Chapter 13 also lets you keep your home even if you have equity above the homestead exemption. Oregon's protection for the equity in your home is seriously out-of-date but the homestead exemption built in to the Bankruptcy Code is even worse. At $20,000.00 for an individual and $40,000.00 for a couple, it is really way too low. If you have lived in Oregon for at least two years, you get to choose which set of exemptions you use when you file bankruptcy. 

We have been finding that after years of a strong real estate market in Oregon, many homeowners, who may need to file bankruptcy because of loss of their jobs or business income from COVID related business closures, have substantial equity in their homes. Believe it or not, the Oregon Homestead Exemption is only $40,000.00 for an individual and $50,000.00 for a couple. So, if you have more than that, say $75,000.00 or $80,000.00, the trustee in a Chapter 7 case is duty bound to sell your home and use the non-exempt equity to pay your debts. 

But Ch 13 lets you pay over a 5 year period the amount of the non-exempt equity that your creditors would have received in Ch 7. So you can keep your house without having to pay everyone in full.

And if you owe back taxes, they get paid first and in some cases are the only things that get paid. 

Many people are unable to make their mortgage payments once the COVID related forbearance ends. Chapter 13 stops foreclosure proceedings and lets you catch up on the missed payments or, in the worst case scenario, to sell your home yourself instead of losing everything in a foreclosure sale. 

So Chapter 13 is a powerful tool to protect your home and, if you owe back taxes, get them under control at the same time.

How does it work? In Chapter 13, we propose the plan and then the trustee and any creditors who want to be involved react to it. Then the negotiations start to get everyone on board with a workable solution consistent with the protections that are built into the Bankruptcy Code. 

We do the paperwork together with you and come up with the plan plus the budget and other documents to support it. If you have a business, this includes the business budget and a strategy to protect the business and its assets, if necessary. 

Obviously this is complicated and requires an attorney with years of experience dealing with the ins and outs of Chapter 13. 

Please give me a call if you have questions. I care about your financial future and protecting you, your home and your family and I am  here to help you. You can schedule a free consultation over the phone. I will call you to answer your questions and discuss your options, in and out of bankruptcy.