What Are the Oregon Bankruptcy Exemptions?

What are the Oregon bankruptcy exemptions, and why are they important in a Chapter 7 bankruptcy? 

Are you seeking debt relief in Portland? In many cases, all it takes is one turn of bad luck or a catastrophic event to take you from being financially stable to drowning in overwhelming debt, such as student loans or credit card debt. Perhaps you sustained an injury at work or illness that left you with steep medical debts. Most of us have been there. Or maybe you made a huge investment that did not pay off or lost your job. Regardless of the reason, if you’re struggling with crushing debt in Oregon, then filing bankruptcy can be a viable option that can help you regain control of your finances. 

When you file for bankruptcy in the state, you can preserve or protect some items from the bankruptcy trustee. Note that both Oregon state exemption laws and federal law might come into play in determining the exact amount of each exemption. Despite the stigma and myths often associated with bankruptcy, the process could help you end creditor harassment, and save your home from foreclosure while discharging certain debts that you can’t repay. 

If you file for Chapter 7 bankruptcy in Oregon, you may be able to protect most of your valuable possessions, such as a car, domestic animals and bank account. Keep in mind that the details of the bankruptcy process in Oregon will depend on your specific circumstances as well as the type of bankruptcy that you decide to file. The end goal, however, is the same: you can eliminate your debts and also give yourself a fresh financial start while keeping certain important personal items.

Does Oregon allow the use of federal bankruptcy exemptions?

There is some good news for Oregonians who are looking to file for bankruptcy protection in the state. Note that now there are 2 separate systems of bankruptcy exemptions to protect Oregon filers in bankruptcy. The Governor signed a significant law on July 1, 2013, that now allows individuals filing either Chapter 7 bankruptcy or Chapter 13 bankruptcy in the state to elect to use federal bankruptcy exemptions. It is a huge change to the bankruptcy process in Oregon with a substantial impact on bankruptcy cases now being filed.

The Bankruptcy Code has a list of federal exemptions. However, the Bankruptcy Code also permits each state in the country to opt-out of the federal bankruptcy exemptions and create its own list of bankruptcy exemptions.  Oregon has decided to provide its own set of exemptions and, until recently, the state prohibited filers from using the federal exemptions. However, now Oregon residents are allowed to use the federal bankruptcy exemptions rather than the Oregon exemptions. You cannot, however, mix and match between these two lists. If you’ve elected to use Oregon exemptions, you can also use federal nonbankruptcy exemptions, if applicable. You will want to carefully review both sets of exemptions before you determine which list can best protect your assets, such as your car or home. The following information on bankruptcy exemptions in Oregon will apply to all bankruptcy cases in which the person filing has lived in Oregon for two years (at least) before filing. 

Oregon Bankruptcy Exemptions

You may exempt any asset or property, such as liquor licenses, that falls into one of the bankruptcy exemptions categories below. Note that the main goal of allowing exempt property and other personal assets is to allow a person to get a fresh start. The exempt property often includes items like clothing, furnishings, home, and some equity in a car. You have to own an interest in the relevant property in order to claim a bankruptcy exemption in the state. 

If a married couple is filing jointly in Oregon, then each spouse can claim, or "double," the amount of each bankruptcy exemption. However, keep in mind that doubling isn’t available for your homestead and household items and household goods. Unsecured creditors can’t claim property that is deemed exempt under the law.

Real Property - The Oregon Homestead Exemption

Under the state exemption system, you can exempt up to $40,000 of your real property, or manufactured, floating, or mobile home. You may exempt up to 160 acres of real estate if your homestead is located outside of city or town limits. On the other hand, if it’s located within city or town limits, you can protect up to one city block. Note that some states in the US allow married filers to double the homestead exemption. While Oregon doesn’t allow you to double the exemption, married couples in the state filing for bankruptcy can increase the homestead exemption to exempt $50,000 of home equity. This means your home cannot be used to repay your creditors as part of your bankruptcy if your equity is less than that amount. 

The homestead exemption in Oregon applies to real property, which includes your home, manufactured home, condominium, or floating home. This exemption applies if the homestead is occupied by the owner, owner’s parent, spouse, or child. However, keep in mind that if you’re not living in the home but your intention is to sell the home, or your absence is only temporary and you intend to move back in, then you may still use this exemption.

Wild Card Exemption

Here is another important exemption. You can protect up to $400 of any asset or personal property that is not already covered by an existing bankruptcy exemption. 

Personal Property Exemptions

You may be able to protect a wide array of personal property and valuable assets, such as jewelry and personal apparel, depending on your circumstances. It also covers most of your other personal possessions other than your house. Some of the Oregon bankruptcy exemptions filers may use to protect their property in a Chapter 7 bankruptcy or Chapter 13 case include the following.

Motor Vehicle

The motor vehicle exemption in Oregon plays an important role in determining whether or not your bankruptcy trustee is allowed to take your car to repay your unsecured creditors. In Oregon, filers can protect up to $3,000 in equity in their car or another vehicle. Also, some states in the country allow married couples who file a joint bankruptcy petition to double the exemption amounts. Married couples in the state filing jointly have the option to double their vehicle exemption. 

