Property exemptions exist to protect individuals in impossible debt situations from losing everything and being unable to rebuild their financial foundation. While Chapter 7 bankruptcy allows the liquidation of some property in order to pay down debt before it is erased completely, it also allows a number of types of property to be exempt from such liquidation.
State exemption standards take precedence over federal exemption allowances in Oklahoma, generally providing more protection. In addition, those exemptions may be doubled when a married couple file for bankruptcy jointly.
How to Keep Your Car
State and federal exemptions differ in this area:
- Federal exemption – $3,225
- Oklahoma state exemption – up to $7,500
If the debtor still has a balance on their vehicle debt, and the debt is secured by that vehicle, they should continue to make those payments. If they fail to do so, or to reach some other agreement with the creditor, the vehicle may be repossessed to satisfy the creditor’s lien.
How to Keep Your Home
- Federal homestead exemption - $20,200
- Oklahoma state exemption – unlimited
value for real property or manufactured homes
- Property cannot exceed 160 acres if outside a city or town, or 1 acre within city or town limits
- The homestead may be rented out as long as the filer does not obtain additional homestead property
- Exemption may be limited to $5,000 if over 25% of the improved land area is used for business
If any homestead property is mortgaged and secured by that property, the homeowner should continue to make their payments. If not, and the homeowner misses payments or defaults, the creditor may foreclose on the property.
Oklahoma allows exemptions for other forms of personal property:
- Burial plots
- Clothing – up to $4,000
- Furniture, books, portraits, health aids, pictures
- Food – to last up to 1 year
- 2 bridles, 2 saddles, 100 chickens, 20 sheep, 10 hogs, 5 cows and calves under 6 months, 2 horses, and forage to last 1 year
- Guns for household use – up to $2,000
- Anniversary & wedding rings – up to $3,000
- Household and kitchen furniture, personal computer and related equipment
- Prepaid funeral benefits
- Personal injury, worker’s compensation, and wrongful death recoveries – up to $50,000 total
- Tools of the trade – tools, apparatus of trade, books, husbandry implements to farm homestead – up to $10,000 total
Filing Schedule C of a Bankruptcy Petition
Property exemptions taken under Oklahoma state laws must be listed on a Schedule C form, which must be included in a bankruptcy petition. The form includes these details:
- The property claimed
- The Oklahoma statutes substantiating the claims for that property
- The property exemption value for each claim
- Each claim’s current assessed value (not the market value)
Talk to a Bankruptcy Lawyer First
With new requirements under bankruptcy reform statutes in recent years, and the detailed requirements under state exemption specifications, it can be vital to consult a bankruptcy attorney to ensure that debtors have made the best choices for their financial future, and that they have completed all the required steps to receiving the greatest benefit from their bankruptcy petition.
