The Law Office of Kim Covington Eugene Bankruptcy Attorney | Chapter 7 & 13 Lawyer Corvallis | Springfield Foreclosure Prevention 2026-08-26T06:47:04Z https://www.kimcovington-bankruptcylawyer.com/feed/atom/ WordPress On Behalf of The Law Office of Kim Covington <![CDATA[What happens if your income increases during Chapter 13?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51976 2026-08-26T06:47:04Z 2026-08-26T06:47:04Z A raise does not automatically change your payment Your confirmed Chapter 13 plan does not automatically change just because your income increases. However, federal bankruptcy law allows a plan to be modified after confirmation in certain circumstances. The terms of your plan, your income, your expenses and other financial circumstances can affect whether a modification is appropriate. The requirements may also depend on the terms of your case and applicable bankruptcy procedures.

Your plan may be modified

Under federal bankruptcy law, a Chapter 13 plan may be modified after confirmation to increase or decrease the amount of payments in some circumstances. A modification can also change the length of time for making payments, subject to the requirements of the Bankruptcy Code. This means a substantial increase in income could lead to a request to increase your plan payments. It does not mean that every raise will result in higher payments. Depending on the circumstances, the trustee, you or an unsecured creditor may seek a modification. The court must approve a proposed modification.

What should you do after getting a raise?

If your income increases during Chapter 13, do not assume that you need to change your payment or that your case is in trouble. Instead, review the change with your bankruptcy attorney. Your attorney can look at your new income alongside your household expenses and the terms of your confirmed plan. This can help determine whether you need to take any action or whether your existing plan can continue as approved. An income increase can be a welcome change, even while you are completing a Chapter 13 case. Understanding how the change may affect your plan can help you move forward without unnecessary worry. For Oregon cases, the U.S. Bankruptcy Court for the District of Oregon administers bankruptcy cases under federal law and its Local Bankruptcy Rules. The requirements that apply to your case can depend on your confirmed plan and the circumstances of your bankruptcy.]]> On Behalf of The Law Office of Kim Covington <![CDATA[Can child care costs affect your Chapter 13 payment?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51975 2026-08-24T09:36:11Z 2026-08-24T09:36:11Z Daycare can make it possible to keep your job, but the monthly bill may take a large bite out of your family budget. If you are considering Chapter 13 bankruptcy, you do not necessarily have to treat child care as money left over for creditors. Necessary care costs can matter when determining what your household can reasonably afford to pay.

Counting child care as a necessary household expense

Chapter 13 uses income and expenses to help determine how much money is available for repayment. For filers who must complete Official Form 122C-2, the form provides a separate line for child care such as babysitting, daycare, nursery and preschool. Elementary and secondary school tuition follows different rules. This distinction helps working parents account for care they need while earning income for the household.

Connecting child care costs to disposable income

Disposable income generally means the money left after you subtract certain allowed expenses. Because child care may qualify as one of those expenses, a legitimate monthly cost can influence the amount available for a Chapter 13 repayment plan. Still, the payment is not simply your income minus daycare. Other bankruptcy rules, debts and household expenses also shape the calculation.

Reviewing whether child care expenses are reasonable

The amount you claim should reflect your actual circumstances. One parent may need full-time daycare, while another family may rely on before-school care, after-school care or a sitter during changing work shifts. The important question is whether the expense reflects a genuine need within your household budget.

Documenting what your family actually pays for care

Clear records make child care expenses easier to explain. Useful documents may include provider invoices, receipts, bank statements, payment histories or a written care agreement. If the cost changes during the year, keep records showing why. A rate increase, new work schedule or change in the number of children receiving care can affect what your family spends.

Updating a Chapter 13 plan when child care costs change

Chapter 13 plans often last three or five years, so a family budget can change before the case ends. Daycare rates may rise, a new child may need care or an older child may start school. Federal bankruptcy guidance recognizes that a plan may sometimes be modified when circumstances change. A shift in child care costs does not guarantee a different payment, but it may deserve review rather than simply becoming another strain on the budget.

