Is Chapter 7 Bankruptcy Right for You?

When debt becomes overwhelming, it can feel like there’s no way out. The phone calls, the bills, the threats of repossession—it’s a heavy burden. For many people in Oregon, Chapter 7 bankruptcy offers a legal path toward relief and a financial reset.

At Arellano Law Firm PC, we help individuals and families in Hillsboro and the Portland Metro Area understand whether Chapter 7 bankruptcy is the right solution—and guide them through every step of the process with compassion and clarity.

What Is Chapter 7 Bankruptcy?

Chapter 7 is also known as “liquidation bankruptcy” because it allows you to eliminate most unsecured debts, such as:

Credit cards
Medical bills
Payday loans
Personal loans
Utility bills
Judgment debts

In exchange, some non-exempt assets may be sold to pay creditors—but many people keep most or all of their property through Oregon’s exemption laws.

Who Qualifies for Chapter 7?

To qualify, you must pass the “means test,” which compares your income to the state median. If your income is below the median—or your disposable income is too low to pay creditors—you may be eligible.

You may also qualify if you:

Have little to no disposable income after paying necessary expenses
Are behind on unsecured debts with no realistic way to repay
Are facing wage garnishment, repossession, or foreclosure

Before filing, you’ll be required to take a credit counseling course through an approved provider.

Benefits of Filing Chapter 7

Stops collection efforts (calls, lawsuits, wage garnishment)
Discharges most debts in as little as 3–4 months
Offers a clean slate to rebuild your financial future

Protects your peace of mind and gives you room to breathe.

Is It the Right Option?

Chapter 7 may not be ideal if:

You have significant assets you wish to protect
You’re behind on a mortgage or car loan and want to keep the property
You have debts that can’t be discharged (e.g., student loans, child support)

We can help you assess your situation and explore alternatives if needed.

Need a Fresh Start? Let’s Talk.

You don’t have to face financial stress alone. Contact Arellano Law Firm PC today for a confidential consultation. We’ll help you understand your options—and your rights.

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Is Chapter 7 Bankruptcy Right for You?