An Oklahoma Chapter 7 Gives All Your Debts and in Exchange, Give up All Your Assets up to the Value of What You Owe of Course
Video Transcribed: Oklahoma Bankruptcy Attorney Edward Kelley here, answering your bankruptcy questions with oklahomacitybankruptcyattorney.pro. We started the series with an overview of all the chapters of bankruptcy in honor of this uniquely good time to file.
Talked a little bit about how bankruptcy filings are going through the roof. Obviously everyone else thinks in a similar way, particularly business bankruptcies. Chapter 11s may be at an all time high or certainly high for in recent memory. I’m doing an overview of all the different options.
Today the first one, Chapter 7, your basic personal liquidation bankruptcy. You qualify by your income meeting certain guidelines based on your household size and your gross income. That’s your gross, not your net. Not what you bring home, but how much you make before deductions. For example, it varies completely by district in accordance with the IRS standards, which change periodically.
For example, right now in Oklahoma, for one person, you’re somewhere up around 40,000’s, at about 10,000 for each one. It’s supposed to be geared for cost of living and the typical income in your region for that household size. If you qualify there … If you’re over that, then there’s a presumption of abuse is what they, the technical term and you have to do a 13, unless your expenses can bring you down.
That’s not an absolute cap by any means, but if you’re too far over it, you’re in dangerous ground trying to do a seven. An Oklahoma Chapter 7, basically give it all your debts and in exchange, give up all your assets up to the value of what you owe of course. They don’t take more than what you owe.
Leaving aside anything that’s exempt, which that’s the big question. What’s exempt? That varies by state. In Oklahoma, you can’t use the federal exemption, so you got ours and that is basically your home and virtually unlimited value within city limits on less than an acre. If you’re over an acre in city limits, got problems. Talk to your attorney about that.
Outside city limits, you’ve got a much larger acreage. I won’t go into all those details, but definitely contact your attorney about your home exemption. Oklahoma is one of the better ones though. A lot of States it certainly to me doesn’t seem fair what they allow you as an exemption compare with other states. Oklahoma is a good one so you’re lucky in that sense. Your car up to 7,500 value. If you owe 20, it’s worth 275. You’re okay.
Take what you owe … take the value minus what you owe. That’s your equity. Same as you would with real estate. You got 7,500 a piece. If it’s a married couple, each of you get 7,500. Can’t split that. You get up to 7,500 for one vehicle per person.
Most of your household stuff is going to be exempt, but if you’ve got bank accounts with money in them that aren’t protected, IRAs or retirement accounts which are exempt, then that’s up for grabs. Tax refunds up for grabs, except for earned income credit. Stocks, bonds, all that, not exempt.
Definitely get with your attorney when you start the process and list all your assets. Boy, you sure don’t want to hide them because if they find you, you can get into some big trouble. Defrauding the federal government, never a good idea.
Go through the process, 30 days, have a meeting your creditors with a panel trustee. That’s a private attorney who’s moonlighting to work for the trustee’s office. I tell everyone as long as you’re truthful and brief, you can’t really go wrong in a creditors meeting. 60 days after that, you get your discharge assuming nothing goes wrong. In that time, that 60 days, you’ll want to file any re-affirmations, meaning any loans that you want to survive the bankruptcy. There’s your quick overview Chapter 7.