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How to File for Bankruptcy in Oklahoma
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Today’s struggling economy is leading new people every day to consider the option of bankruptcy in hopes of being allowed to have a fresh beginning in the financial aspects of their lives. With 3.76 filings for bankruptcy per capita (per 1,000 people) in Oklahoma, the state is averaging overall better than most states. The decision to file for bankruptcy can be very complicated and it is important to know if you will pass the new “means” test to determine financial eligibility, which type of bankruptcy fits your situation the best and how to maximize your exemptions.
Finding a Bankruptcy Attorney
Getting sound financial and legal advice is key when you are contemplating whether or not bankruptcy is the best option. An experienced attorney can provide for both those needs. The attorney can answer all your questions about bankruptcy and the laws surrounding it and will be able to represent you in court before the bankruptcy trustee and the judge, if it becomes necessary to do so. It is very important that you feel comfortable with the attorney/legal office that you choose, so make sure there is a proven track record of good business and experience.
Bankruptcy Options
There are two main types of bankruptcies that must be considered when you are looking into filing:
- For those who have limited to no assets that need protection, Chapter 7 allows for a new start and is the most common choice for people filing for bankruptcy in Oklahoma (83% of filings).
- For those with valuable assets, Chapter 13 allows for an adjustment of debts and arranges debts so that they are paid off within three to five years.
Oklahoma Exemptions
Because most people in Oklahoma file under Chapter 7, it is crucial to know what exemptions you can obtain. Oklahoma does not allow for federal bankruptcy exemptions, but the state exemptions are very charitable compared to other states:
| Homestead | Real property or manufactured home of unlimited value, but cannot exceed 160 acres if not in a city or town, or 1 acre in a city or town. You may rent the homestead as long as you do not acquire another. May be limited to $5,000 if more than 25% of area of improvements is used for business purposes. |
| Personal Property | Burial plots, motor vehicle up to $7,500; clothing up to $4,000; furniture, books, portraits, pictures, and health aids; food to last 1 year; 2 bridles and 2 saddles; 100 chickens, 20 sheep, 10 hogs, 5 cows and calves under 6 months, 2 horses and forage for livestock to last 1 year; personal injury, workers' compensation and wrongful death recoveries up to $50,000 total; college savings plan interest; Deposits made into an Individual Development Account; Federal earned income tax credit; guns for household use up to $2,000; anniversary and wedding rings up to $3,000; household and kitchen furniture; personal computer and related equipment; federal earned income tax credit; prepaid funeral benefits; war bond payroll savings accounts. |
| Wages | 75% of wages earned within 90 days prior to filing bankruptcy. Judge may approve more if you can show hardship. |
| Pensions | Tax exempt retirement accounts; Traditional and Roth IRAs up to $1,095,000 per person; firefighters; disabled veterans; police officers; judges; law enforcement employees; county employees; tax exempt benefits; ERISA-qualified benefits; teachers; public employees. |
| Public Benefits | Crime victims' compensation; unemployment compensation; public assistance and social security; workers' compensation. |
| Tools of the Trade | Tools, books, apparatus of trade, and husbandry implements to farm homestead, up to $10,000 total. |
| Insurance | Assessment or mutual benefits; limited stock insurance benefits; fraternal benefit society benefits; life insurance policy or proceeds if the policy does not prohibit it being paid to creditors; group life insurance policy or proceeds; funeral benefits if pre-paid and placed in trust. |
| Miscellaneous | Beneficiary's interest in a statutory support trust; liquor license; business partnership property. |
Filing the Petition
After the type of bankruptcy is decided upon, all exemption possibilities are exhausted and any other necessary financial counselling requirements are completed, a petition to the bankruptcy court can be issued. The bankruptcy trustee will schedule a meeting of the creditors known as a “341 meeting”. When and if the bankruptcy is granted, the filer will be able to get a new financial start (Chapter 7) or begin paying off existing debts (Chapter 13).
This article is provided for informational purposes only. If you need legal advice or representation,
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Chapter 13 Bankruptcy - Options for homeowners and filers with high income.
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Property and Exemptions in Bankruptcy - Find out how your property is (or is not) protected.
Your Home in Bankruptcy - If you're a homeowner, find out what happens to your house.
Your Car in Bankruptcy - Learn about your options to keep (or surrender) your car.
Using a Bankruptcy Lawyer - Find out if you need a lawyer and how to pick a good one.
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