Planning for a payment your family can sustain

A Chapter 13 payment may look manageable on paper today, but family needs rarely stay fixed for three to five years. Before committing to a plan, consider whether the payment would still work if daycare rates rise, your work schedule changes or another child needs care. If the budget only works under today's exact circumstances, that may be a reason to look more closely at whether the proposed plan leaves enough room for the years ahead.]]> On Behalf of The Law Office of Kim Covington <![CDATA[Can you file for Chapter 7 bankruptcy if you do not have a job?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51974 2026-08-07T12:42:27Z 2026-08-07T12:42:27Z Things unemployed filers need to know Unemployment often makes Chapter 7 the most practical solution to erase eligible unsecured debts. Here are a few essential factors unemployed filers should know, including:
  • Passing the means test is easier: Chapter 7 involves a means test comparing income to the state median. Since this evaluates the previous six months of earnings, recent unemployment often makes it easier to qualify.
  • Counting unemployment compensation as income: Any unemployment benefits received except social security benefits are counted as income on your bankruptcy schedules.
  • Filing fee waivers are available: If household income is below 150% of the federal poverty line, filers can ask the bankruptcy court to waive the filing fee or pay in installments.
  • Bankruptcy exemptions protect your essential property: Filers could use state or federal bankruptcy exemptions to protect essential assets up to specific statutory limits.
Because most unemployed individuals own primarily exempt property, Chapter 7 usually allows them to wipe out their debt without losing their day-to-day possessions.

Stepping toward a better future

Unemployment doesn’t block you from seeking debt relief. Often, this makes it easier to qualify for a fresh start. If medical debt or unpaid bills are accumulating while you search for work, reaching out to a skilled bankruptcy attorney could help you protect your assets and find your financial footing.]]> On Behalf of The Law Office of Kim Covington <![CDATA[Does your income qualify for Chapter 7 in Oregon?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51973 2026-08-06T03:50:22Z 2026-08-06T03:50:22Z What the means test actually is The means test is an income check that compares your household's average monthly income over the six calendar months before filing to Oregon's median for your household size. If your income falls at or below that median, you qualify for Chapter 7 without any further calculation. The test counts gross income from everyone in the household, including a non-filing spouse. Not all income counts, though. Social Security and qualifying VA disability payments do not factor into the calculation, which matters for seniors and those on fixed incomes. Private disability benefits generally do count.

How Oregon's income thresholds work

The U.S. Trustee Program updates Oregon's median income figures twice a year, in April and November, and the current figures are the only numbers that matter on the day you file. Thresholds increase with household size, so a family of four has a higher limit than a single-person household. If you are a single parent with two children, for example, your income is compared to the median for a three-person household, not the state average. Household size can make a significant difference in whether you qualify.

What happens if you are over the median

Being over the median does not mean you are out of options. It means you move to the second part of the test, where allowable expenses, including housing, utilities, food, transportation, childcare and medical costs, are subtracted from your income. Many families who appear over the limit still qualify once those deductions are applied. If you still have too much disposable income after deductions, Chapter 13 may be worth exploring. It allows you to repay a portion of your debt over three to five years while keeping your assets.

What Chapter 7 can and cannot erase

Chapter 7 can discharge most unsecured debt, including credit card balances, medical bills, personal loans and utility arrears. For families overwhelmed by debt, this can mean a genuine fresh start. It cannot discharge certain debts, including most student loans, recent tax debt, child support and alimony. Secured debts like a mortgage or car loan are also not eliminated unless you choose to surrender the property. If you are unsure whether Chapter 7 is right for your situation, speaking with a bankruptcy attorney is the best next step. The means test has more nuance than it appears, and an experienced lawyer can help you understand exactly where you stand.  ]]> On Behalf of The Law Office of Kim Covington <![CDATA[Don’t wait too long to file for bankruptcy]]> https://www.kimcovington-bankruptcylawyer.com/?p=51972 2026-07-23T16:48:36Z 2026-07-23T16:48:36Z The thought of filing for bankruptcy can be intimidating. As a result, you may spend months or years trying to stay ahead of mounting debt by making minimum payments, moving balances between credit cards or relying on savings to bridge financial gaps. However, waiting too long to explore bankruptcy options can leave you in a worse position than when the debt problems first began. Here's why.

You may lose assets trying to keep up

Trying to keep up with mounting debt often forces people to make difficult financial decisions. Some may withdraw from retirement accounts, sell valuable property or use emergency savings to cover payments and avoid falling behind. While these actions may provide temporary relief, they can leave you with fewer resources to rebuild your financial future. For instance, assets that may have been protected in a bankruptcy case could be depleted before you ever explore your options. Additionally, if creditors have already filed lawsuits, obtained judgments or taken steps to collect on debts, recovering those losses or reversing those actions may be challenging.

Your debt may continue to grow

Delaying bankruptcy can also allow interest, fees and penalties to continue adding to what you owe. This is especially common with credit cards and other high-interest debts where you may find yourself putting more money toward debt without making meaningful progress.

