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More options for Oregon Debtors: Oregonians can now elect to use Federal Exemptions When Filing Bankruptcy

Some really good news for Oregon Debtors facing bankruptcy.  Governor Kitzhaber has signed SB396 into law and Oregon debtors now have the opportunity to elect federal exemptions or Oregon exemptions when filing bankruptcy.  SB396 reversed the 30 year ban on use of federal exemptions in Oregon bankruptcy cases.  The bill can be used in all bankruptcy cases filed after July 1, 2013. 

In addition, there has been added to the already existing Oregon exemptions a new exemption for Health Savings Accounts in an unlimited amount.

What does this mean for Oregon Debtors?  It means more ways to protect your property and assets that youare allowed to retain when filing bankruptcy.  For example the Oregon exemption for an automobile is $3,000.00.  But if you elect to use the Federal Exemption you would be able to exempt a car worth $3,675.    The real benefit of using the Federal Exemptions is that you can borrow the unused portion of the Federal Homestead exemption up to $11,500 for an individual can be used instead to increase another Federal Exemption amount.

So you could exempt a car worth up to $15,175 by adding the $11,500 to the existing car exemption of $3,675.00  Or maybe you have some property that doesn't fit into a specific category.   Combining the wild car exemption of $1,225 with the transferable amount of $11,500 gives you an exemption of $12,725 to apply to any property you want to keep.   (This amount doubles for a married couple for an amount of $25,450.00)
 
Whether you use the Oregon Exemptions or the Federal Exemptions is something you will need to discuss with your bankruptcy attorney as part of your pre-filing bankruptcy strategy.  But this gives you a lot more options.   So if you considered filing bankruptcy in the past but were told you would lose certain property which kept you from filing, you might want to talk to a bankruptcy attorney again and see if the outcome will be more favorable given the change in Oregon's exemption laws.

Here is a list of the various Federal Exemptions that  can now be used by Oregonians filing bankruptcy if they chose to elect:

11 U.S.C. (Title 11 of the United States Code) Section 522(d)
Homestead:
522(d)(1), (5) - Real property, including mobile homes and co-ops, or burial plots up to $22,975. Unused portion of homestead, up to $11,500 may be used for other property.
Personal Property:
522(d)(2) - Motor vehicle up to $3,675.
522(d)(3) - Animals, crops, clothing, appliances and furnishings, books, household goods, and musical instruments up to $575 per item, and up to $12,250 total.
522(d)(4) - Jewelry up to $1,550.
522(d)(9) - Health aids.
522(d)(11)(B) - Wrongful death recovery for person you depended upon.
522(d)(11)(D) - Personal injury recovery up to $22,975 except for pain and suffering or for pecuniary loss.
522(d)(11)(E) - Lost earnings payments.
Pensions:
522(b)(3)(C) - Tax exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans). (Fully exempt.)
522(b)(3)(C)(n) - IRAS and Roth IRAs to $1,245,475.
Public Benefits:
522(d)(10)(A) - Public assistance, Social Security, Veteran’s benefits, Unemployment Compensation.
522(d)(11)(A) - Crime victim’s compensation.
Tools of Trade:
522(d)(6) - Implements, books and tools of trade, up to $2,300.
Alimony and Child Support:
522(d)(10)(D) - Alimony and child support needed for support.
Insurance:
522(d)(7) - Unmatured life insurance policy except credit insurance.
522(d)(8) - Life insurance policy with loan value up to $12,250.
522(d)(10)( C ) - Disability, unemployment or illness benefits.
522(d)(11)( C ) - Life insurance payments for a person you depended on, which you need for support.
Wildcard:
522(d)(5) - $1,225 of any property, and unused portion of homestead up to $11,500.

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