Legal Question in Bankruptcy in Oregon

Re: Personal property

I am not licensed in Oregon, so can only give you general advice. There are two forms of bankruptcy for you to consider. Chapter 7 is liquidation, meaning that you have no excess assets or income to pay creditors. Chapter 13 (wage earner) is where you don't have enough to pay your bills, but can still pay something under a plan you submit and get approved by the court. In Chapter 13 you can keep most if not all of your assets as long as you pay for them. Note that there are two kinds of debt, secured (i.e., you car secures the car loan) and unsecured (medical bills, credit cards). Under Chapter 13 you can keep secured assets as long as you pay for them, while you discount the amount of money you pay for unsecured creditors.

In a Chapter 7 you are allowed to claim certain exemptions in your property. Each state can elect to establish their own schedule or opt for a federal schedule. I don't know what Oregon has done. Generally most states have a better schedule of exemptions than the federal. You are entitled to keep a certain dollar amount of equity in your vehicle or vehicles - usually up to about $1500-2000, or more in some circumstances (car is required for employment). If you have more equity than the exemption amount, you must either pay that into the court, or risk losing the car which would be sold by the court so that the excess equity could be paid to the unsecured creditors after the loan is paid off. In some cases, there is not enough equity to justify siezing the car and selling it at an auction - the court does not hassle with retail sales, it generally sells the cars to wholesalers. So if you don't have a fair amount of equity the court would probably abandon any interest in your car. But remember, you must still pay the car loan and keep it current. If it is not current then the lender can get the car.

Before jumping into bankruptcy go talk to Consumer Credit Counseling. They ofttimes can help you avoid bankruptcy, and if not, they will get you better educated about your finances which will prepare you better for the inevitable.