Oklahoma Bankruptcy Exemptions

Like all states, Oklahoma has a set of exemptions you can use to protect some property when filing for bankruptcy, such as a home, car, and retirement account. In this article, you'll learn:

• how long you must live in Oklahoma before using its exemptions
• whether Oklahoma exemptions will protect all of your property, and
• what will happen to any property you can't exempt.

If you have more questions, read How to File Bankruptcy in Oklahoma. Not only will you find answers, but it includes helpful checklists and a link to an interactive bankruptcy quiz. Or, try the start-to-finish bankruptcy guide, What You Need to Know to File for Bankruptcy.

How Oklahoma's Bankruptcy Exemptions Work

You can protect property covered by an exemption regardless of whether you file for Chapter 7 or 13. But each chapter treats nonexempt property—things not covered by an exemption—differently.

• In Chapter 7 bankruptcy, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors.
• In Chapter 13 bankruptcy, you keep everything you own. However, you must pay the value of the nonexempt property equity in your repayment plan, or your disposable income, whichever is more.

When You Can Use Oklahoma's Bankruptcy Exemptions

You can file for bankruptcy in Oklahoma after living there for over 180 days (or the greater portion of 180 days before filing). But before using Oklahoma's exemptions, you need to live in Oklahoma for 730 days before filing for bankruptcy. Otherwise, you'd use the previous state's exemptions.

For example, suppose you weren't living in any one state during the two years before filing for bankruptcy. In that case, you'd use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. (11 U.S.C. § 522(b)(3)(A).)

Common Oklahoma Bankruptcy Exemptions

Use the list below to determine whether you can protect property important to you. Although the federal bankruptcy exemptions aren't available in Oklahoma, keep in mind that spouses who share an ownership interest in property can double the corresponding exemption. Also, all filers are entitled to:

• use the federal nonbankruptcy exemption list
• protects stimulus payments, tax credits, and child credits using the federal COVID-19 recovery rebate exemption, and

• keep 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 and traditional and Roth IRAs to $1,362,800 per person (as of June 2021). (11 U.S.C. 522(b)(3)(C); (n).) Learn more about retirement accounts in bankruptcy.

Oklahoma's Homestead Exemption

Oklahoma has one of the most generous homestead exemptions in the country. You can exempt an unlimited amount of equity in your home, manufactured home if it's your primary residence, or other property covered by the homestead exemption as long as the property isn't larger than half an acre in a municipality or 160 acres elsewhere.

Because Oklahoma's homestead exemption is so generous, you must have owned the property for at least 1,215 days before the bankruptcy filing. Otherwise, your homestead exemption is limited by federal law. Find out how this requirement prevents debtors from "shopping" for the most favorable homestead exemptions and the current amount of the federal cap.

Finally, watch for another tricky rule. If you use more than 25% of the total square footage of your property for business purposes, your exemption is limited to $5,000. You can, however, rent your property and still claim the full exemption amount, as long as you don't live in another residence.

Learn more about the Oklahoma homestead exemption.

Oklahoma Motor Vehicle Exemption

In Oklahoma, you can exempt up to $7,500 of equity in a car, van, motorcycle, truck, SUV, or another motor vehicle.

Personal Property

In Oklahoma, you can exempt the following types of personal property. §31-1(A)(1) through (23)

• books, portraits, and pictures
• burial plots (also §8-7)
• clothing to $4,000
• college savings plan interest
• 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 that are 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
• prepaid funeral benefits ( §36-6125(H))
• war bond payroll savings account ( §51-42)
• wedding and anniversary rings to $3,000

Pensions

• 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
• Workers' compensation. §85-48

Tools of the Trade

You can protect up to $10,000 in implements needed for any farmland part of your homestead, as well as tools, books, and other apparatus needed for your business or profession. (§31-1(A)(5); 31-1(C).)

Wages

You can exempt 75% of wages 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

The following life and other insurance are exempt.

• 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 a contract provision prohibits them from being used to pay creditors. §36-3631.1
• Stock insurance benefits in a limited amount. §36-2510

Other Oklahoma Exemptions

• 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

Confirming Oklahoma Bankruptcy Exemptions

Above are some of the most commonly used exemptions in Oklahoma. Other exemptions could apply to your situation, or the amounts could have changed since the last update.

To find the most current laws, search the Oklahoma Statutes Annotated on the Oklahoma legislature's website. Because ensuring that you've found the correct information can be challenging, consider consulting with an Oklahoma bankruptcy attorney.

This overview cannot provide all of the information you'll need to file a bankruptcy case. For more detailed information, consider buying a self-help book such as How to File Chapter 7 Bankruptcy by Attorney Cara O'Neill and Albin Renauer J.D.

Updated July 7, 2021