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What are exemptions?

If you are a debtor, you are entitled to protect your equity in certain property, known as "assets,” from becoming part of your bankruptcy estate. In other words, it will not be used to pay creditors through your bankruptcy case.

The types of exemptions and how much of the property is exempt are determined by federal law (the Bankruptcy Code) or state law.

Note that if the unsecured value of an asset exceeds the value of your exemption, then it can be sold by the trustee and only the exempt amount returned to you.

Additionally, if an item is otherwise exempt, it does not eliminate the interests of a secured creditor. For example, if you own a car or a house that was purchased with a loan from a bank or credit union and the debt is not paid off, your equity (market value less the balance owing) is exempt up to the amount allowed by law, but you will still have to continue to pay for the car or house or the creditor can repossess it.

Debtors filing in Oregon may elect to use the exemptions provided by federal law or those provided by state law, but not both.  In other words, all of a debtor's claims of exemption must come entirely from either the state or federal list.

For more information, please read the section entitled "Property You Can Keep (Exemptions)" in the document below.

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For Debtor