Can I keep my jewelry if I file for bankruptcy in Oklahoma?

The Oklahoma bankruptcy exemptions allow you to keep wedding rings to $3,000 and possibly a watch or other jewelry item as “wearing apparel.”

If you file for Chapter 7 bankruptcy in Oklahoma, you can keep up to $3,000 worth of wedding or anniversary rings. You may also be able to keep a watch, necklace, or ring using the wearing apparel exemption. If you file for Chapter 13 bankruptcy in Oklahoma, you can keep all of your jewelry. Read on to get the details.

Keeping Jewelry in Chapter 13 Bankruptcy in Oklahoma

In Chapter 13 bankruptcy, often called a reorganization bankruptcy, you enter into a repayment plan for three to five years. Your creditors get paid through the plan – some in full and some in part. Although a Chapter 13 plan requires a long commitment, the advantage is that you get to keep your property, including jewelry. 

If you have very expensive jewelry however, that will probably affect how much you will be required to repay unsecured creditors.

Keeping Jewelry in Chapter 7 Bankruptcy in Oklahoma

Chapter 7 bankruptcy works differently. In Chapter 7, you must give up certain items of property. The bankruptcy trustee sells this property and uses the proceeds to repay (at least in part) your unsecured creditors.

Oklahoma Bankruptcy Exemptions

Not all of your property is up for grabs, however. Oklahoma (and all of the other states) has enacted laws that protect certain types of property. These laws are called exemptions. Some property is exempt no matter what the value, and other property is exempt only up to a dollar amount. The idea behind exemptions is that someone filing for bankruptcy should not be stripped of basic things needed for living – like shelter, clothing, furniture, a car, and the like. (Learn more about how bankruptcy exemptions work.)

Some states allow you to choose between the state exemption system and another set, called the federal bankruptcy exemptions. But Oklahoma is not one of these states. If you file for bankruptcy in Oklahoma, you must use the Oklahoma bankruptcy exemptions.

Using the Oklahoma Bankruptcy Exemptions to Keep Jewelry

In Oklahoma, you can keep jewelry using the below exemptions. If you are married and filing a joint bankruptcy, you can double these amounts.

Wedding and anniversary ring exemption. Oklahoma law allows you to exempt wedding and anniversary rings, up to an aggregate value of $3,000. Okla. Stat. Ann. tit. 31, §1(A)(8).

Wearing apparel exemption. Oklahoma also allows you to exempt wearing apparel, up to $4,000. Okla. Stat. Ann. tit. 31, §1(A)(7). It’s possible that you can keep a watch or other item of jewelry under this exemption. It will depend on the specific facts of your case, whether the jewelry is for your personal use, and how your bankruptcy judge views this exemption. Here’s how a few courts have ruled on this issue:

  • The first published court decision on this issue came in 1986. In that case, the debtor wished to keep a gold watch, gold chain, and gold coin under the wearing apparel exemption. The court ruled that the debtor could keep the watch, but that the chain and coin represented investments, and not solely ornamentation, and therefore could not be exempted. In re Goldberg, 59 B.R. 201 (Bankr. N.D. Okla. 1986) (superseded by statute on another unrelated issue).
  • Yet three years later, a different bankruptcy judge came to a different conclusion under similar circumstances. In that case, the judge allowed the debtor to keep a diamond necklace, diamond ring, and diamond earrings, with an aggregate value of $800, under the wearing apparel exemption. The court looked to the regular definition of wearing apparel, which is (1) clothing, or (2) items of adornment, and found that the jewelry fit within the second part of the definition since the debtor used it for adornment. In addressing concerns that debtors could use this exemption to keep luxury goods, the court reasoned that the legislature already contemplated, and eliminated, this possibility by imposing the $4,000 exemption cap.  In re Miller, 101 B.R. 713 (Bankr. E.D. Okla. 1989).

How to Value Jewelry in Bankruptcy

The value of your jewelry for exemption purposes is the amount you would have to pay to replace each item with a used item of similar age and in similar condition.  There are various methods of determining the replacement value, but for expensive jewelry you will almost always need an appraisal. (Learn more about how to value personal property in bankruptcy.)

Other Ways to Keep Jewelry in a Oklahoma Bankruptcy

If you want to keep nonexempt items of jewelry, the trustee may accept other items of exempt property in exchange for the jewelry. The trustee would then sell these items instead of your jewelry to repay your creditors.

Similarly, if you have some cash, you may be able to reimburse the bankruptcy trustee for the value of the jewelry you want to keep. Again, the trustee would use this money (instead of selling the jewelry) to repay unsecured creditors.

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