If you’re facing overwhelming debt in Oklahoma, Chapter 7 bankruptcy may offer the financial relief you need. Also known as “liquidation bankruptcy,” Chapter 7 allows qualifying individuals to discharge most unsecured debts and get a fresh start. While the idea of filing for bankruptcy may seem intimidating, understanding the process can help you take control of your financial future.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a federal process that allows individuals to eliminate most unsecured debts, such as:
- Credit card debt
- Medical bills
- Personal loans
- Utility bills
- Certain civil judgments
In exchange for this discharge of debt, a court-appointed trustee may sell some of your non-exempt property to repay creditors. However, most people who file in Oklahoma keep all or most of their property thanks to state exemption laws.
Who Qualifies for Chapter 7?
To qualify, you must pass a means test—a formula that compares your income to the median income in Oklahoma for a household of your size. If your income is below the median, you’re typically eligible.
However, if your income is higher, you may still qualify after deductions for expenses like housing, food, and transportation. If not, you may need to consider Chapter 13 bankruptcy instead.
The Chapter 7 Process in Oklahoma
- Credit Counseling – You must complete a court-approved credit counseling course within 180 days before filing.
- Filing the Petition – You file bankruptcy forms with the appropriate federal bankruptcy court.
- Automatic Stay – Once you file, the court issues an automatic stay, stopping creditor collection efforts, wage garnishments, and lawsuits.
- Trustee Appointment – A bankruptcy trustee is appointed to oversee your case and liquidate non-exempt assets, if any.
- 341 Meeting (Meeting of Creditors) – You must attend a short meeting with your trustee to answer questions under oath. Creditors may also attend but rarely do.
- Discharge – If there are no complications, you will typically receive a discharge of eligible debts within 3 to 4 months.
Property Exemptions in Oklahoma
Oklahoma law allows you to protect certain assets during Chapter 7, including:
- Your primary residence (homestead exemption)
- One vehicle per licensed driver in your household
- Clothing, furniture, and certain personal items
- Retirement accounts and pensions
- Tools of the trade (up to a certain value)
These exemptions help most filers keep the property they need to rebuild after bankruptcy.
Debts That Cannot Be Discharged
Chapter 7 does not erase every kind of debt. The following are generally not dischargeable:
- Student loans (with very limited exceptions)
- Child support and alimony
- Certain tax debts
- Criminal fines and restitution
- Debts incurred by fraud
Claremore Bankruptcy Attorneys
Filing Chapter 7 bankruptcy can be life-changing, but it’s also a serious legal process that requires careful preparation. An experienced Oklahoma bankruptcy lawyer can evaluate your case, protect your assets, and help you understand your rights and options every step of the way. If you’re filing or considering filing bankruptcy, call us at Claremore Attorneys by calling 918-379-4872 or online for a consultation.
