The Oregon Homestead Exemption

If you're considering filing for bankruptcy, the Oregon homestead exemption will help you protect the equity in your house. This article explains how much the Oregon homestead exemption is and how to apply it in bankruptcy.

How Much Is Oregon's Homestead Exemption?

Oregon lets filers use either the federal exemption system or Oregon's state exemption system. However, you can't mix exemptions from both lists, so you'll want to select the system that will protect your most important assets.

Below are the state and federal exemption amounts and links to extensive federal and state exemption lists to help you make an informed choice.

Protecting Property With the Oregon Homestead Exemption

A debtor can exempt up to $150,000 of the equity in a home or other property that doesn't exceed one block within a town or city limits or 160 acres otherwise. The combined homestead exemption can't exceed $300,000 if two debtors are household members.

Proceeds from the sale of the homestead can be protected for up to one year as long as the debtor is holding the money with the intent to purchase another homestead, pay rent for up to one year, or use it for prepaid rent or security deposits for renters' dwellings or property belonging to military personnel during wartime. (Or. Rev. Stat. §§ 18.385, 13.395, 18.402, 18.428.)

If you hold property as tenancy by entirety with your spouse, or if you move away. One spouse filing for bankruptcy (not both) might prevent the bankruptcy trustee from using the property equity to pay off debts. Also, you might be able to use the homestead exemption if you leave temporarily with the intent to move back in. However, these are tricky areas of law. Before filing, talk with a local bankruptcy attorney to ensure you don't lose valuable property.

Other Requirements for Keeping a Home in Bankruptcy

If you can't protect all of your home equity, you might not be able to keep your home. Typically, the Chapter 7 trustee appointed to your case would sell the house, return the exemption amount to you, pay off the mortgage, and pay creditors with the amount remaining after deducting the trustee's fee.

In Chapter 13, the trustee doesn't sell property, so you could keep it. However, that doesn't mean Chapter 13 filers get a break regarding how much equity they can retain. Instead, you'd need to pay creditors the value of the nonexempt equity through the Chapter 13 plan.

But that isn't all. Keeping your home requires being current on the mortgage when filing for Chapter 7. Otherwise, you could lose it to the lender through foreclosure, possibly even during the Chapter 7 case. If you're behind on payments when filing for Chapter 13, you have an option not available in Chapter 7. You can catch up on the payments over time through the plan.

Learn about other requirements you must meet in Your Home in Chapter 7 and Your Home in Chapter 13. Also, find out why filing for Chapter 13 is better than Chapter 7 when you're behind on payments and don't want to lose your house.

Claiming the Homestead Exemption

When completing your bankruptcy forms, you'll do the following:

• disclose your home on Schedule A/B: Property
• list your home and the homestead exemption law on Schedule C: The Property You Claim as Exempt, and
• if filing for Chapter 7, explain whether you plan to keep or surrender the home on Statement of Intention for Individuals Filing Under Chapter 7.

Because your home is likely your most valuable asset, consider consulting with a bankruptcy lawyer to ensure you can protect it in bankruptcy.

Where to Find the Homestead Exemption Statute

You'll find the exemption statutes on the Oregon State Legislature website. The state updates amounts periodically but not on a particular schedule, and this article isn't being updated in real-time. Be sure to verify the exemption amount's currentness.

When You Can Use Bankruptcy Exemptions

You can file for bankruptcy in Oregon after living there for over 180 days. However, you must live in Oregon for at least 730 days before filing to use the current state's exemptions. Otherwise, you'd use the previous state's exemptions.

If you lived in multiple states during the two years before filing for bankruptcy, you'd use the exemptions of the state you lived in for the majority of the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)

Learn more about filing for bankruptcy after moving to a new state, the current amount of the federal cap, and other essential exceptions to homestead exemptions. Also, spouses can double some exemption amounts if both parties own the property, but not all of them. Learn about other filing considerations for spouses.

Need More Bankruptcy Help?

Did you know Nolo has made the law accessible for over fifty years? It's true, and we wholeheartedly encourage research and learning. You can find many more helpful bankruptcy articles on Nolo's bankruptcy homepage. Information needed to complete the official downloadable bankruptcy forms is on the Department of Justice U.S. Trustee Program website.

However, online articles and resources can't address all bankruptcy issues and aren't written with the facts of your particular case in mind. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.