Financial stress can affect your overall wellbeing

Constantly worrying about bills, collection calls, missed payments and whether you can cover basic expenses can take a toll on your daily life and overall wellbeing. Over time, this burden can affect your daily routine, relationships and ability to focus on moving forward. Remember, the goal is not to rush into bankruptcy without careful consideration. Seeking professional legal guidance can help you understand your options and make informed decisions toward building a more financially stable future.]]> On Behalf of The Law Office of Kim Covington <![CDATA[How much does it cost to raise a child?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51969 2026-07-10T15:21:48Z 2026-07-10T15:21:48Z New parents are often well aware of the costs of initially having a child. Even if they just have to meet their deductible before health insurance will cover those costs, they may still have to pay thousands of dollars. They also need to buy a lot of supplies and equipment around the house, and may even need to make home renovations. But how much does raising a child cost long-term? It goes well beyond those initial expenses. Some studies claim that it costs over $300,000 to raise a child until they turn 18, which is just under $17,000 per year.

Creating stress in a stable budget

What this means is that young parents may suddenly find themselves facing far more expenses than they realized, which can put quite a lot of strain on a budget that may have worked before the child was born. Naturally, there are certain issues that can make raising a child even more expensive. If the child is dealing with a chronic illness, for example, they may have numerous doctor's appointments to attend. If the parents have to work, they have to consider the costs of daycare or childcare. Parents who prioritize a child's education may have to pay tuition, even in elementary school.

What happens when debt feels overwhelming?

Those who have a child unexpectedly could certainly find themselves facing high levels of debt and financial strain. But even those who intentionally had a child and carefully planned and budgeted in advance could still find that it is more expensive than they realized. If you are in this position and your debt has started to feel overwhelming, it may be worth looking into all of your legal options. This could include filing for bankruptcy to eliminate debts or consolidate them into a repayment plan, so it is important to know exactly what options you have.  ]]> On Behalf of The Law Office of Kim Covington <![CDATA[Will a new Oregon law increase medical debt?]]> https://www.kimcovington-bankruptcylawyer.com/?p=51968 2026-06-30T02:46:48Z 2026-06-30T02:46:48Z The beginning of 2026 brought the end of government subsidies that made health insurance significantly more affordable for those who have been able to get health insurance thanks to the Affordable Care Act (ACA). Here in Oregon, that is through the Oregon Health Insurance Marketplace. Now, there’s another concern for many Oregonians. Gov. Tina Kotek recently signed a bill into law that affects many of those who qualify for discounted or free care at nonprofit hospitals.

How has the law changed?

Specifically, the new law limits when these hospitals have to determine whether a patient qualifies for financial aid before billing them. They’re now only required to pre-screen and, if applicable, offer insured patients this financial aid if their visit or stay will cost more than $1,500. That is triple the previous amount. Those patients who are uninsured or on the Oregon Health Plan (OHP), which is the state’s version of Medicaid, will continue not to be billed unless and until it’s determined that they do not qualify for this financial help. The new law stemmed from hospital executives’ complaints about the cost of Oregon’s “presumptive eligibility” law – the first of its kind in the country.  Those in favor of the new law point out that it doesn’t take financial aid away from anyone. It just requires that fewer people be screened before being sent a bill. Patients who receive a bill who believe they qualify for discounted or free care need to complete a Charity Care/Financial Assistance Application.

Why the new law may increase medical debt

Since more responsibility is moved from the hospitals to patients and their families, people are more likely to lose out on benefits to which they’re entitled. They may not receive the application, neglect to complete it or even be too embarrassed to do so. All of this will only worsen the crisis of medical debt, which is a leading cause of bankruptcy throughout the U.S. When people are overwhelmed by medical bills, it can affect their entire life and their ability to afford everyday living expenses. Getting experienced legal guidance can help people determine the best way to overcome medical debt and strategize a clear financial path. ]]> On Behalf of The Law Office of Kim Covington <![CDATA[How your car fits into Chapter 7 bankruptcy]]> https://www.kimcovington-bankruptcylawyer.com/?p=51965 2026-06-25T15:45:32Z 2026-06-25T15:45:32Z Why the car may become a Chapter 7 worry When you consider Chapter 7, one early concern is whether you could lose access to your vehicle. That worry often comes from questions about what you still owe, what the car is worth and how those details may affect the bankruptcy process. Filing Chapter 7 does not automatically mean giving up your vehicle. Oregon law allows you to protect a certain amount of equity in a vehicle through state or federal bankruptcy exemptions. However, ownership details could still affect how the car fits into the bankruptcy review. If you haven’t paid off your car loan, the lender usually has an interest in it. If you have fully paid it, its value may become a larger part of the bankruptcy review. Either situation might make the vehicle an important part of the discussion before the case moves forward.

