Common Myths about Filing for Bankruptcy in Oregon and Washington

Below are a number of common myths about bankruptcy and explanations of the truth.

Bankruptcy will Ruin My Credit Forever.

False. It is true that bankruptcy can be reported on your credit report for up to 10 years after your case is filed, but the actual effect on your credit score varies depending on what your score was before you filed bankruptcy, and it is temporary because you can start rebuilding your credit immediately after filing your case. In many cases, especially for people who have very low credit scores before filing bankruptcy, their credit scores go up shortly after filing bankruptcy, as long as they maintain payments on obligations thereafter.

Bankruptcy Relief is No Longer Available.

This is not true. The new bankruptcy laws have made the process more burdensome in some cases, and altered eligibility for certain people, but for most people, if they were eligible before, then they are likely eligible now for bankruptcy relief.

If I file bankruptcy I will have to repay some or all of my debts.

This is false in most cases. For individuals, Chapter 7 is still available for most people, as set forth above. Sometimes if the analysis shows too much income on either the means test or current budget, you may have to do a repayment plan in a Chapter 13, but not usually. And a Chapter 13 is still a very workable option with other benefits.

I will lose all my property if I file bankruptcy.

False. Whether you get to keep your property depends on the value (or amount of equity) in any particular item of property and what exemptions you have available to protect the value in that asset. In the vast majority of cases in Oregon and Washington, you will be able to keep your property. Of course, analysis by a bankruptcy professional is necessary to accurately make that determination.

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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."