January 3, 2019
For most people considering filing for bankruptcy, the first step is determining whether a Chapter 7 or Chapter 13 bankruptcy will be best. It’s also common to want to know what property you can protect with Oklahoma’s bankruptcy exemptions. You’ll find a list of exempt property below.
Once you’ve decided which chapter to file and you’re ready to complete your paperwork, use this article to find:
- official bankruptcy forms
- Oklahoma means test figures
- approved credit counseling providers, and
- your local bankruptcy court.
Protecting Property in Oklahoma With Bankruptcy Exemptions
Filing for bankruptcy doesn’t mean losing everything. On the other hand, you might not be able to exempt (protect) all of your property, either.
- Exempt property. You can only exempt assets that appear on the list of Oklahoma exemptions (below) or the list of federal nonbankruptcy exemptions.
- Nonexempt property. If property isn’t exempt, the Chapter 7 trustee can sell it for the benefit of your creditors. You can keep your property in a Chapter 13 bankruptcy, but you’ll have to pay its value through your Chapter 13 repayment plan.
What happens to nonexempt property depends on the bankruptcy chapter you file.
- Chapter 7 bankruptcy. In a Chapter 7 bankruptcy, the trustee appointed to manage your matter will sell any property that isn’t exempt for the benefit of your creditors.
- Chapter 13 bankruptcy. By contrast, you can keep all of your property in a Chapter 13 bankruptcy, but, there’s a catch. You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan (or your disposable income, whichever is more).
Oklahoma Bankruptcy Exemptions
Below are commonly-used Oklahoma bankruptcy exemptions. Spouses filing together in Oklahoma can double the exemption amount for any property in which they both have an ownership interest. The exemption cannot be doubled unless both spouses own the property.
Statute citations are to the Oklahoma Statutes Annotated unless otherwise noted.
Oklahoma Homestead Exemption
- Homestead. You can exempt an unlimited value in your primary residence on up to one acre if you live in a city, town, or village (160 acres if you live elsewhere). Also, if you use more than 25% of the total square footage of your property for business purposes, your exemption is limited to $5,000. (§§31-1(A)(1),(2).)
Oklahoma Motor Vehicle Exemption
- Motor vehicle. $7,500 of equity in a car, van, motorcycle, truck, SUV, or another motor vehicle.
Other Oklahoma Exemptions
- Personal property. Books, portraits, and pictures; burial plots (§8-7); clothing to $4,000; interest on college savings plans; deposits in an Individual Development Account; food and seed for growing crops to last one year; guns for household use, up to $2,000; health aids prescribed by a professional; household items, furniture, personal computer and related equipment; livestock for family use: five cows, 100 chickens, 20 sheep, 10 hogs, 2 horses (along with bridles and saddles), feed to last one year; personal injury and wrongful death recoveries to $50,000. (§§31-1(A)(1) through (23)); prepaid funeral benefits (§ 36-6125(H)); war bond payroll savings account (§51-42); wedding and anniversary rings to $3,000.
- Pensions. Tax-exempt retirement accounts (including 401(k)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, and defined benefit plans) (11 U.S.C. §522); IRAS and Roth IRAs (This amount is limited and is adjusted every three years. For the most recent figure, see Your Retirement Account in Bankruptcy.) (11 U.S.C. §522(b)(3)(C)(n), §15-41-30(A)(13)); ERISA-qualified benefits, IRAs, Roth IRAs, Education IRAs & Keoghs (§31-1(A)(20), (24)); county employees (§19-959); disabled veterans (§31-7); firefighters (§11-49-126); judges (§20-1111); law enforcement employees (§47-2-303.3); police officers (§11-50-124); public employees (§74-923); tax-exempt benefits (§60-328); teachers (§70-17-109).
- Public Benefits. Crime victim compensation (§21-142.13); earned income tax credit (§31-1(A)(23)); public assistance (§56-173); Social Security (§56-173); unemployment compensation (§40-2-303).
- Tools of Trade. Implements needed to farmland that is your homestead; tools, books, and other apparatus for your business or profession, up to $10,000 total (§31-1(A)(5); 31-1(C)).
- Wages. 75% of your wages that you earned in the 90 days before your bankruptcy filing. The bankruptcy judge may allow you to keep more if you can demonstrate hardship (§12-1171.1; §31-1(A)(18); §31-1.1).
- Life Insurance. Annuity benefits and cash value (§36-3631.1); assessment of mutual benefits (§36-2410); fraternal benefit society benefits (§36-2718.1); funeral benefits if they are prepaid and placed in a trust (§36-6125); group life policy or proceeds (§36-3632); insurance proceeds and cash value of life, health, accident, and mutual benefit insurance if there is a provision in the contract that prohibits them from being used to pay creditors (§36-3631.1); stock insurance benefits in a limited amount (§36-2510).
- Miscellaneous. Alimony and child support (§31-1(A)(19)); beneficiary’s interest in a statutory support trust (§6-3010); liquor license (§37-532); property of a business partnership (§54-1-504).
Oklahoma adjusts these exemption amounts on a regular basis, and additional exemptions exist. Check the Oklahoma Statutes Annotated to ensure you are using all exemptions available and that you have the most recent figures.
More Oklahoma Bankruptcy Information
The information that follows usually isn’t needed unless you’re figuring out which chapter you’re qualified to file, or you’re ready to prepare your paperwork and file your case.
If you don’t know which bankruptcy chapter is right for you, try starting with What Are the Differences Between Chapter 7 and Chapter 13 Bankruptcy?
Oklahoma Means Testing and Credit Counseling Information
You can find two types of state-specific information on the website of the U.S. Trustee: means testing figures and approved credit counseling providers.
- Means test data. Before you can receive the benefits of a Chapter 7 bankruptcy, you must show that your income is below certain guidelines. If it is, you pass the “means test.” If, however, your family income is higher than the median income of Oklahoma, you don’t automatically fail. You can subtract certain standard expenses, and, if you don’t have enough money remaining to make a meaningful payment to your creditors, you’ll pass. You’ll find the income charts and expense figures on the U.S. Trustee’s website (select “Means Testing Information”). You’ll perform a similar calculation to determine a monthly Chapter 13 bankruptcy payment.
- Credit counseling providers. Most people who file a bankruptcy case must complete a session with a credit counseling service before filing, and, a debt management course before receiving a discharge. The U.S. Trustee maintains a list of approved providers on its website under “Credit Counseling & Debtor Education.” Scroll down to find the providers approved in Oklahoma.
Bankruptcy Costs, Filing Fees, and Forms
Most people have to pay some amount to file for bankruptcy, but it’s usually worth the cost. Here’s what you can expect.
- Official bankruptcy forms. Before the Oklahoma bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms web page, you’ll file your paperwork in your local bankruptcy court (more below) along with a filing fee or fee waiver.
- Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Find out about both in Bankruptcy Filing Fees and Costs.
- Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area. Find out the benefits of being represented by an attorney.
Oklahoma’s Bankruptcy Court Locations and Websites
Oklahoma has three federal district bankruptcy courts. On each court’s website, you’ll find the court’s local rules and instructions for filing your paperwork (click on “Filing Without an Attorney”).
If you’re unsure about where to file your case, contact one of the clerk’s offices listed below or visit the Federal Court Locator page and choose “Bankruptcy” in the “Court Type” drop-down box.
This article can't explain all aspects of filing for bankruptcy. While you’ll find helpful information here, you’re responsible for understanding bankruptcy law and procedure. A do-it-yourself book like How to File Chapter 7 Bankruptcy by Attorney Cara O’Neill and Albin Renauer J.D. provides extensive information to help with important decisions in your case.