Bankruptcy in Oregon (2026): Exemptions & Means Test

Oregon is one of the states that gives bankruptcy filers a choice: you can use Oregon's own exemptions or the federal bankruptcy exemptions, whichever protects more of your property. Bankruptcy itself is federal law, but the exemptions that decide what you keep, and the means-test income that decides which chapter you can use, are state-specific. Oregon's homestead and personal-property exemptions were sharply increased by Senate Bill 1595 (2024), effective for most debts on January 1, 2025, and the homestead now adjusts for inflation each year, so confirm the current figures before relying on them.

This page is general legal information, not legal advice. It is part of our Bankruptcy by State series.

Does Oregon use state or federal bankruptcy exemptions?

Oregon is not an opt-out state. A debtor who files bankruptcy in Oregon may elect to use the Oregon exemptions in ORS 18.395 and ORS 18.345, or instead claim the exemptions allowed under federal law in 11 U.S.C. 522(d). In practice that means an Oregon filer picks one of two complete menus: the state list or the federal list. You cannot mix items from both. About a third of states, including Oregon, allow this choice; roughly two-thirds have opted out and force filers onto state law only.

The choice usually turns on home equity. After the 2024 increases, Oregon's state homestead is far larger than the federal one, so homeowners with meaningful equity often choose the state set, while renters and filers with little home equity sometimes prefer the federal set because of its larger wildcard. Married couples filing jointly can generally each claim a full set of whichever system they choose, which often doubles the protected amounts.

Oregon homestead exemption

Oregon's state homestead exemption is the headline protection for homeowners. Senate Bill 1595, signed in April 2024 and operative January 1, 2025, raised the homestead amount in ORS 18.395 from the old figures of $40,000 single and $50,000 combined to $150,000 for a single owner and $300,000 combined for two or more members of a household who are debtors. The statute provides that the homestead amount is adjusted for inflation, with the recalculated figure taking effect each July 1, so the protected amount for a 2026 filing may be somewhat higher than the base numbers.

There is an important carve-out. The increased amounts do not apply to debts arising from child support, spousal support, or criminal restitution. For those specific debts, the homestead exemption remains the older $40,000 for a single owner and $50,000 combined, and those carve-out figures are not adjusted for inflation.

A filer who would rather use the federal system protects up to $31,575 of home equity under 11 U.S.C. 522(d)(1). Homestead protection covers equity, not the full value of the home, so a residence worth far more than the mortgage plus the exemption can leave non-exempt equity that a Chapter 7 trustee may reach. That is one reason homeowners with substantial equity often look at Chapter 13 instead.

Vehicle, wildcard, and personal-property exemptions

Oregon's personal-property exemptions in ORS 18.345 were also expanded by Senate Bill 1595. The main categories include:

• Motor vehicle: up to $10,000 of equity in one vehicle for ordinary debts, reduced to $3,000 when the debt is for support or restitution.
• Wildcard: up to $400 of interest in any personal property, which cannot be used to increase another exemption.
• Household goods, furniture, and similar items held for personal or family use: up to $3,000.
• Tools of the trade and professional property needed to earn a living: up to $5,000.
• Books, pictures, and musical instruments: up to $600, and wearing apparel, jewelry, and other personal items: up to $1,800.
• Wages: at least 75 percent of disposable earnings are protected from garnishment under ORS 18.385, and retirement accounts are protected under separate state and federal exemptions.

Filers who need a larger wildcard sometimes choose the federal exemptions instead, because 11 U.S.C. 522(d)(5) provides a wildcard of $1,675 plus up to $15,800 of unused homestead exemption. Because several Oregon figures now index for inflation, confirm the current amounts before filing.

The Chapter 7 means test in Oregon

The means test screens who can file Chapter 7. The first step compares your household's current monthly income, annualized, to the median family income for an Oregon household of the same size. If your income is at or below the Oregon median, you generally pass and may proceed with Chapter 7. If it is above the median, you complete the longer calculation that subtracts allowed expenses to see whether you have disposable income that should fund a Chapter 13 plan instead.

The U.S. Trustee Program publishes the median figures and updates them periodically. For cases filed on or after April 1, 2026, the Oregon median family income is:

Add $11,100 for each additional person beyond four. These figures apply only to cases filed on or after April 1, 2026. The U.S. Trustee Program revises the median income data roughly twice a year, so confirm the current numbers for your filing date.

Chapter 7 vs. Chapter 13 in Oregon

Chapter 7 is a liquidation. A trustee can sell non-exempt property to pay creditors, but because Oregon's exemptions now protect most household property and a large amount of home equity, many Chapter 7 cases are "no-asset" cases where nothing is sold. Most remaining unsecured debt, such as credit cards and medical bills, is discharged in a few months.

Chapter 13 is a reorganization for filers with regular income. You keep your property and repay some or all of what you owe through a three-to-five-year plan. Chapter 13 is often chosen by homeowners who are behind on a mortgage, because the plan can spread out the missed payments and stop a foreclosure while you catch up.

In both chapters, filing triggers the automatic stay under 11 U.S.C. 362. The stay immediately halts most collection activity, including foreclosure sales, wage garnishment, repossession, and collection calls, while the case proceeds.

Where you file bankruptcy in Oregon

Oregon is a single federal judicial district, so all Oregon bankruptcy cases are filed in the U.S. Bankruptcy Court for the District of Oregon. The court has offices in Portland and Eugene, and which office handles your case depends on the county where you live. Before filing, federal law requires you to complete an approved credit-counseling course, and you must complete a debtor-education course before your debts are discharged.

What bankruptcy can and cannot do

Bankruptcy discharges most unsecured debts, but several categories generally survive: most student loans (absent a separate showing of undue hardship), recent income taxes, child support and alimony, and debts from fraud or willful injury. Secured debts like a car loan or mortgage continue if you want to keep the collateral and keep paying.

Because exemption amounts change, and the choice between the state and federal exemption menus and between Chapter 7 and Chapter 13 depends on your full financial picture, many people consult a licensed Oregon bankruptcy attorney before filing.