Oklahoma City Bankruptcy Lawyers - Chapter 7 Bankruptcy

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Oklahoma Bankruptcy Provides Solutions to Financial Stress

The American economy is struggling through the worst recession in more than 70 years, and these economic times have hit everyone hard. Oklahoma has not been spared from this outbreak of financial trouble, and as a result many people are looking for somewhere to turn for help but feel that there are no viable options for relief.

Fortunately, nearly every financial situation, no matter how dire it seems, presents options for solutions. In many cases, a worthwhile approach is to file for consumer bankruptcy protection under Chapter 7 of the United States Bankruptcy Code. Below you will find information regarding Chapter 7 filings overall, the new bankruptcy laws enacted in 2005, the concept of the discharge of debts under Chapter 7 filings, exempt versus non-exempt property under this chapter and finally how you should proceed if you need help putting your financial problems behind you.

Chapter 7 Filings by Oklahoma City Bankruptcy Attorneys

Filing under Chapter 7 of the United States Bankruptcy Code is generally known as a ‘liquidation’ bankruptcy because of the manner in which the person filing – known as the debtor – must deal with his or her assets in order to at least partially satisfy outstanding debts. It is the most common type of filing, and the vast majority of those who file under Chapter 7 file for individual consumer bankruptcy.

A filing under this chapter basically takes all of the debtor’s assets and liabilities into account and sends them to the Bankruptcy Court in the form of schedules that are reviewed by the court and by the creditors named on the bankruptcy petition. The debtor and the creditors have a hearing in which any problems with the case are brought up, and if there are no problems, the court should ultimately issue a discharge of debts upon the liquidation of any remaining assets. This means that the debts no longer exist in a legal sense and do not need to be repaid in full.


Hiring an Oklahoma City Bankruptcy Attorney

If you are experiencing serious financial problems, you need professional help to see your way past them. As noted above, bankruptcy filings can be complicated under Chapter 7 of the Bankruptcy Code, so contact the Oklahoma bankruptcy attorneys at Atkins & Markoff today to schedule an initial consultation.
 

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Chapter 7 Property Exemptions

Once Bankruptcy Has Been Filed, Your Property May be Subject to Liquidation. These Types of Assets May Not be Taken From You:

  • Motor Vehicles up to $3k
  • Your Homestead
  • Retirement and Pension Plans
  • Insurance Benefits
  • Clothing up to $4k
  • Burial Plots
  • Furniture
  • Health Aids and Food
  • Tools of Trade
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Oklahoma City Bankruptcy Attorneys

Reasons to File Chapter 7 Bankruptcy

If You Are Considering Bankruptcy, Chapter 7 May be the Best Option if These Situations Apply:

  • You are Unemployed or Have no Substantial Income
  • Large, Unpayable Medical Bills are Owed
  • Your Credit is Seriously Overextended
  • Marital Problems are Effecting Your Financials
  • You Have Incurred Other Large, Unexpected Expenses

  • Consumer Protection Act

  • Debt Disharge

  • Exempt and Non-Exempt Property

  • The Bankruptcy Abuse Prevention and Consumer Protection Act

    The Bankruptcy Abuse Prevention & Consumer Protection Act Unfortunately for many who have struggled with their finances, the laws regarding filing for bankruptcy changed in 2005, and the immediate effect of these changes was to make it more difficult for consumers to file for bankruptcy protection under this chapter and to discharge their debts. The law was and remains extremely controversial. Critics of the law have stated that it’s an enormous positive for credit card companies.

    Basically, the Bankruptcy Abuse Prevention and Consumer Protection Act affected all Chapter 7 filings in terms of extra steps involved with determining the eligibility for protection under this chapter and placing conditions on the debtor before debts are discharged.

    The extra steps involve obtaining credit counseling before filing and completing a personal finance management course prior to the debts being discharged. The real difficulty was presented by the means test. This test basically states that if a person filing for protection under this chapter earns an income that’s less than the state’s median number, he or she is eligible to file for protection under Chapter 7 of the Bankruptcy Code. However, if the income is above that number, the means test applies, and it is quite confusing.

    Basically, if the debtor’s projected disposable income, which is monthly income minus certain allowable expenses, over the next five years is less than $6,000 ($100/month) he or she would be eligible to file under Chapter 7. If the debtor’s monthly income at the time of filing minus the allowable expenses and multiplied by 60 (the number of months for the next five years) is more than the lesser of 25% of the debtor's non-priority unsecured claims in the case or $6,000, whichever is greater; or $10,000, the court will presume that abuse exists. While special circumstances can still be offered for eligibility, this ‘presumption of abuse’ allows either for the dismissal of the case or a conversion of the case to either a Chapter 13 or a Chapter 11 filing.

    Filing under Chapters 11 or 13 will mean that generally, the creditor will see more of the debt paid back, but all told, these new requirements only affect approximately 15% of all filings under Chapter 7 of the United States Bankruptcy Code.

  • Debt Discharge under Chapter 7

    When a debt is discharged under Chapter 7, it means that the debt is in effect wiped away and no longer exists. Therefore, the debtor does not need to continue to pay it off. Basically, this is the goal of any Chapter 7 filing, as the reason the case was filed in the first place was due to an inability to pay these bills and debts.

    However, as stated above, there are now a few additional requirements in place in order for a discharge to be granted by the court, and these steps include the completion of both the credit counseling program and the personal financial management courses. While these steps may cost a bit more than just the petition and can extend the time until discharge is granted, they should not by themselves ever be a reason to deny the discharge.

  • Exempt vs. Non-exempt Property under Chapter 7

    The term exemption refers to the amount of certain types of property that cannot be liquidated for the purpose of satisfying creditors. The public policy behind exemptions is that filing for bankruptcy should not leave the debtor in a position of total destitution, as everyone needs certain basics in order to live properly.

    However, Oklahoma, like every other state, has lists and schedules of certain types of property that are exempt and the amounts attached to each form of exempt property. Examples of the types of property that can be exempted from liquidation to a certain value include:

    • Motor vehicles
    • Clothing
    • Livestock
    • Injury claims
    • Homestead
    • Pensions
    • Tools of trade

    The amounts associated with each of these examples can change from time to time, which is why much of any exempt property you can keep. In addition, anything not mentioned by Oklahoma law as exempt is generally treated as non-exempt property, which means it could be ordered sold/liquidated with the proceeds of the sale going to pay off your creditors.

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