Exempt vs. Non-exempt Property under Chapter 7
The term exemption refers to the amount of certain types of property that cannot be liquidated for the purpose of satisfying creditors. The public policy behind exemptions is that filing for bankruptcy should not leave the debtor in a position of total destitution, as everyone needs certain basics in order to live properly.
However, Oklahoma, like every other state, has lists and schedules of certain types of property that are exempt and the amounts attached to each form of exempt property. Examples of the types of property that can be exempted from liquidation to a certain value include:
- Motor vehicles
- Clothing
- Livestock
- Injury claims
- Homestead
- Pensions
- Tools of trade
The amounts associated with each of these examples can change from time to time, which is why much of any exempt property you can keep. In addition, anything not mentioned by Oklahoma law as exempt is generally treated as non-exempt property, which means it could be ordered sold/liquidated with the proceeds of the sale going to pay off your creditors.