Baxter & Baxter, LLP | Consumer Protection | Bankruptcy Attorneys | Oregon & Washington

Frequently Asked Questions about Filing for Bankruptcy in Oregon and Washington This information is presented by the Bankruptcy Practice Group of Baxter & Baxter, LLP. The Bankruptcy Practice Group of Baxter & Baxter, LLP represents individuals in Chapter 7 and Chapter 13 bankruptcies. We offer a free initial phone consultation. We can stop collection calls from debt collectors. We can advise consumers whether to file for bankruptcy, and what form of bankruptcy to file. Our rates are competetive, and an uncontested no-asset Chapter 7 bankruptcy can be filed for as little as $1,250. Can I stop a home foreclosure on my mortgage? Yes. A Chapter 13 bankruptcy will stop a foreclosure on your home. You can propose a payment plan to pay off your past-due mortgage payments over three to five years. If you file a Chapter 7, it will temporarily stop any foreclosure proceedings against you Can I stop collection calls and letters? Yes. Once you file for bankruptcy, the automatic stay prevents almost all of your creditors from taking any action to enforce any debt. This includes collection calls, letters, and lawsuits. I have already filed a bankruptcy, can I file again? Yes, if your previous bankruptcy was filed a specified amount of time in the past. If your previous bankruptcy was a Chapter 7 liquidation, you need to wait eight years from the date the previous case was filed. If your previous bankruptcy was a Chapter 13 wage earner repayment plan, you need to wait four years to file a new Chapter 7 case and two years to file a new Chapter 13 case. Can I stop a garnishment of my bank account or paycheck? Yes. Almost all garnishments can be stopped with the exception of child support or spousal support obligations. Some creditors that hold claims that will not be discharged like student loans can start garnishment again as soon as your discharge is entered. Can I leave a creditor off my schedules? No. You are required to list all debts. Even debts that you want to keep paying. In fact, just because a debt is not listed on a bankruptcy schedule does not mean it is not included in the bankruptcy. In many cases even unlisted debts are discharged. This information is presented by the Bankruptcy Practice Group of Baxter & Baxter, LLP. The Portland, Oregon bankruptcy attorneys and Vancouver WA bankruptcy lawyers of the Bankruptcy Practice Group represent individuals in Chapter 7 and Chapter 13 bankruptcies. We offer a free initial phone consultation. We can stop collection calls from debt collectors and home foreclosures. We can advise consumers whether to file for bankruptcy, and what form of bankruptcy to file. “We are a debt relief agency. We help people file for relief under the Bankruptcy Code.”

Stopping Home Foreclosure through Bankruptcy 2 Many consumers are new home owners because of lax lending rules in recent years, and because of non-conventional loan schemes, including zero-interest, zero-down loans. The bad economy has left many new home owners wondering how bankruptcy will affect their mortgage and their ability to keep their homes. Bankruptcy offers a way to stop the foreclosure sale and to retain your property, even over the foreclosing creditor’s objection! Facing a foreclosure is something that they never imagined would happen. For them, and perhaps you, the foreclosure is often the result of circumstances beyond their control, such as temporary loss of a job or an illness. An obvious solution to the foreclosure may be to sell the property before the date of the foreclosure sale. However, it is often not possible to conclude the sale before the date of foreclosure. Plus, most people want to keep their home and find a way to get caught up on their payments. You may be able to stop or avoid home foreclosure and keep your home by filing a Chapter 13 bankruptcy. The Portland, Oregon bankruptcy attorneys of Baxter & Baxter, LLP, can advise you on whether you should file for bankruptcy, and whether Chapter 13 bankruptcy is right for you. Foreclosures under Chapter 13 Bankruptcy In a Chapter 13 bankruptcy, the court enters an order creating a repayment program. The Plan lets the debtor pay off the arrearage, including late payments over the length of a repayment plan, usually three to five years in some cases. The benefit of filing for Chapter 13 bankruptcy is that the home owner gets to keep their home and get current on the mortgage over time. A Chapter 13 bankruptcy may also help you eliminate the payments on your second or third mortgage altogether. Unlike your first mortgage, which is secured by the property and the value of the property, you may no longer have any equity with which to secure the subordinate mortgages. Under those circumstances, the court may “strip off” the second and third mortgages and recategorize them as unsecured debt. Under Chapter 13 of the bankruptcy code, unsecuritized debt takes last priority and often does not have to be paid back at all. Foreclosures under Chapter 7 Bankruptcy If you do not have sufficient income after your bankruptcy to qualify for a repayment plan, it may be necessary to petition for a total liquidation under Chapter 7. If you are not able to afford your mortgage payment after your bankruptcy (for example in the case of death, divorce, or long-term unemployment), the debtor can surrender the property back to the lender. If you are filing for Chapter 7 bankruptcy, the final discharge order will at least discharge the debt, including the deficiency. In some cases, it is possible to reaffirm a mortgage, but at the close of the bankruptcy case, the debtor must immediately get current on the arrearage, including late payments and charges; otherwise the lender can start a new foreclosure proceeding. The Portland bankruptcy lawyers of Baxter & Baxter, LLP, offer competitive rates, and we can work with you to move swiftly to avoid home foreclosures. For a free phone consultation with a Portland, Oregon bankruptcy lawyer, call (503) 297-9031 today! This information is presented by the Bankruptcy Practice Group of Baxter & Baxter, LLP. The Portland, Oregon bankruptcy attorneys and Vancouver WA bankruptcy lawyers of the Bankruptcy Practice Group represent individuals in Chapter 7 and Chapter 13 bankruptcies. We offer a free initial phone consultation. We can stop collection calls from debt collectors and home foreclosures. We can advise consumers whether to file for bankruptcy, and what form of bankruptcy to file. “We are a debt relief agency. We help people file for relief under the Bankruptcy Code.”

