The first thing many people worry about when they think about filing a bankruptcy is, “What will happen to all of my stuff?” When you have assets, or things like cars, motorcycles, jewelry, guns, and savings accounts, you may be concerned about whether you can keep them if you file a bankruptcy or if you might be forced to sell them. A recent change in the law makes it so that, more often than not, the answer is yes, you can keep them!
Of course not everything in every case will be protected, but in general, there laws that allow you to keep certain things when you file for bankruptcy. These laws are called exemptions. The new law in Oregon allows your attorney to choose between Federal Exemptions or Oregon Exemptions when filing your bankruptcy. Each set of exemptions has different dollar amounts that can be applied to your belongings, which will allow you to keep them. An experienced attorney can decide which set will be the best choice in your particular case.
For example, when you own a home and you want to keep it, it’s important to know the current value of the house and the current amount owed to the mortgage company. If your house is worth a lot more than you owe, your attorney may advise you to use Oregon Exemptions because those will let you protect more home equity.
If you don’t own a home or your house is worth less than you owe, the Federal Exemptions are likely the better choice. If you don’t need to protect a house, Federal Exemptions offer a large “wild card” exemption that you can use by itself or added to other exemptions to protect any items you choose, including cars, cash, collections, jewelry, tax returns, and more, up to $12,725 maximum per person. Other helpful Federal Exemptions include household goods and furnishing of $12,250 per person, motor vehicle of $3,675 per person, and tools of the trade of $2,300 per person.
When considering filing for bankruptcy, remember that it’s important to let your attorney know about everything you own or may have an interest in so that they can determine the best way to protect your assets.