The State of Oklahoma has very good exemptions compared to other states. Exemptions define the property that a person filing for bankruptcy in Oklahoma can keep and still discharge their debts. One such exemption is that the debtors in bankruptcy can exempt up to $7,500 of equity in a vehicle. This means you can keep your car if its fair market value minus the debt owed on it is $7,50o or less. When you file a bankruptcy you have to disclose all the vehicles that you have and what their value is. Then you attach the exemption to protect them. In my experience as a bankruptcy practitioner, I have come across some issues for which I have sought out answers from high places. I have the following on pretty good authority:
First, at least in the Northern and Eastern Districts of Oklahoma, you can aggregate the vehicle exemption of two joint-debtors. In layman’s terms this simply means that if a husband and wife file a joint Chapter 7 bankruptcy case and only have one vehicle that is valued over $7,500, you can apply both parties’ exemptions covering a whopping $15,000 worth of a vehicle.
Secondly, the way to put a value on your vehicle is to first use Edmonds as opposed to Kelly Blue Book or even NADA. You will not use trade-in value but you will value the vehicle somewhere in between private party value and retail value.
Third, because a trustee has to be able to make money on the sale of a vehicle that is worth more than the exemption, it would have to be worth between $10,000 and $12,000 or more to be worth the trustee’s time.
So, as you can see, what the law says and what is true in practice can sometimes be different. Therefore, if you are in need of debt relief and are considering a chapter 7 bankruptcy in Oklahoma, you need an attorney that knows both the law and the practice.