When you face overwhelming debt, bankruptcy can offer a fresh start. It’s a legal way to address financial problems when you can’t pay back what you owe. This process can help you clear or manage your debts under the protection of a federal court. Most of your bankruptcy options in the United States are governed by federal law. Two common types of bankruptcy options are available for individuals in Oklahoma: Chapter 7 and Chapter 13. Each type serves different needs and comes with its own set of rules. For more legal information, check out our Tulsa County Law Blog.

Chapter 7 Bankruptcy: Liquidation

Chapter 7 bankruptcy might be right for you if you need a quick way to eliminate unsecured debts such as credit card debt or medical bills. In this type, a trustee will execute sales of your non-exempt assets in order to pay off your creditors. It’s important to understand that while Chapter 7 can free you from many types of debts, you might have to give up some of your property.

In Oklahoma, you can choose between state exemptions or federal exemptions to protect your assets. Oklahoma’s exemptions typically allow you to keep primary assets like your home and car, provided they fall within certain value limits. For example, your home’s equity must not exceed a certain amount, and your vehicle’s equity is capped at another amount.

Chapter 13 Bankruptcy: Reorganization

If you have a regular income and want to keep your property, Chapter 13 bankruptcy could be a better choice. This type of bankruptcy allows you to reorganize your debts and pay them over three to five years. If you successfully complete the payment plan, the courts can discharge your remaining unsecured debt.

Chapter 13 is particularly useful if you are behind on a mortgage or car loan and want to avoid foreclosure or repossession. This method lets you catch up on missed payments over time, while still making current payments as they come due.

The Process of Filing for Bankruptcy in Oklahoma

Going through your options for filing bankruptcy in Oklahoma involves several steps. First, you must gather financial documents that show your income, debts, and transactions. Next, you attend credit counseling from an approved agency within six months before filing your petition. When you file, you must provide your financial records, a list of all assets and liabilities, a breakdown of your living expenses, income, and a certificate of credit counseling. The court then appoints a trustee to handle your case, who will review your assets and debts.

Meeting of Creditors

After filing, there will be a meeting of creditors, often called the 341 meeting. During this meeting, the trustee and creditors ask you questions under oath about your finances and the information filed in your petition. This allows the trustee and creditors to gain an understanding of your financial status, which is essential for the bankruptcy process. This meeting is typically straightforward but helps to clarify any discrepancies or concerns regarding the execution of the bankruptcy plan.

Life After Bankruptcy

Bankruptcy can stay on your credit report for up to ten years. However, start improving their credit scores earlier. By creating and sticking to a budget and gradually building up your credit again, you can recover financially. These actions help demonstrate to creditors that you are managing your finances, which can positively affect your credit score. Ultimately, through persistence and financial management, you can significantly mitigate the long-term impacts of bankruptcy and pursue future financial stability.

Bankruptcy Costs

Filing for bankruptcy also involves certain costs. The fees depend on the type of bankruptcy you file for. For Chapter 7, there is a filing fee, administrative fee, and a trustee surcharge. Chapter 13 fees are generally higher. You must also pay for mandatory credit counseling and financial management courses. While these fees can be discouraging, they are a part of the process that can help lead to financial stability.

Tulsa Bankruptcy Lawyer

While options for bankruptcy can provide relief, it’s important to consider all aspects before deciding to file in Oklahoma. Each type of bankruptcy has different benefits, risks, and financial consequences. Understanding the specifics of the different types can help you decide the best way to approach your financial situation.

With a clear understanding of your options and the effects of bankruptcy, you can make informed decisions to regain control of your financial health. A Tulsa bankruptcy lawyer can provide you with clarification and guidance through the bankruptcy process, ensuring you make the right choices for your situation. If you’re considering bankruptcy, contact Tulsa County Lawyers Group by calling (918) 379-4864 or contacting us online for a consultation with an attorney.