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Eugene OR Bankruptcy Law Blog

Is a no-interest credit card right for you?

Making several credit card payments each month in Oregon may stretch your budget so thin, you do not have room for anything but the minimum amounts on each. However, with high interest rates, your balances go down extremely slowly. According to, many people consolidate debt with a 0 percent interest credit card offer. However, not all offers are the same, and going this route may leave you in worse shape if you are not careful.

Even though there may not be any interest on the balance, there may be a fee on the transfer based on a percentage of the amount you are moving to the card. Moving a large debt from a card with a moderate interest rate could end up costing more through a transfer fee than you would have paid in interest had you left it in place.

When you have medical and credit card debt

If you dread checking the mail each day because of the number of medical and credit card bills piling up in your Oregon home, you may simply need a strategy for dealing with them. Of course, ideally, you would simply write a check for at least the minimum payment to each. But, what if you only have enough income for one or two after taking care of your living expenses? We at The Law Office of Kim Covington often advise our clients on the best way to handle this type of overwhelming debt.

When you have to choose between them, which should you pay first, the medical or the credit card bills? According to NerdWallet, start with the credit card debt. Otherwise, the balances may go up due to the interest rates on the debts, and late fees are often attached when you miss payments, too. Making the minimum payments on multiple cards may still be challenging, though, so it may be an option to consolidate them all onto a no-interest balance transfer card and put all your discretionary income toward that balance.

If you want to pay off your Chapter 13 plan early

A raise or bonus at a job or some other sudden increase in income could have someone wondering if it is really necessary to spend the rest of the original time period paying off a Chapter 13 bankruptcy plan in Oregon. According to, it depends on several elements of the debt reorganization plan. The most important factor, though, will probably rest with how much disposable income the person now has.

The Oregon State Bar notes that to make a change such as a reduction in the amount of time needed to complete the bankruptcy, a person will need to file a post-confirmation modification. To begin this process, a modified plan must be presented to the trustee listing the changes the person wants to make to the current plan.

Will my retirement be liquidated in my Chapter 7 bankruptcy?

The promise of relief from overwhelming debt may be making you eager to file Chapter 7 bankruptcy in Oregon. On the other hand, after years of contributing to your retirement account, you may be worried that liquidation of these funds will leave you destitute or prevent you from retiring at a reasonable age. The U.S. Bankruptcy Court for the District of Oregon explains that there are a number of sources of income that will not be affected when you file.

Federal law protects benefits that you need to support yourself and your dependents. However, this does not include payments from profit sharing plans, stocks bonuses or pensions that are not eligible for tax exemption from the IRS. Payments from this type of plan that an insider of the debtor established will also not be exempt from liquidation.

Negotiating your credit card debt

Making the minimum payments on your credit card debt in Oregon may increase what you owe significantly due to a high interest rate, and you could end up paying for years after a relatively small purchase. If you have more than one card, you could also end up with payments that do not fit within the limits of your budget. The team at The Law Office of Kim Covington has often provided advice to people who are struggling with their credit card payments.

According to, you may have options to manage your credit card bills. For example, your creditor may be willing to offer you a forbearance program. This would give you a temporary break from your payments, although it would not eliminate any of the debt. On the other hand, you may be able to lower the total you owe by requesting a lower interest rate or late-fee forgiveness.

Can a debt collection company garnish my bank account?

While struggling to pay bills in Oregon can be stressful, you may be wondering what could happen to you if you are unable to pay a debt at all. While creditors do have some legal recourse for collecting the money you owe them, there are also federal and state laws that protect your rights.

According to the Oregon State Bar, no one can take your money without going to court. If you have not received a summons and a complaint, then this has not happened yet. If you are served with these documents, then you have the opportunity to dispute the debt or the amount you owe. Unfortunately, if the creditor is awarded a judgment, you may owe legal fees, court costs and interest in addition to the original debt.

What factors could put your bankruptcy in jeopardy?

Bankruptcy is a legal process that must move forward in a certain way in Oregon. Any missteps or mistakes could result in the denial or dismissal of your Chapter 7 case. If this occurs, you would still be responsible for your debts.

According to the U.S. Courts, some requirements must occur before you can even file your case. For example, you must meet the income conditions for Chapter 7 if you mainly have consumer debts and not business debts. Above a specific amount, the court would apply a means test to determine if you actually could pay your bills, or if you are eligible for Chapter 13 bankruptcy. If either of these are true, it would be an abuse of Chapter 7 to allow your debts to be discharged.

When your health insurance doesn’t cover your medical bills

It may seem unfair that you can purchase health care insurance in Oregon and still end up with more medical bills than anyone could reasonably be expected to pay. If your disposable income does not begin to cover the debt you acquired through copays and deductibles, you may be worried about the effects on your quality of life. At the Law Office of Kim Covington, our team works with many people who want to restore their financial equilibrium.

According to, you need to take action quickly. Waiting until after your medical bills are past due may put you at a disadvantage. If you have enough breathing room in your budget for a small payment each month, and you do not owe multiple entities, you may be able to set up payments and keep your debt from going to collections. However, some health care facilities limit the amount of time you have to pay the balance in full.

Do I have to reaffirm my mortgage?

After you declare bankruptcy in Oregon, you still have to have a place to live, and the costs of moving may be considerable, particularly with the soaring rent prices and lack of rental homes available in many portions of the state. That does not necessarily mean you want to remain tied to your mortgage and your home forever, though. With some time to put money back after your debts are discharged, you may be looking forward to finding a new place that suits your needs better.

The good news, according to, is that you may be able to stay in your home indefinitely without retaining the obligation of your mortgage. This generally will only apply to you if you are not currently in the process of foreclosure, and you have not fallen behind in your payments. You must also continue to make your monthly payment on time. If you can meet these requirements, your lender will not foreclose on you and auction off the house.

Chapter 13 bankruptcy: benefits and basics

A person in Oregon who has fallen behind on payments or is struggling to meet all financial obligations may find a solution through a Chapter 13 bankruptcy. According to the Cornell University Law School’s Legal Information Institute, this type of bankruptcy typically allows people to keep their homes, and even some of the equity they have accumulated. Individual retirement accounts are also generally safe, and cars. Keeping these three major assets in place while paying off some debts and having others discharged make this reorganization plan appealing to many.

Taxes, student loans and child support are not usually dischargeable. The United States Courts explains that these are considered priority claims, and must be paid in full through the plan. Secured claims are tied to assets, such as a vehicle, and the debtor cannot pay less than the value of the item. Although a mortgage payment is a secured claim, the amount included in the repayment plan is typically only the amount that the debtor is behind. He or she must still make the regular mortgage payments, as well.

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The Law Office of Kim Covington

Eugene Office
1445 Willamette Street, Suite 9
Eugene, OR 97401

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Albany Office
1135 Dale Street SE, Suite #B
Albany, OR 97321

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Roseburg Office
1701 West Harvard, Suite 201
Roseburg, OR 97470

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Phone: 541-393-2790
Toll Free: 800-673-1891
Fax: 541-344-6466