There are several features of bankruptcy proceedings that are present in nearly in every case. The traditional features of bankruptcy proceedings include the trustee, automatic stays, executory contracts and the Meeting of Creditors. The new additions to this list are the Means Test and Credit Counseling, which were both established by the 2005 bankruptcy reforms. What follows is a brief explanation of the main features of bankruptcy in Oklahoma in the order in which they may be encountered.
The bankruptcy reforms of 2005 established the need for debtors to undergo a mandatory credit-counseling course prior to filing bankruptcy. The purpose of this course is to find out if there is away for you to work through your financial difficulties without filing bankruptcy. With Chapter 13 the course will also require you to come up with a proposed plan to repay your debt.
The course must be taken with an approved agency no more than 180 days prior to filing for bankruptcy, and a certificate of completion must be filed no more than 15 days after filing. Additionally, prior to receiving a discharge of your debt under Chapter 13, you will be require to provide proof of having completed a second course in personal finance and money management from an approved provider.
The Means Test
The 2005 reforms also made it more difficult for individuals with higher incomes to file for Chapter 7 bankruptcy. To determine if you qualify to file for Chapter 7 bankruptcy you must first pass a “means test”. The Chapter 7 means test consists of two parts. In the first part your monthly income must be equal to or less than the median monthly income for a household in your state. If it is not, you must pass the second test, which requires your projected disposable income over the next five years to be less than 25% of your unsecured, non-priority debt. If after this you still do not qualify for Chapter 7 bankruptcy, you may elect to file for Chapter 13 bankruptcy.
One of the most important features of every bankruptcy proceedings is the automatic stay. The automatic stay goes into effect immediately after you file bankruptcy and suspends all collection activities against you for the duration of the bankruptcy proceedings, which are three to four months for Chapter 7 and three to five years for Chapter 13. Your creditors however, have the right to challenge the automatic stay and have it lifted by court order.
With the exception of Chapter 11 Bankruptcy, when you file, the courts will appoint a trustee, who will ward over all aspect of your estate for the duration of the bankruptcy proceeding. The responsibilities of the trustee are to conduct the meeting of creditors, evaluate your assets and distribute to your creditors proceeds from the liquidation of your estate.
Executory contracts are contract that you have entered into and are still in force at the time you file for bankruptcy. Examples are business contracts, service contracts, insurance contracts, and most often mortgages and residential leases. The debtor, and ultimately the trustee, has the right to determine which, if any, of these contracts you will walk away from. This has particular significance because the decisions will have an impact on the size and complexity of your bankruptcy estate.
The Meeting of Creditors
Approximately, a month after you file for bankruptcy you will be required to attend a Meeting of Creditors, which is also referred to as a 341 Meeting in Oklahoma. The purpose of this meeting, which is led by the trustee, is to allow the trustee and your creditors to go over your bankruptcy documents and ask questions while you are under oath.
The questions will pertain to the validity of the information that you have provided regarding your assets and your ability to repay your debts. Each creditor will be given the chance to question you. If they don’t like what they hear, they may file an “adversary proceeding” with the court in order to challenge the disposition of your bankruptcy estate. Normally, the Meeting of Creditors is the only meeting you will be required to attend and will rarely be attended by any of your creditors.
Free Consultation: Oklahoma City Ok Bankruptcy Lawyers
If you are considering filing bankruptcy in Oklahoma, you should first understand that it is a long and complicated process. Familiarizing yourself with the main features of bankruptcy can help you insure that you are following the proper procedures and have the greatest chance of success.
To find out more about bankruptcy in Oklahoma, contact a Oklahoma City bankruptcy attorney. For a free confidential consultation about your rights in bankruptcy court and the potential benefits of filing bankruptcy, contact the Debt Line Law Office at (405) 563-7888. If you prefer e-mail, send us your question using the form at the top right of this page and we’ll answer your question as soon as possible.