Monday, July 15, 2013


Oregon's governor just signed SB 396 into law. As of July 1, 2013, Oregon consumer bankruptcy debtors may now opt for the federal exemptions in section 522 of the bankruptcy code. 

It is important to note that a debtor may only select one exemption scheme: Oregon or federal. A debtor may not mix exemptions. Several factors may play a role when selecting either set of exemptions, so it is important to consult an experienced bankruptcy attorney. 

Among those exemptions now available to Oregon debtors, the federal wildcard exemption may be the most significant. It allows the debtor(s) to apply the unused portion of their homestead exemption to protect equity in any property up to $12,725 in value. The exemption is doubled for married couples.

By contrast, Oregon's wildcard exemption is only $400.

From my experience handling consumer bankruptcies in SW Washington and NE Oregon, the larger federal wildcard exemption will reduce the number of chapter 7 asset cases, since many of those cases in the past entailed the trustee's liquidation of small sums from tax refunds, bank accounts, personal property equity, etc. The generous federal wildcard exemption will make such small-dollar cases a rarity.