Rule 7.050.Effect of Bankruptcy Petition

Current through August 1, 2026 · Last verified September 12, 2026

In one sentenceUTCR 7.050 tells an Oregon circuit court to stay an action once it learns of a federal bankruptcy stay, lets it sever the still-stayed claim and proceed with the rest, and bars dismissal based on the bankruptcy filing alone.

Full Text of Rule 7.050

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(1) Upon notice that proceedings in an action are subject to a federal bankruptcy stay, the court must stay the action until it is shown to the court’s satisfaction that the federal bankruptcy stay has been terminated or is not applicable to the action.

(2) Upon motion of any party, the court may sever a claim that continues to be subject to the federal bankruptcy stay or a claim as it applies to the bankruptcy debtor and proceed with the remainder of the action if:

(a) The action includes multiple claims or multiple parties; and

(b) It is shown to the court’s satisfaction that, as to one or more claims, the federal bankruptcy stay has been terminated or is not applicable.

(3) A court must not dismiss the action stayed under this rule solely because of the bankruptcy filing. Nothing in this rule limits a court’s ability to initiate the process to dismiss an action stayed under this rule for want of prosecution under ORCP 54 B(3) or as provided by statute. However, if a party to the action responds to the court notice concerning dismissal for want of prosecution by timely application to continue the action because bankruptcy proceedings are ongoing:

(a) The ongoing bankruptcy proceedings constitute good cause to continue the action for purposes of ORCP or statute; and

(b) The court must continue the action as a pending case.

(4) Time periods established by UTCR 7.020 or by Supplementary Local Rule (SLR) for proceeding with an action are not applicable during the stay to that action or part of an action stayed under this rule. For all or part of the action stayed under this rule, time periods held in abeyance under this subsection continue when the court proceeds and only as to that part of the action with which the court proceeds.

(5) Nothing in this section limits a court’s ability to grant dismissal of an action stayed under this rule as provided under ORCP 54 A.

(6) References in this rule to federal bankruptcy stays are to a stay under provisions of 11 USC Sections 105, 362, 1201, or 1301. As provided under UTCR 1.010(3), this rule is applicable to all cases that may be subject to a federal bankruptcy stay, including small claims cases.

End

Plain-English Summary

The trigger is notice. Once the court is told that proceedings in an action are subject to a federal bankruptcy stay, it must stay the action, and the stay holds until someone shows the court that the federal stay has been terminated or does not apply to the action. The rule identifies the stays it means: those under 11 USC sections 105, 362, 1201, and 1301.

A stay does not have to freeze everything. On the motion of any party, where the action involves multiple claims or multiple parties, the court may sever a claim that remains stayed, or a claim as it applies to the bankruptcy debtor, and go forward with the rest, so long as it is shown that the stay has ended or does not apply as to one or more claims.

Dismissal is where this rule does its hardest work. A court must not dismiss a stayed action solely because of the bankruptcy filing. The court may still start the process to dismiss for want of prosecution under ORCP 54 B(3) or by statute, but if a party answers that notice with a timely application to continue the action because bankruptcy proceedings are ongoing, those ongoing proceedings are good cause and the court must continue the action as a pending case. Voluntary dismissal under ORCP 54 A remains available.

The clock also pauses. Time periods for proceeding with an action under UTCR 7.020 or under a supplementary local rule do not run during the stay, and they pick up again only when the court proceeds and only as to the part of the action it proceeds with. The rule reaches every case that might be subject to a federal bankruptcy stay, and UTCR 1.010(3) carries it into small claims cases as well.

Frequently Asked Questions

The other side filed bankruptcy. Does my Oregon case stop?

Once the court has notice that the proceedings are subject to a federal bankruptcy stay, it must stay the action. The stay lasts until it is shown to the court's satisfaction that the federal stay has been terminated or does not apply to the action.

Can part of the case go forward while one party is in bankruptcy?

Yes, on motion of any party. If the action has multiple claims or multiple parties, and it is shown that the stay has ended or does not apply as to one or more claims, the court may sever the stayed claim, or the claim as it applies to the debtor, and proceed with the remainder.

Can the court dismiss my case for want of prosecution during the stay?

Not for the bankruptcy filing alone. The court may still begin the dismissal process under ORCP 54 B(3) or by statute, but a timely application to continue the action because bankruptcy proceedings are ongoing is good cause, and the court must then continue the action as a pending case.

Do the trial setting deadlines keep running during the stay?

No. Time periods set by UTCR 7.020 or by supplementary local rule do not apply during the stay to the action or the stayed part of it. They resume when the court proceeds, and only as to the part of the action the court proceeds with.

Does this rule apply to small claims?

Yes. The rule says so directly, and UTCR 1.010(3) carries it across, applying UTCR 7.050 to all cases that may be subject to a federal bankruptcy stay, including small claims cases.

Source & verification. The rule text is reproduced verbatim from the official Oregon Uniform Trial Court Rules (UTCR 7.050). Prescribed by the Chief Justice of the Oregon Supreme Court (UTCR 1.020). The plain-English summary is original and written by us. Last verified September 12, 2026. · Official source

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