As Americans continue to be burdened with financial debt in the face of a struggling economy, more and more are considering filing bankruptcy to relieve their debt. In fact, the number of people who have filed for bankruptcy in the United States has multiplied over the past four years. In Oklahoma in particular, the number of bankruptcy filings has skyrocketed from 8,742 in 2007 to 14,486 in 2010. Bankruptcy laws in Oklahoma are designed to help people who need assistance in repaying creditors, rather than spending the rest of their lives under the overwhelming burden of unpayable debt. If you are thinking about filing bankruptcy in Oklahoma, it’s important to know about how the process works and how Oklahoma bankruptcy laws may affect your case. Contact the Oklahoma City bankruptcy attorneys at Oklahoma Legal Center today to schedule an initial consultation.
Chapter 7 Bankruptcy
Filing under Chapter 7 bankruptcy allows you to eliminate most unsecured debts in a matter of months in return for giving up all “non-exempt” property. Chapter 7 bankruptcy is generally known as a “liquidation” bankruptcy because it functions by liquidating your eligible assets and using the proceeds to pay back your creditors. After any eligible assets have been liquidated and creditors have been paid, you would typically be discharged of all other consumer debts. After the bankruptcy discharge, you would no longer be legally responsible for repaying the debt.
The U.S. government recently passed a law called the “means test,” which prevents consumers who can actually afford to repay their debts from abusing the bankruptcy system. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 requires a means test for all Chapter 7 bankruptcy filers who make more than the median income in their state. If you make more than Oklahoma’s median income and your average monthly disposable income over the next five years is more than $100, then you will fail the means test and will not be eligible to file Chapter 7 bankruptcy.
Chapter 13 Bankruptcy
Under Chapter 13 bankruptcy, a three- to five-year repayment plan is established, under which you can repay your creditors. If your income is below Oklahoma’s median income, it is likely that you will be approved for a three-year repayment plan. During the process of a Chapter 13 bankruptcy filing, you will make a single monthly payment to your bankruptcy trustee who then divides and delivers payments among your creditors. Many people file Chapter 13 bankruptcy because they are not eligible to file Chapter 7 due to their income, or if they have assets that they want to keep, such as their home.
Bankruptcy laws in the United States allow individuals to file Chapter 13 bankruptcy as long as their unsecured debts are less than $360,475 and their secured debts are less than $1,081,400. Individuals that are self-employed can also file Chapter 13 bankruptcy as long as their business is not incorporated. Once you file your Chapter 13 bankruptcy petition, you will have fifteen days to file your repayment plan if it wasn’t filed with your petition. Once your plan is confirmed, your trustee will disburse your payments to each of your creditors. If you fail to make your monthly payments, your case could be dismissed or it could be converted to a Chapter 7 bankruptcy case.
Contact an Oklahoma City Bankruptcy Attorney for Help
Once you have made the decision to file bankruptcy in Oklahoma, you will have to determine which type of bankruptcy you qualify for. Overall, Chapter 13 bankruptcy allows individuals to pay off debts over the course of three to five years, while Chapter 7 bankruptcy allows for a discharge of all debt. If you or a loved one is suffering from significant financial difficulties, you may be eligible to file Chapter 7 or Chapter 13 bankruptcy in Oklahoma to help you pay off your debts. Before making any decisions regarding bankruptcy filing, contact an experienced Oklahoma City bankruptcy attorney to discuss your options and seek financial relief from your overwhelming debt.