If you're considering filing for bankruptcy in Oklahoma and want to keep your home, Oklahoma's homestead exemption will help. In bankruptcy, you can retain property you can "exempt" with a bankruptcy exemption. The homestead exemption protects home equity from creditors in bankruptcy.
In this article, you'll learn how to find Oklahoma's current homestead exemption amount and apply it in your bankruptcy case. We also explain other requirements you must meet when filing for bankruptcy in Oklahoma.
Oklahoma's homestead exemption protects equity in your home or manufactured home if it's your primary residence or other property covered by the homestead exemption. The homestead can be up to half an acre in a municipality or 160 acres elsewhere. (31 O.S. § 1.)
You can exempt an unlimited amount of equity in your primary residence. It's one of the most generous homestead exemptions in the country. However, if you use more than 25% of the total square footage of your property for business purposes, your exemption will be 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. (31 O.S. § 1.)
Example. Nelson owns two properties, a residential home he lives in with his children and a rental property he leases to tenants. Nelson can use Oklahoma's homestead exemption to protect the equity in the residential house but not the leased property.
Learn more about Oklahoma's bankruptcy exemptions.
You can search Oklahoma's statutes online on the Oklahoma Legislature's website. The exemption requirements will be in the statute. (31 O.S. § 1.)
Filers behind on a mortgage will have additional hurdles to meet. For instance, in Chapter 7, you must be current on your mortgage payment when you file. Otherwise, you could lose your home. In Chapter 13, you must earn enough to afford the Chapter 13 payment, which is rarely easy.
Also, you must own the property for at least 1,215 days before the bankruptcy filing. Otherwise, federal law will limit the homestead exemption amount. Find out more about your home in Chapter 7 and your home in Chapter 13.
You can file for bankruptcy in Oklahoma after living there for over 180 days. However, you must live there for at least 730 days before using the Oklahoma exemptions. Otherwise, you'd use the previous state's exemptions.
The calculation is different if you weren't living in one particular state two years before your bankruptcy filing. You'd use the exemptions of the state you lived in for most of the 180 days before the two years immediately preceding your filing. (11 U.S.C. § 522(b)(3)(A).)
Learn more about filing for bankruptcy after moving to a new state.
You don't need to file a separate homestead declaration in your county recorder's office before claiming Oklahoma's homestead exemption in bankruptcy. The procedure involves listing your home, its value, and the applicable exemption statutes in your bankruptcy petition.
Bankruptcy mistakes, such as improperly disclosing or exempting assets, can be costly and often occur when filing without a bankruptcy lawyer. A local bankruptcy lawyer's knowledge and expertise will help you avoid losing your home and other valuable assets and ensure you maximize the homestead exemption.
Did you know Nolo has made the law easy for over fifty years? It's true—and we want to ensure you find what you need. Below you'll find more articles explaining how bankruptcy works. And don't forget that our bankruptcy homepage is the best place to start if you have other questions!
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We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by hiring a local bankruptcy lawyer.
Updated October 3, 2023