Chapter 7 Bankruptcy Attorney Serving the Portland Metropolitan Area

Financial hardship is a common problem in today’s world. Individuals and businesses alike can face financial difficulties, which can lead to overwhelming debt and an inability to pay bills or meet financial obligations. When this happens, knowing your debt relief options can be a beacon of hope. One such option is Chapter 7 bankruptcy, a legal route that can provide a fresh start for those drowning in unmanageable debt. 

Despite common misconceptions, filing for Chapter 7 bankruptcy is not an admission of failure but a strategic step toward reclaiming financial stability. However, understanding bankruptcy can be challenging without professional help. At Lyndon Ruhnke, P.C., located in Gresham and Beaverton, Oregon, I've seen firsthand how bankruptcy can improve people's lives, and I am dedicated to helping individuals and businesses achieve debt relief. 

What is Chapter 7 Bankruptcy?

Chapter 7 Bankruptcy, often referred to as "liquidation" bankruptcy, is a debt relief option designed for individuals and businesses to eliminate most of their unsecured debts through the liquidation of non-exempt assets. For Chapter 7 bankruptcy, a trustee is appointed to oversee your case and evaluate your assets and debts. The trustee will sell your non-exempt assets and the proceeds will be used to pay off your existing debts. 

It's important to note that not all of your assets are subject to liquidation; certain personal properties and equity may be exempt, depending on state law. For example, Oregon's exemption laws allow you to keep essential items to ensure you don't start from scratch. 

Your eligibility to file for Chapter 7 bankruptcy depends on your unique circumstances and whether you have enough income to repay some portion of your debts. It's also essential to understand that not all your debts can be discharged under Chapter 7 bankruptcy. 

What Does Chapter 7 Bankruptcy Do?

Filing for Chapter 7 bankruptcy offers a number of positive outcomes: 

• It discharges most types of unsecured debt. This means your existing credit card bills, medical expenses, and personal loans can all be wiped clean.  

• It rebuilds your credit over time. Although bankruptcy will remain on your credit report for up to ten years, it allows you to start rebuilding your credit immediately. By getting rid of unsecured debt, you'll have more disposable income that can be used to rebuild your credit score.  

• It stops collection actions. Once you file for bankruptcy, an automatic stay goes into effect, which legally stops creditors from pursuing collection activities. This means creditors cannot send harassing phone calls or letters demanding payment, garnish wages, or initiate or continue lawsuits during this period.  

• It allows for a fresh start. Beyond financial relief, Chapter 7 bankruptcy also provides mental and emotional relief. By eliminating unmanageable debt, you can focus on rebuilding your financial future without debt-related stress and anxiety. 

What Doesn't Chapter 7 Bankruptcy Do?

While Chapter 7 bankruptcy does dismiss many types of debt, it isn't a magic wand. There are some types of debt it can't discharge. These include obligations such as child support, alimony, certain tax debts, and most student loans. Chapter 7 bankruptcy also won't save your home from foreclosure or your car from repossession if you're behind on payments, although it might buy you some time.  

Understanding these limitations is crucial as they can help shape your expectations and help you make informed decisions while working toward financial security. 

When Is Chapter 7 Bankruptcy a Good Option?

So, when does filing for Chapter 7 make sense? If you find yourself overwhelmed by debt with little hope of catching up, filing for bankruptcy might be your best option. It's particularly good for those with significant unsecured debt and minimal income to address it.  

In Oregon, making this choice often comes down to a combination of factors, including the type of debt you have, whether you are filing as an individual or a business, and your long-term financial goals. It's not a decision to take lightly, but for many, it can offer a vital second chance.  

If you're considering filing for Chapter 7 bankruptcy, seek the guidance of an experienced bankruptcy attorney. At Lyndon Ruhnke, P.C., I have helped numerous individuals and businesses through the hurdles of bankruptcy and take their first step toward financial security. 

How to File for Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy in Oregon involves several steps: 

1. Contact a Bankruptcy Attorney: Consult an experienced bankruptcy attorney who can help you file for bankruptcy. 

2. Gather Your Financial Documents: This includes everything from pay stubs and tax returns to a detailed list of debts and monthly expenses. 

3. Complete Credit Counseling: Before filing, you must complete a credit counseling course from an approved agency. This helps you explore your debt relief options and create a workable budget. 

4. File for Bankruptcy: Once you have completed credit counseling, fill out and file all the necessary forms with the Oregon bankruptcy court. 

5. Attend a Meeting of Creditors: Usually held within 20-40 days after filing, this meeting allows creditors to ask questions about your financial situation and assets. 

6. Complete Financial Management Course: Before your bankruptcy can be discharged, you must complete a financial management course from an approved agency. 

7. Receive Your Discharge: Once all the requirements are met, the court will officially discharge your debts.