How much debt to you need to have to file Bankruptcy?

I get this question a lot - people want to know if there is a minimum amount of debt they need to have in order to file bankruptcy.  My answer is always the same - it's all relative. What I mean is that $10,000 of credit card debt may be enough for one person to file, but not enough for someone else. It all depends on the resources that someone has to get out of debt.

And by resources, I don't just mean income. Sometimes people have assets that they can sell and then go to their creditors with a settlement.  Or, maybe the only debt a person has is so old that the Statute of Limitations has run out and they can't be sued on the debt. In that case, they have legal resources available to avoid bankruptcy to handle their debt.

More often than not the decision to file bankruptcy will boil down to a person's income and expenses though.  If you find yourself able to only pay your basic living expenses off of your net monthly pay and there is nothing left to pay on your debt, it may be time to talk to a bankruptcy attorney. This could be true for someone who makes $30,000 per year, but just as true for someone who makes $150,000 per year. It all depends on their amount of debt, and their monthly living expenses. Thus, the question of how much debt one needs to file bankruptcy is not a clear cut answer - it is relative.

For more Oregon and Washington bankruptcy information, or to learn more about our firm visit www.pacificbankruptcy.com.  We practice Chapter 7 and Chapter 13 consumer bankruptcy and have helped thousands of people realize their dreams of living debt free.

Will I lose my wedding ring when I file bankruptcy?

Most people know that wedding rings, especially with diamonds, can cost thousands of dollars when they are purchased from the jewelry store. But the “value” of the ring on your finger is very different from what you paid to Zales.

When any property is valued for filing a bankruptcy, its current “value” is generally how much the item would sell for in a second-hand market.  For most jewelry items value is set at what a pawn shop would be willing to purchase the item for.  Typically pawn shops will buy jewelry at 10 – 15% of its retail value.  So that $3,000 ring is actually a $300 - $400 ring.

Luckily you can’t put a price on sentimental value, so even though your wedding ring or the ring grandma gave you is invaluable in your eyes, the trustee will not think it has much value unless it is something truly exceptional.  If you truly have a remarkable diamond, let your attorney know so you can discuss options for protecting your property.

For a free consultation to discuss your debt options, call us at 503-352-3690. You may also find information about our firm at www.pacificbankruptcy.com.

Can an Oregon Chapter 13 be switched over to a Chapter 7?

At times when debtors are in Chapter 13 making payments something happens that makes it difficult to maintain their Chapter 13 payments.  If a debtor suffers a loss of income while in an Oregon Chapter 13, or looses their job entirely it may not be enough to just lower their Chapter 13 payments.


Many times the case can be switched from a Chapter 13 to a Chapter 7 to relieve the debtor of the Chapter 13 payments.  In bankruptcy language this is referred to as "converting".  One benefit to converting a Chapter 13 to a Chapter 7 instead of dismissing and refiling a new case is the cost of the filing fee. A Chapter 7 filing fee is currently $299.  The filing fee to convert a Chapter 13 in Oregon to a Chapter 7 is $25.


Typically new schedules and information must be filed in the converted chapter 7 case, so your attorney may charge you legal fees to do the conversion.  But, by converting to Chapter 7 you will relieve yourself of the ongoing monthly payments in your chapter 13.


Not everyone can convert their Chapter 13 to a Chapter 7.  For example, if you have enough income to continue to pay your creditors in Chapter 13, you may be prevented from going to a Chapter 7.  Also, if you are in Chapter 13 because you have had a Chapter 7 filed in the 8 years before the original chapter 13 was filed, you can not convert to a Chapter 7.  


There are other reasons a Debtor in an Oregon Chapter 13 may not want to convert. If you are in Chapter 13, and you are having a tough time making the payments you may want to talk to your bankruptcy attorney about converting to a Chapter 7.


For more Oregon chapter 7 and Oregon Chapter 13 bankruptcy information please visit www.pacificbankruptcy.com.

What documents will my attorney need when I am preparing to file an Oregon Bankruptcy?

If you file for Chapter 7 or Chapter 13 bankruptcy in Oregon the way you present your petition is important if you want your case to proceed as smoothly as possible.  Your debt information, assets, income, expenses and other financial information should be accurate and up to date.

To do this, most attorneys require certain documentation from you. These documents help the attorney make sure that the information that goes into the petition is accurate.

Common documents that may need to be provided to your Oregon bankruptcy are:

1) 7 months of your paystubs, or other income verification;

2) 2-4 years of tax returns;

3) creditor statements;

4) copy of any divorce decree that is in the past 4 years;

5) account information for any stocks, bonds, retirement accounts, etc.

6) paperwork for any lawsuits that you are a party to.

The attorney may also require additional information relevant to your case. For example, if you are a business owner they attorney may need a list of inventory, business tax returns, financial statements, etc.

If you are considering filing a chapter 7 or 13 bankruptcy in Oregon a good rule of thumb is to keep everything. Do not throw away or shred any documents that may be relevant to your financial situation.

For more bankruptcy information feel free to visit our firm.

