Oklahoma Bankruptcy Exemptions

What Are Commonly Used Bankruptcy Exemptions in Oklahoma?

Oklahoma bankruptcy filers can protect home equity using the Oklahoma homestead exemption, equity in a car using the Oklahoma motor vehicle exemption, and more.

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. Read more about homestead exemptions and learn how this requirement prevents debtors from "shopping" for the most favorable homestead exemptions by imposing a federal cap of $189,050. (Applies to bankruptcy cases filed between April 1, 2022, and April 1, 2025.)

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 total exemption amount as long as you don't live in another residence.

Learn more about Oklahoma's homestead exemption and protecting your home in bankruptcy.

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. Find out about protecting cars in bankruptcy and how the motor vehicle exemption works in a Chapter 7 case.

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, two 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

Retirement accounts all filers can protect. Federal law allows all filers to keep tax-exempt retirement accounts, including 401(K)s, 403(b)s, profit-sharing and money purchase plans, SEP and SIMPLE IRAs, defined benefit plans, and traditional and Roth IRAs to $1,512,350 per person (for cases filed between April 1, 2022, and March 31, 2025). (11 U.S.C. 522(b)(3)(C); (n).) Learn more about retirement accounts in bankruptcy.

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 and 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 90 days before your bankruptcy filing. The bankruptcy judge may allow you to keep more if you 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

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. Legalconsumer.com also updates bankruptcy exemption amounts regularly.

Because ensuring you've found the correct information can be challenging, consider consulting with an Oklahoma bankruptcy attorney.

What Happens to Property I Can't Exempt in an Oklahoma Bankruptcy?

One of two things will happen. You'll either lose nonexempt property or pay to keep it, depending on whether you file for Chapter 7 or Chapter 13. Here's how it works.

In Chapter 7, the bankruptcy trustee sells nonexempt property and distributes the proceeds to creditors. In Chapter 13, filers pay the value of the nonexempt property to unsecured creditors. Learn about secured and unsecured debt in bankruptcy.

The procedural differences are necessary because filers can keep all property in Chapter 13 but not in Chapter 7. Without different systems, creditors would receive less in Chapter 13 than in a Chapter 7 case.

Example. Suppose you couldn't exempt a motorcycle in Chapter 7, and the Chapter 7 trustee sold it and paid unsecured creditors $10,000 after deducting sales costs. If you filed for Chapter 13, you'd pay unsecured creditors at least $10,000 through the Chapter 13 repayment plan to keep the motorcycle.