People in Oregon who are 55 and older may be more likely to file for bankruptcy than they would have been 30 years ago. Between 1991 and 2016, the percentage of people in the 55 to 64 age group who declared bankruptcy went up 66%. For those 65 to 74, it has increased more than 200%. In 1992, only around 2% of people who filed for bankruptcy were 65 and older. That has risen to 12%.
Oregon residents who find themselves overwhelmed with debt can seek relief by filing for Chapter 7 or a Chapter 13 bankruptcy. A Chapter 7 bankruptcy wipes out most debts and offers the chance of a fresh start. Those who file for Chapter 13 bankruptcy pay down some or all of their debts over a period of three to five years. Individuals generally file for Chapter 13 because they have assets they would like to protect or they earn too much money to file a Chapter 7 petition.
It can be difficult to get finances back on track when debts are piling up. Oregon consumers have options to reduce or eliminate debts, including negotiating with creditors or filing for bankruptcy under Chapter 7 or Chapter 13 of the Bankruptcy Code. The type of bankruptcy they should file for depends on their particular financial situation and their goals for the process. In many cases, the rules will determine which type of filing to make.
Lots of Oregon residents are struggling with debts they are unable to repay. While personal bankruptcy may provide an option for debt relief, many are wary of taking the hit to their credit reports that come with the option. However, these debtors may still begin to suffer serious credit damage, especially if late payments or unpaid bills begin to rack up. This means that debt-resolving bankruptcy can actually improve some people's credit scores in the long run.
Collection agencies sometimes cross the line into harassment when they contact debtors in Oregon. Abusive language, threats or excessive telephone calls and texts can add significantly to the stress of people who have fallen behind on payments. The Fair Debt Collection Practices Act recognizes that people might need protection from creditor harassment and establishes restrictions on the actions of debt collectors.
In Oregon and throughout the country, older Americans are filing for bankruptcy at a higher rate than their younger counterparts. Part of the reason is that government benefit programs such as Social Security are replacing a lower portion of a worker's income after retirement. At the same time, health care costs are going up, which can further strain the finances of someone 65 or older.
Oregon consumers who are considering filing for Chapter 13 bankruptcy might wonder what is involved in the repayment process. To file for Chapter 13 bankruptcy, it is necessary to go through the means test, which is income-based, and may have assets they want to keep. This might include the house. A Chapter 13 bankruptcy involves paying off debts over three or five years. Working with an attorney, the debtor creates a repayment plan that is then submitted to the bankruptcy trustee for approval. Many unsecured debts that remain at the end of the repayment period are discharged except for those that are not eligible. Among these are child support payments.
Oregon residents and others may be aware of the wage gap. However, they may not know that there is also a debt gap between men and women. On average, women have higher student loan, auto loan and credit card balances compared to men. Those who are trying to get out of debt should start by paying back the balances with the highest interest rates.
Some Oregon consumers might be struggling with debt but may hesitate to file for bankruptcy. Many people may feel it is more honorable to pay debts and that filing for bankruptcy will stigmatize them. However, bankruptcy is a tool that is intended to offer people a fresh start. Many experts say waiting to file leaves people financially depleted and less able to take advantage of the benefits.
Oregon residents may not file for bankruptcy because of the stigma surrounding it. However, it may be harder to truly get a fresh start after filing for those who wait too long to file. As a general rule, anyone who has a debt-to-income ratio of more than 40 percent should file for either Chapter 7 or Chapter 13 protection in the near future. The same is true for anyone who is not able to buy food or other necessities.