This allows them to protect up to $6,000 in value in one vehicle. However, if the equity in the vehicle is over $3,000, you can’t tack on the state’s wildcard exemption in order to protect more value. You can only use the $400 state wildcard exemption for protecting personal property that’s not covered by another state exemption. However, you can use the Oregon wildcard exemption in order to protect value in another vehicle that’s not covered by the vehicle exemption.

Other Personal Property 

Under Or. Rev. Statute § § 18.345, 18.362, 348.863, you can exempt the following personal property.

You can protect up to $3,000 in various household goods. However, no doubling is allowed. You can protect up to $1,000 in poultry, animals, and a sixty-day supply of animal feed. However, no doubling is allowed for these items either. All health aids are exempt under the law. You can also protect up to $1,800 in jewelry, wearing apparel, and other items. 

Books, musical instruments and pictures are exempt up to $600. You can also protect a sixty-day supply of provisions and fuel for your family. Medical savings accounts and health savings accounts are also exempt under the law. You can also protect one shotgun or rifle and one pistol; however, the total value of these items can’t exceed $1,000. A qualified tuition saving program is exempt up to $7,500 and tools of trade are protected up to $5,000.

Money Benefits

Pension Exemption

Under sections 18.358 and 238.445, you can protect 100% of all Employee Retirement Income Security Act (ERISA)-qualified retirement plans as well as all public benefits and federal pension benefits. Note that these statutes also protect your retirement benefit plans if you’re a union member, federal employee or public employee. They will also protect your 403(b) accounts, 401(k) accounts, and IRA accounts. And if you are not sure if your retirement plan is exempt in a bankruptcy filing, then you should discuss it with a bankruptcy attorney before filing your case.

Wage Exemption

Subject to certain exceptions, disposable earnings are 75 percent exempt under Or. Rev. Statute § 18.385. Also, wages withheld in your Bond Savings Account are fully exempt. 

Public Assistance

The following are exempt up to $7,500 under Or. Rev. Stat. § § 344.580, 414.095, and 411.760:

• General assistance

• Aid to the disabled

• Medical assistance

• Injured inmate's financial benefits, 

• Vocational rehabilitation

• Old-age assistance

Pending Settlements and Claims

ORS Section 18.345(1)(k) exempts $10,000 in your personal injury settlement funds if you are an individual filer. For married couples filing a joint case, the exemption amount is $20,000 in personal injury settlement funds. Under Section 18.345(1)(L), you can protect up to $10,000 in compensation for the loss of your future earnings (this is to the degree necessary to support your family) if you are an individual filer. For married couples filing a joint bankruptcy case, the amount of exemption is $20,000 in compensation for the loss of future earnings (this is to the degree necessary to support your family).

You can also protect crime victims’ compensation under the law.

Under section 656.234 and section 18.348(2), you can protect up to $7,500 in workers’ compensation if you are an individual filer or up to $15,000 in workers’ compensation if you are a married couple and filing a joint bankruptcy case in Oregon. You should discuss a pending Social Security Disability award with a bankruptcy attorney before filing your bankruptcy case in the state. You will have to apply Oregon bankruptcy exemptions in order to determine the timing of filing the case with this issue.

Insurance

Note that group life policy or its proceeds that are not payable to 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. These exemptions are covered under Oregon Rev. Stat. § § 743.046, 743.049, 743.0474, and 743.050.

Alimony and Child Support 

Since certain family law orders are deemed important in the country and Oregon as a matter of public policy, child support and alimony are considered exempt in Oregon to the extent that these payments are reasonably necessary for the ongoing support of the bankruptcy filer and any of her or his dependents. You can exempt the amount under Oregon Rev. Stat. § 18.345. 

Other Oregon Exemptions

Claims for Tortious or Negligent Conduct

Under Oregon Rev. Stat. § 18.345(1)(j) you can protect personal bodily injury claims up to $10,000, along with any compensation for the loss of future earnings deemed reasonably necessary for support. 

Building Materials

You can exempt building materials under Oregon Rev. Stat. § 87.075 except for debts due for the purchase of these building materials. 

Burial Property and Cemeteries 

You can use bankruptcy laws to protect crematory and burial plots as they are fully exempt under Oregon Rev. Stat. § 97.675.

Filing Chapter 7 bankruptcy? 

You can file bankruptcy in Oregon to protect your assets and get a new start. A law firm can help you. Many other bankruptcy exemptions may apply to your case. Bankruptcy exemptions in Oregon are specific, and you have to apply them to your belongings on the date you file your bankruptcy case. You should contact an experienced bankruptcy lawyer in Oregon to see how they can help you. Developing a good attorney-client relationship will expedite the process. The attorney will also tell you, for example, whether Chapter 7 or Chapter 13 is better for you and help you with the bankruptcy court proceedings. If you are not able to afford a bankruptcy attorney to help you, you can take this simple and short quiz in order to find out if Upsolve’s free web app can help you.  Once you file for Oregon bankruptcy, the automatic stay will prevent almost all your creditors from taking action to enforce any debt. And this includes collection letters, calls, and lawsuits.