Oregon Bankruptcy Filers Can Now Use the Federal Exemptions

Effective July 1, 2013, those filing for bankruptcy\ in Oregon will be able to use the federal bankruptcy exemptions instead of the Oregon exemptions.  In addition, Oregon added an exemption for medical savings accounts and health savings accounts.

(To learn how bankruptcy exemptions help you keep property in Chapter 7 bankruptcy, visit Nolo’s Bankruptcy Exemptions topic area.)

Using the Federal Bankruptcy Exemptions

All states have their own set of exemptions that debtors can use in bankruptcy. Some states allow bankruptcy filers to elect to use the federal bankruptcy exemptions instead of the state exemptions. In those states, filers may choose to use one set or the other, but cannot mix and match.

Prior to July 1, 2013, Oregon bankruptcy filers were not allowed to use the federal bankruptcy exemptions. But thanks to recent legislation (SB 396) that was signed into law on July 1, 2013, bankruptcy filers in Oregon may now elect to use the federal bankruptcy exemptions.

(To find a list of the most common exemptions in Oregon, see Nolos’ article Oregon Bankruptcy Exemptions.)

The Option to Use the Federal Exemptions Provides Flexibility to Oregon Filers

This development is a bonus for Oregon bankruptcy filers. Being able to choose between two sets of exemptions gives filers more flexibility. For some types of property, the Oregon exemptions are more generous. For others, the federal exemptions provide more protection.

For example, although the Oregon homestead exemption is greater than the federal homestead exemption, the federal wildcard exemption is significantly more than the Oregon wildcard exemption. For a filer that does not own a home, using the federal exemptions might allow him or her to protect more of his personal property than if limited to the Oregon exemptions.

New MSA and HSA Exemption

The new law also adds an exemption for all funds in health savings accounts and medical savings accounts.

(For more articles on filing for bankruptcy in Oregon, visit Nolo’s Oregon Bankruptcy Information topic area.)