02 Mar Oregon Bankruptcy: You Can Keep Your Gun But Not Your Tax Refund!!
When someone files for bankruptcy protection, the US Bankruptcy Code protects some property by declaring it “exempt”. Oregon voted to not participate in the exemptions provided for by the US Bankruptcy Code (yep, states are allowed to say “we don’t want the feds telling us what to do in our state!”). Oregon exemption laws are sometimes confusing. For example, there are six different figures that can be used to figure out a homestead exemption (ranging from $20,000 to $37,000 and depending on marital status and /or whether the residence is mobile home, mobile home on land, or a stick-built house). There is one exemption, no matter how many people live in the house for the household goods in the house ($3000). There is an exemption for cars of $2100 per car, limited to the husband/wife, or the single debtor. (in other words, a single person cannot claim two cars as exempt…just one).
Since Oregon is way out in the West, guns are considered important and there is an exemption for each debtor to have one long gun and one hand gun. The total value cannot exceed $1000.
Earned income credit is completely exempt in Oregon but a tax refund/other credits are not. Usually, if you file bankruptcy and are expecting a large return back, the earned income credit portion is deducted, and another $400 (“any other personal property not exceeding $400 in value), but the rest will have to be turned over to the bankruptcy trustee.
Each state makes their own exemption laws and decides whether to be part of the federal exemptions or not. In some states, you can keep larger amounts of money; in other states, your home can be any value at all.
A qualified bankruptcy attorney can discuss your exemptions and your assets with you and advise you regarding the exemptions available and what pitfalls to watch out for.
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