Can I do a "Means Test" on my own?

The most significant change to the bankruptcy law changes in 2005 was the implementation of what is called the "Means Test".

Broadly speaking the Means Test determines two things: 1) whether a debtor can qualify for Chapter 7 bankruptcy, and 2) if not, how much they will be required to pay to their unsecured creditors in Chapter 13 bankruptcy.

If your gross income is above the median for the state that you file in, you will be subject to the means test.

Just because your gross income is above the median does not mean you don't qualify for Chapter 7. A good number of our clients have gross income above the median for their household size in Oregon and still qualify for Chapter 7 bankruptcy. However, in these cases it is critical that the means test be accurate.

There are several online places that claim to be able to perform the means test. In my experience clients who attempt to do their own means test do not do it correctly. The means test formula is extremely complicated, and there can be variances in how your local jurisdiction interprets the means test. In my opinion it is worth having an experienced bankruptcy attorney do the initial means test formula to determine your eligibility.

If a client is on the border for qualifying for Chapter 7 our firm performs an initial means test for an affordable fee, and can then discuss the client's options based on the result of the means test. Many of our clients start with this, and then proceed to file Chapter 7, or Chapter 13 bankruptcy.

If you would like more information about our consumer bankruptcy firm visit www.pacificbankruptcy.com.

When you are preparing to file bankruptcy HONESTY is the best policy.

If you meet with an attorney to discuss your debt relief options, including filing for bankruptcy the worst thing you can do is not tell the attorney the whole truth. Hiding assets, failing to disclose transfers, under-reporting your income and other falsifications can not only put your fresh start at risk, it is also a crime. When you file a bankruptcy case the petition and schedules are signed under the penalty of perjury. So, if they aren't accurate you are essentially lying to the Federal Court - not good.

The more information the bankruptcy attorney has from the start, the better the attorney will be able to help you. Most situations that a client thinks is bad, and is scared to tell their attorney about are not a big deal as long as the attorney has the information. Once the attorney has the information they can help the client find a solution that works. I once had a Chapter 7 client who told me they lived in a manufactured home as a renter and had no ownership interest. Before filing the case a routine property search was done and it turned out the client was on the title as an owner of the manufactured home. I asked the client why they didn't tell me about that and the client told me they were afraid they would lose it in the bankruptcy. The home was 100% exempt, which means there was no chance of the home being liquidated or affected in bankruptcy. I explained this to the client, discussed why it needs to be disclosed and made sure the client understood the implications of not properly disclosing everything. The Chapter 7 case was filed, the home was protected and the client got their discharge and fresh start. Basically, everything was good and the client was debt free. Had the client's case been filed without disclosing the protected asset there could have been a disastrous outcome, including losing the discharge and possible criminal sanctions.

So, remember - your bankruptcy attorney can only help you if they have all of the relevant information from you. When they ask you questions, listen carefully and answer honestly. If you have a doubt whether the attorney needs a certain piece of information just tell the attorney. An experienced bankruptcy attorney will be able to tell you whether it is an issue or not. If it is an issue there may be a solution. But, the attorney can't find a solution unless they have all of the information.

For more bankruptcy information visit ww.pacificbankruptcy.com. Our firm is devoted 100% to helping individuals file cases under Chapter 7 and Chapter 13.

How do you find a Chapter 7 or Chapter 13 bankruptcy attorney in Oregon?

Many people know that it may be a good idea to speak to an attorney regarding their debt relief options, including bankruptcy but don't know where to start. There are a lot of good attorneys out there, but you will want to find one that can help your specific situation and has experience in the matter that you want resolved.

Here are some ideas on how you can go about finding an attorney to help with a bankruptcy:

Ask family or friends for a bankruptcy attorney referral. If you know someone who has filed bankruptcy in Oregon ask them about their experience with their attorney. Hopefully they had a good experience and can recommend their attorney to handle your case.

Ask a family member or friend if they know any other attorneys that do other areas of the law. Often times good attorneys are networked with other attorneys in specific areas. So, if your family had a good business or family law attorney maybe that attorney can point you in the right direction to a good bankruptcy attorney in your area.

Do some online research. Many attorneys can be found on the internet and have bankruptcy related material on their websites. Lots of attorneys post bio's on their sites so you can get a feel for the attorney's experience, etc.

Check with your employer. Some larger employers have referral programs for employees who need legal assistance and may be able to provide a referral for you.

Check with the Oregon State Bar. The Oregon State Bar has an attorney referral program, so you can contact the bar to explain your situation and get a referral that way. The Oregon State Bar is found online at www.osbar.org.

Once you have found an attorney who can help with your specific problem you will want to schedule a consultation with the attorney to go over your specific issues and legal problems. Many times you will know by meeting with an attorney if you will feel comfortable working with this attorney on your bankruptcy matter. If you don't, you may want to look for another attorney or two to get a second or third opinion.

For more information about our bankruptcy firm, visit our website at www.pacificbankruptcy.com We offer free initial consultations and practice exclusively in the area of Chapter 7 and Chapter 13 consumer bankruptcy.