What life may look like without a vehicle

The possible loss of steady transportation may create practical problems right away. Without it, your commute could take more time. Routine errands such as getting groceries or visiting the doctor may also become more complicated. Those problems often connect to one another. If getting to work becomes harder, household income may become less steady. Your children’s school routines might become more difficult to maintain. Public transit might also not match your commute schedule, especially if you have unconventional work hours.

Reliable travel supports family stability

Chapter 7 may involve legal and financial review, but having a car shows how those choices could affect your family’s day-to-day living. A vehicle may raise questions about value, debt and available protections, yet its daily purpose matters too. The issue is rarely only about a car. It is also about keeping work, school and family responsibilities stable.]]> On Behalf of The Law Office of Kim Covington <![CDATA[More Americans are using credit cards for everyday expenses]]> https://www.kimcovington-bankruptcylawyer.com/?p=51964 2026-06-16T20:48:01Z 2026-06-16T20:48:01Z spending more on everything else, too.” Critics were quick to point out that many people use credit cards to pay for gas and other everyday expenses when they don’t enough money available to cover the cost of them. When credit card bills aren’t paid in full each month, interest accumulates – sometimes accompanied by late fees. These can add significantly to one’s overall cost of living.

A “coping mechanism to make ends meet”

An analyst with the Achieve Center for Consumer Insights says that, "Rising credit card usage does not signal financial strength. For many, it's a coping mechanism to make ends meet. Increasingly, we're seeing Americans rely on revolving debt not for discretionary spending, but to manage the rising cost of everyday necessities." The organization reported this year that over half (53%) of the people it surveyed are using their credit card balances for essential expenses. Some 57% of the consumers surveyed said they anticipated carrying these and other unsecured and short-term debts for at least six months as they struggled to keep up with rising costs. The Achieve analyst notes, "Credit card spending can look strong on the surface, but the underlying question is what consumers are actually putting on those cards. For many households, higher balances are less a sign of economic optimism and more a sign that wages and savings are struggling to keep pace with essential expenses like groceries, utilities and housing." If the money you have coming in isn’t keeping up with your cost of living, you’re likely not in a position to pay off your credit cards balances on the payment due date any more than you were to pay for your purchases when you swiped your card or input your number online weeks earlier. If credit card debt is overwhelming you, it’s smart to look at all of your potential options sooner rather than later. Getting legal guidance can be well worthwhile when it comes to finding a viable way forward.]]> On Behalf of The Law Office of Kim Covington <![CDATA[How Chapter 13 bankruptcy can stop foreclosure on your home]]> https://www.kimcovington-bankruptcylawyer.com/?p=51962 2026-06-16T09:14:50Z 2026-06-16T09:14:50Z The automatic stay When you file for Chapter 13 bankruptcy, federal law immediately activates an automatic stay. This legal protection stops a lender from continuing foreclosure proceedings. This means they cannot contact you regarding the debt. They also cannot take any collection action. This gives you breathing room to reorganize your finances. Oregon courts must honor this federal protection. However, you must continue making your regular mortgage payments after filing and maintain adequate insurance on your home. If you fall behind on these obligations, your lender can petition the court to lift the stay and resume foreclosure.

Creating a repayment plan

Chapter 13 bankruptcy allows you to propose a repayment plan that spans three to five years. This plan lets you catch up on your mortgage arrears through manageable monthly installments. Note that the bankruptcy court must approve your repayment plan. Your plan must show that you have enough income to make both payments. Oregon bankruptcy courts will review your income, expenses and proposed payment schedule. Once approved, you make one monthly payment to a bankruptcy trustee. The trustee then distributes funds to your creditors according to the plan.

Long-term benefits for homeowners

Chapter 13 bankruptcy does more than stop foreclosure. It helps you address other debts that may strain your budget. You can reorganize credit card debt, medical bills and personal loans. This frees up money to keep your mortgage current. Oregon homeowners may also use state exemptions to protect equity in their primary residence during bankruptcy. Completing your repayment plan allows you to emerge with your house intact and a fresh financial start.

Protecting your home against foreclosure

Facing foreclosure does not mean you have lost all hope. Chapter 13 bankruptcy provides a structured path to save your home and regain financial stability. Understanding how Chapter 13 works is the first step toward stopping foreclosure and reclaiming your peace of mind.]]>