Filing Chapter 7 Bankruptcy In Oklahoma
Chapter 7 Bankruptcy is called a straight bankruptcy because it is a liquidation of your assets. An individual will give their non-exempt property to a court appointed trustee who converts the assets to cash and redistributes the proceeds to the creditors. The debt will be discharged between four and six months. Many individuals who file Chapter 7 Bankruptcy will have no assets this type of bankruptcy is called a “no asset” case. If you do have property, there are certain assets that will be exempt from the bankruptcy.
Most unsecured debt will be discharged by filing Chapter 7 Bankruptcy including: hospital bills, unsecured personal loans and credit card debt. Individuals, corporations, partnerships and couples may all qualify for Chapter 7 Bankruptcy. Chapter 7 Bankruptcy can be easy, quick and inexpensive.
The first step in Chapter 7 Bankruptcy is to meet with your Oklahoma Bankruptcy Attorney. You bankruptcy attorney will determine if you qualify to file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy. If you qualify for Chapter 7 Bankruptcy, your Oklahoma Bankruptcy Lawyer will file your bankruptcy petition in the bankruptcy court serving your area. In addition to the bankruptcy petition, you attorney will file a schedule of your liabilities and assets, a list of your expenses and income, information about your financial affairs and information about all of your leases and contracts.
After the bankruptcy petition is file, an automatic stay will temporarily force all creditors to stop debt collection efforts. Under Chapter 7 Bankruptcy, a bankruptcy judge may determine there is cause and allow debt collection efforts to continue.
In 2005, the Bankruptcy Abuse Prevention and Consumer Act (BAPCPA) made it more difficult for individuals to qualify to file Chapter 7 Bankruptcy. Individuals now must take a credit counseling course prior to bankruptcy, complete a financial management course prior to the discharge of their debt and pass an income test to qualify for Chapter 7 Bankruptcy.
Under the BAPCPA, you will have to pass an income test to see if you qualify for Chapter 7 Bankruptcy. The income test will measure your monthly income against the median income of other households of similar size in the state of Oklahoma. If the income test determines your income is less or the same as the median income of other Oklahoma residents, you can file Chapter 7 Bankruptcy. If your median income is higher, you must pass additional “means tests”.
The means test is used to figure out if you have enough disposable income after subtracting your expenses such as home mortgage payment, car payment, taxes, child support and tuition (up to $1650) to make payments on your unsecured debt. If you can pay $6,000 or 100 per month over the next 60 months in debt repayment, you may have to file Chapter 13 Bankruptcy. If you can not do this, but you could pay up to 25% of your income toward debt repayment over the next 60 months, you may have to file Chapter 13 Bankruptcy. The goal of the tougher law is to force more individuals with disposable income to make debt payments by filing Chapter 13 Bankruptcy.
State median data is provided by the United States Trustee Program. For the State of Oklahoma, after March 15, 2009, the median income for a single wage earner in the state of Oklahoma was $38,244 and for a family of two it was $51,322. For a family of three it was $54,494 and for a family of four it was $62,049.
The information provided for means testing is general information and should not be considered legal advice. To find out if you can file Chapter 7 Bankruptcy it is important to talk to an Oklahoma Bankruptcy Attorney.
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