal exemptions differs from many other states that give people a choice in deciding which exemptions work better for them. As far as the state’s exemptions are concerned, Adams says that the most important exemption is the homestead exemption, which in Oregon is fairly low. Specifically, the Oregon homestead exemption is $40,000 or $50,000, depending on whether the person filing is married or not. Oregon’s vehicle exemption is also fairly low, according to Adams, topping out at $3,000 per debtor, per car.
Anyone filing for bankruptcy who owns a house with over $40,000 or $50,000 of equity in it may, depending on the circumstances, be forced to liquidate the home to pay debts on the estate. Or, in other cases, a debtor may be forced to essentially pay into the estate to buy back the non-exempt amount. That is a big issue for people, and Adams says that Oregon’s lower-than-average homestead exemption makes this an especially troublesome situation for people in his state.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
