It is best to file your case before a wage garnishment starts, but you can stop an ongoing wage garnishment by filing a bankruptcy case.

In most chapter 7 cases, you are required to pay a flat fee for basic services before the case is filed with the court. Cascade Bankruptcy offers convenient payment plans based on what you can afford to allow you to pay the fees while referring creditors to our office.  This will prevent your creditors from harassing you by phone while you are preparing to file your case.

If you are filing chapter 13, Cascade Bankruptcy typically allows you to file after simply signing a fee agreement and paying an initial $100 retainer and the Court’s filing fee of $274. The remaining fees are paid over time from your chapter 13 plan payments.

Filing fees are typically paid before the case is filed. The Bankruptcy Court publishes a list of fees on their website.

If your vehicle is worth more than the Oregon bankruptcy exemptions allow, there are some bankruptcy options you may want to consider.  In some cases, you can enter into an agreement with a bankruptcy trustee to allow you to make payments in order to keep your vehicle.  In other cases, you may consider filing a Chapter 13 bankruptcy case.  In a Chapter 13 bankruptcy case, you are allowed between 3 and 5 years to pay a portion of your unsecured debts in exchange for being permitted to keep your vehicle and your other valuable belongings.

It is never a good idea to give away a vehicle or to sell it for less than it is worth before filing a bankruptcy case.  If you do so, you risk losing the vehicle and possibly the opportunity to discharge your debts in bankruptcy.

The bottom line is that when you have something valuable like a vehicle that you need to keep and you need bankruptcy to relieve you of your debt obligations, it is important to consult a bankruptcy attorney to discuss your options.

A reaffirmation agreement is a new contract between a creditor and debtor in bankruptcy in which the debtor agrees to remain personally liable on a secured loan and the creditor agrees to not repossess the property so long as the debtor remains current on the payments.  Entering into a reaffirmation agreement is usually only done in a Chapter 7 bankruptcy.  The reaffirmation agreement must be executed before the bankruptcy discharge is entered.  The debtor can rescind the agreement within 60 days after the agreement is entered or the discharge order is entered, whichever occurs later.

Reaffirmation agreements should not be entered into without serious consideration.  If you sign a reaffirmation agreement and later default on the loan, the lender has the right to repossess the vehicle and sue you for any deficiency balance.  Imagine a scenario in which you reaffirm a loan on an older, high mileage vehicle, and the vehicle later breaks down and cannot be easily repaired.  If you stop making payments on the loan, you will remain liable for the loan, even though the vehicle is not driveable and has little value.  This is one example of a scenario in which signing a reaffirmation agreement is probably not the best option.

If you decide to sign a reaffirmation agreement, there are some things you should know.  First, the Bankruptcy Code requires that the agreement contain many disclosures concerning the contract terms.  It is important that you review the terms carefully and understand what you are agreeing to.  Second, you will be required to file a statement of current income and expenses.  If your income after expenses is not enough to pay the monthly loan, the court may require that you appear at a hearing and may ultimately decide not to approve the reaffirmation agreement.

If your attorney agrees to sign the reaffirmation, the attorney must certify to the bankruptcy court that you were advised of the legal effect and consequences of the reaffirmation agreement, and that the reaffirmed debt will not create an undue hardship for you or your family.  In many cases, bankruptcy lawyers are unwilling to sign reaffirmation agreements because of the potential that signing a reaffirmation agreement may cause an undue hardship.  Third, because reaffirmation agreements are new contracts, the lender may be willing to alter the terms of the original agreement. This could mean a reduction of principal, interest, or a change in payment length in order to make the monthly payments more affordable.  Remember, because signing a reaffirmation agreement is voluntary and because many creditors are not anxious to repossess the property, you may have more leverage in bankruptcy to negotiate a better deal with the creditor.

Where chapter 7 is not an option because of eligibility or risk of liquidation of assets, chapter 13 can be a good alternative. Chapter 13 is a three to five year reorganization plan that allows you to propose a plan to repay some of your debts according to your ability to pay. The plan allows you to prioritize certain debts like mortgage arrears, vehicle loans, back taxes and support obligations while reducing or even completely eliminating other debts like credit accounts and medical debt.

Determining eligibility for chapter 7 and predicting the consequences of filing is complex due to recent amendments to the bankruptcy code, and you should always consult with an attorney to ensure the best results. Chapter 13 is even more complicated and requires an experienced attorney who is familiar with local rules and procedures of chapter 13 in your area.

Chapter 7 eliminates most debts, with the exception of student loans, some taxes, spousal and child support obligations and court fines. If a creditor can show that a debt was incurred through fraud, that debt will not be discharged in bankruptcy. For this reason, it is important that you do not continue to use credit accounts once you realize you will be unable to repay them.

Chapter 7 can result in the liquidation of some assets. A complicated set of state and federal laws called “exemptions” protect certain categories of assets up to a certain value. The purpose of exemptions is to allow you to keep items necessary for obtaining a fresh start. For example, Oregon law protects to some extent household goods and furnishings, clothing, jewelry, retirement accounts, some home equity and equity in vehicles, tools and firearms.  Because exemption laws are complex, it is vital that you consult with a bankruptcy attorney before choosing to file a chapter 7 bankruptcy.