What Are the Oregon Bankruptcy Exemptions?

Why Are Bankruptcy Exemptions Important in a Chapter 7 Bankruptcy in Oregon? 

Bankruptcy exemptions are important in Chapter 7 cases because they help people protect the property and assets they own. Essentially, exemptions are laws that help you get a fresh start through bankruptcy without starting over from scratch.

If you own property that isn’t protected by an exemption, the bankruptcy trustee has the right to take and sell the property and give the proceeds to your creditors. This very rarely happens in Chapter 7 cases though. Most cases are considered “no asset” cases, which means that all the filer’s property is protected, and they get the bankruptcy discharge without losing anything they own.

Can Bankruptcy Filers in Oregon Use Federal Bankruptcy Exemptions?

Yes.

If you’ve lived in Oregon for at least two years, you’ll get to choose between the state’s bankruptcy exemptions or the federal bankruptcy exemptions. Here’s a quick comparison of some of the most important bankruptcy exemptions and how much is protected by Oregon’s state exemptions versus federal exemptions:

As you can see, if you’re a single filer who owns a home, you’ll get great protection with Oregon’s state exemptions. But if you don’t own a home, you may benefit more from federal exemptions, which provide a more generous exemption for your car and a wildcard exemption you can use to protect any property not otherwise protected.

It’s important to note that you can’t mix and match state and federal exemptions.

Source: Or. Rev. Stat. §§ 18.385, 13.395, 18.402, 18.428, 18.345(1)(d), 806.115, 18.345(1)(p), and 11 USC §§ 522(d)(1), 522(d)(2), 522(d)(5)

What Are Oregon’s Bankruptcy Exemptions?

When you file Chapter 7 in Oregon, you can use the state’s bankruptcy exemptions to protect a variety of things you own, from a home or car to household goods and money in the bank.

Exemptions are broadly broken down into three categories:

• Real property, which includes a home (including manufactured and mobile homes) or land 

• Personal property, which includes household goods, furniture, electronics, tools of the trade, and more

• Money benefits, which include retirement accounts, pensions, government benefits, and more

Real Property: The Oregon Homestead Exemption

You can exempt up to $40,000 — or $50,000 if married and filing jointly — in home equity under Oregon law. This applies to “real property,” which includes your home, manufactured home, condominium, or floating home. The home must be your primary residence to receive protection from the state’s bankruptcy exemption.

The law further defines that you can exempt:

• Up to 160 acres of real estate if your home is located outside of city or town limits

• One city block, if your home is located within city or town limits

Equity is the value of your home minus what you still owe on the mortgage. For example, if your home is valued at $350,000 and you owe $320,000 on it, you have $30,000 in equity. In this case, you could use the state exemption to protect your home.

Source: Or. Rev. Stat. §§ 18.385, 13.395, 18.402, 18.428

Personal Property Exemptions

Personal property covers a broad range of items, including most of your personal possessions.

Under Oregon law, exemptions protect:

• $3,000 in household goods*

• $1,800 in wearing apparel, jewelry, and other items

• $5,000 in tools of the trade or profession, including farm implements

• $1,000 in animals, poultry, and a 60-day supply of animal feed*

• Up to $7,500 in exempt funds deposited into a bank account

• $600 in books, pictures, and musical instruments

• One rifle or shotgun and one pistol to $1,000 total

• Personal injury awards to $10,000

• Qualified tuition savings program of up to $7,500 in a deposit account

The following are fully exempt:

• Crematory and burial plots

• 60-day supply of fuel and provisions for your family

• All prescribed health aids are fully exempt

*These exemptions can’t be doubled if you’re married and filing jointly.

Source: Or. Rev. Stat. §§ 18.345, 18.362, 18.348, 18.863, 18.345(1)(k), 97.675

Wildcard Exemption

Oregon has a $400 wildcard exemption.

This allows you to protect any asset or personal property that is not already covered by an existing bankruptcy exemption.

Motor Vehicle Exemption

One of the top questions we hear from bankruptcy filers is, “Will I be able to keep my car when I file Chapter 7?” The answer depends on the value of your car and the exemption you’re using.

In Oregon, the motor vehicle exemption allows you to protect up to $3,000 in equity in your car if you’re a single filer. To figure out how much equity you have in your vehicle, you’ll take the car’s current market value and subtract what you still owe on the loan. You can find the current market value of your car on websites like Kelley Blue Book.

If you’re married and filing your case jointly, you can double this exemption amount.

Money Benefits

Money benefits include retirement accounts and pensions as well as your current wages, government assistance, and other benefits. Oregon exemptions can be used to protect many of these, including:

• Child support and alimony necessary for support

• Crime victims' compensation

• Health savings accounts and medical savings accounts

• Wages in a bond savings account

• Workers’ compensation (up to $7,500)

Source: Or. Rev. Stat. §§ 18.345, 18.362, 18.348, 2962.070, 656.234, 18.348(2) 

Retirement Accounts and Pensions

Even if you choose to use the state’s exemptions, you can use federal non-bankruptcy exemptions to protect tax-exempt retirement accounts up to $1,512,350 per person. These accounts include:

•  401(k)s

• 403(b)s

• Profit-sharing and money purchase plans

• SEP and SIMPLE IRAs

• Defined-benefit plans

Source: 11 U.S.C. 522(b)(3)(C); (n)

Public Assistance

The following types of public assistance are exempt up to $7,500:

• General assistance

• Aid to the disabled

• Medical assistance

• Injured inmate's financial benefits

• Vocational rehabilitation

• Old-age assistance

Source: Or. Rev. Stat. §§ 344.580, 414.095, and 411.760

Insurance

Note that a group life policy or its proceeds that are not payable to the insured are exempt under the law. Fraternal benefit society benefits payments are exempt up to $7,500. Also, health or disability proceeds are protected under the law. Proceeds or the cash value of life insurance proceeds is exempt if you’re not the insured, while annuity contract benefits are exempt up to $500 per month.

Source: Oregon Rev. Stat. § § 743.046, 743.049, 743.0474, and 743.050

Need Help Filing Chapter 7 Bankruptcy in Oregon?

Understanding the ins and outs of Chapter 7 can be difficult. But here’s the good news: Most Chapter 7 filers are successful in getting their debts discharged! If you want help filing your case, see if you’re eligible to use our free filing tool. Upsolve has helped thousands of people file Chapter 7 bankruptcy and get rid of over $700 million of debt. Our services are 100% free and our users love us.

If you aren’t eligible to use our free filing tool, you can schedule a free consultation with an experienced bankruptcy attorney in your area.