Significant Changes to the Bankruptcy Code under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA): The Presumption of Abuse and Qualification for Chapter 7 Discharge The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) represented the most sweeping change to the Bankruptcy Code since the modern bankruptcy code was enacted in 1978. It was roundly criticized and opposed by the bench and bar, consumer advocates, and legal commentators, but a potent lobby by creditors, led by credit card banks were able to convince the Congress to enact the significant amendments which were viewed as largely business friendly changes to the law. Perhaps the most significant change to the bankruptcy code under BAPCPA was the “Presumption of Abuse.” Under the pre-BAPCPA bankruptcy code, debtors could file for bankruptcy under Chapter 7 liquidation or total discharge, regardless of their income level. Under the BAPCPA amendments, debtors had to prove that they qualified for Chapter 7 bankruptcy. BAPCPA creates a method to calculate a debtor’s income, and compares this figure to the median income of the debtor’s state. If the debtor’s household income falls below the median income for the state, then the debtor automatically qualifies to file for Chapter 7 bankruptcy. If the debtor’s income is above the median income amount of the debtor’s state, the debtor is subject to a “means test.” The means test works roughly like this: The debtor first calculates the “current monthly income” comprised of all sources of income for the household. The debtor’s current monthly income is then offset by a set of deductions specified by the Internal Revenue Service. In general, the allowable deductions applicable in the means test include: 1. Certain specified living expenses, 2. Contributions to care of nondependent family members, 3. Expenses of administering a Chapter 13 repayment plan, 4. Educational expenses up to $1,500 annually per child, 5. Home energy costs, 6. A percentage of certain secured debt, 7. Expenses “reasonably necessary health insurance, disability insurance, and health savings account expenses,” 8. Expenses for protection from family violence, 9. A percentage of all priority debt, and 10. Contributions to tax-exempt charities. After the debtor’s income and expenses are summed, the court or trustee considers whether a “presumption of abuse” exists. Such a presumption exists if the debtor has at least $166.67 in current monthly income after the allowed deductions, the debtor has at least $100 of such income and this sum would be enough to pay general unsecured creditors more than 25% over five years (i.e., they could successfully enter into a Chapter 13 repayment plan). Absent special circumstances, if the debtor “fails” the means test, he or she cannot seek Chapter 7 liquidation or total discharge. Rather, he or she must petition for a repayment plan under Chapter 13.

Calendar year 2009 has been a watershed time for reorganizing automobile manufacturers globally. Two of the three primary American auto assemblers, Chrysler LLC and General Motors Corporation, sought relief under Chapter 11 of the United States Bankruptcy Code in the first six

With increasing frequency, financial restructurings are being implemented via a variety of distressed M&A transactions: Section 363 asset sales, Chapter 11 plans, acquisitions in connection with cross-border insolvency proceedings or out-of-court transactions. This Commentary discusses some