The Dos and Don'ts of Discharging Debt in Bankruptcy in Oklahoma

Wiping the Slate Clean

Video Transcribed: Hi everybody, Edward Kelly here, your Oklahoma bankruptcy attorney with another 3 Minutes to Financial Freedom, wrapping up our 5-part series on what kind of debts will I see in my bankruptcy and what can I do with them.

So the final wrap up, you’ve got unsecured debts, those are medical bills, signature loans, credit cards, basic, no collateral. The creditor basically took the risk when they extended it to you and they’re going to be out of luck. And a 7 gets discharged, and a 13 only gets paid after everyone else has been paid and only to the extent you can afford to do so. The rest gets discharged.

Secured, collateral tied to it. So those debts are secured up to the value of the collateral and sometimes beyond. If you bought a car within a little less than the last 3 years, you’re stuck with the whole note even if the car is not worth enough to cover it. If it’s older than that, you can probably do what’s called bifurcate, which you can do with everything else except for your home. Another special case we’ll talk about another time. But everything else you can bifurcate. Separate what it’s worth. That’s the only extent that the whole debt is secured.

So next we’ve got non-priority unsecured debts. We talked about student loans, not dischargeable even though there’s no collateral. Child support is not dischargeable in any way even though there’s no collateral. Taxes. Dischargeable, regular unsecured if they’re 3 years or older. Three years or less, and by that I mean when they were filed, not the year that they’re owed. If you didn’t file 20 years of taxes until today, you’re going to have to wait 3 years until any of those are dischargeable. Taxes. Three years or less, not dischargeable. Four years or more, dischargeable and administrative.

So we also talked about what’s my job? My job is to maximize the benefit to you. So particularly in a 13, we want to organize the payment of the debts in your Chapter 13 plan over that 5 years to pay off more of what you’re going to have to pay anyway and discharge more of what you can discharge. And that’s my job and we went into that in some detail.

So those are the kind of debts that you’ll see in your bankruptcy and that’s what we can do with them. That’s a general overview, but we’ll return to these concepts and questions again and again in our continuing series, 3 Minutes to Financial Freedom.

As always, you can reach me, an Oklahoma City debt collection lawyer, at oklahomacitybankruptcyattorney.pro or call me at (405) 563-7888.