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Extra for Consumers

Whether you are a consumer or small business owner seeking protection under the Bankruptcy Code, there are always additional issues that you want your bankruptcy attorney to address. For consumers that always includes information about how the bankruptcy will affect your future ability to get credit. The first goal of your bankruptcy is a discharge of your debts. Usually, this bad debt has had a negative effect on your credit, so another goal is to rebuild your credit and the bankruptcy discharge can definitely help your credit score.

In determining whether to give you a loan, most lenders consider how much debt you still have to repay in addition to the new loan you are requesting. And then the lender looks at your income to determine if you can afford the new payment on top of the old ones. After the bankruptcy, you will enjoy your fresh start, which means that you are free of most or all your old debt. Therefore, potential lenders realize that you are in a position to repay any future creditor who wants to grant you credit.

This is also known as the "debt to income ratio". And it is part of what determines your credit score. Your debt to income ratio will usually be vastly improved by your fresh start in bankruptcy. So our clients frequently see a rise in their credit score as a direct result of the discharge of their debts.

In addition, a consumer creditor should know that a bankruptcy will remain on their credit report for 10 years under current standards. However, each account that was discharged in the bankruptcy will be removed from your credit report within 7 years, if not sooner.

But the biggest factor in getting new credit is the effort you take to rebuild your credit after discharge. If you demonstrate that you have stabilized your financial situation and can handle small amounts of new debt, you will be able to get new credit including car loans, personal loans and even home mortgages long before the bankruptcy comes off your credit report in 10 year. Many people find that their credit has been substantially rebuilt after two or three years.

Extra for Businesses

In 2017, the Oregon Legislature enacted a comprehensive and modern receivership statute. Receivership is a process used primarily in business disputes. It is used to allow a creditor to request that the state court appoint an official to monitor, operate and evaluate a debtor's business operation, and to run that operation with the specific goal of benefitting the creditors. This statute has many similarities to a reorganization under Chapter 11 of the Bankruptcy Code.

In addition to a receivership initiated by a creditor, it is possible for a debtor to voluntarily enter into a receivership in cooperation with the creditors. But in consulting with a bankruptcy attorney, one should know that the attorney is aware of all of the options for them and the potential actions one's creditors might take that will affect your future decisions, including this new receivership statute.

We are a debt relief agency. We counsel clients according to federal bankruptcy code.

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Judson M. Carusone, Attorney and Counselor at Law
1445 Williamette Street
Suite 9
Eugene, OR 97401

Phone: 541-344-7472
Fax: 541-344-6466
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