By filing Chapter 7
bankruptcy, you can wipe out most of your debt and begin to establish a good
credit rating. A Chapter 7 bankruptcy discharge can allow you a
"fresh start," financially.
Sometimes average working
individuals and families find themselves in a position where they cannot pay
their bills. This could be due to a sudden loss of a job or income,
a serious injury or illness that has caused medical bills to pile up, divorce, or
even a natural disaster like a flood, tornado, or hurricane can quickly wipe out
a life's savings. The most common reasons for filing include severely over-extended
credit, marital difficulties, huge medical fees, unemployment, or any massive
unexpected expense.
For many, Bankruptcy
provides a second chance. Filing bankruptcy is generally considered a last
resort. In most cases, it can relieve tremendous stress and provide the
opportunity to rebuild from scratch. Filing for bankruptcy should not be taken
lightly, however, it may prove itself to be the solution for you.
BANKRUPTCY LAW IS A FEDERAL
LAW. BELOW IS SOME GENERAL INFORMATION ABOUT WHAT HAPPENS IN A BANKRUPTCY CASE.
THE INFORMATION HERE IS NOT COMPLETE. YOU MAY NEED LEGAL ADVICE. ANY
ATTORNEY IS REQUIRED TO PROVIDE YOU WITH A “BANKRUPTCY INFORMATION SHEET” CONTAINING SUCH INFORMATION, FOR
YOU TO REVIEW BEFORE FILING BANKRUPTCY. DO NOT RETAIN AN ATTORNEY WHO FAILS TO PROVIDE YOU WITH SUCH INFORMATION.
By filing Chapter 7
bankruptcy, you can wipe out most of your debt and begin to establish a good
credit rating. A Chapter 7 bankruptcy discharge can allow you a
"fresh start," financially.
Sometimes average working
individuals and families find themselves in a position where they cannot pay
their bills. This could be due to a sudden loss of a job or income,
a serious injury or illness that has caused medical bills to pile up, divorce, or
even a natural disaster like a flood, tornado, or hurricane can quickly wipe out
a life's savings. The most common reasons for filing include severely over-extended
credit, marital difficulties, huge medical fees, unemployment, or any massive
unexpected expense.
For many, Bankruptcy
provides a second chance. Filing bankruptcy is generally considered a last
resort. In most cases, it can relieve tremendous stress and provide the
opportunity to rebuild from scratch. Filing for bankruptcy should not be taken
lightly, however, it may prove itself to be the solution for you.
BANKRUPTCY LAW IS A FEDERAL
LAW. BELOW IS SOME GENERAL INFORMATION ABOUT WHAT HAPPENS IN A BANKRUPTCY CASE.
THE INFORMATION HERE IS NOT COMPLETE. YOU MAY NEED LEGAL ADVICE. ANY
ATTORNEY IS REQUIRED TO
PROVIDE YOU WITH A “BANKRUPTCY INFORMATION SHEET” CONTAINING SUCH INFORMATION, FOR
YOU TO REVIEW BEFORE FILING BANKRUPTCY. DO NOT RETAIN AN ATTORNEY WHO FAILS TO PROVIDE YOU WITH SUCH INFORMATION.
IMPORTANT NOTE TO INDIVIDUAL DEBTORS: Effective January 1, 2001, all individual debtors, must provide photo identification and proof of social security number
to the trustee at the meeting of creditors. Failure to do so may result in your case being dismissed.
WHEN YOU FILE BANKRUPTCY:
You can choose the kind of bankruptcy that best meets your needs:
Chapter 7 - A trustee is appointed to take over your property. Any property of value will be sold or turned into money to pay your creditors. You may be able to keep some personal items and possibly real estate depending on the law of the state where you live.
Chapter 13 - You can usually keep your property, but you must earn wages or have some other source of regular income and you must agree to pay part of your income to your creditors. The Court must approve your repayment plan and your budget. A trustee is appointed and will collect the payments from you, pay your creditors, and make sure you live up to the terms of your repayment plan.
Chapter 12 - Like chapter 13, but it is only for family farmers.
Chapter 11 - This is used mostly by businesses. In chapter 11, you may continue to operate your business, but your creditors and the court must approve a plan to repay your debts. There is no trustee unless the judge decides that one is necessary; if a trustee is appointed, the trustee takes control of your business and property.
If you have already filed bankruptcy under chapter 7, you may be able to change your case to another chapter.
Your bankruptcy may be reported on your credit record for as long as ten years. It can affect your ability to receive credit in the future.
WHAT IS A BANKRUPTCY DISCHARGE AND HOW DOES IT OPERATE?
One of the reasons people file bankruptcy is to get a "discharge". A discharge is a Court order which states that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for
most taxes;
child support;
most student loans;
Court fines and criminal restitution; and
personal injury caused by driving drunk or under the influence of drugs.
The discharge only applies to debts that arose before the date you filed.
Also, if the Judge finds that you received money or property by fraud, that debt may not be discharged.
It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged.
The Judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records or lie, or if you disobey a Court order.
You can only receive a chapter 7 discharge once every 8 years. If you received a discharge from a Chapter 13 case, then you need only wait 4 years.
Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property.
WHAT IS A REAFFIRMATION AGREEMENT?
Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the Court. Reaffirmation agreements are under special rules and are voluntary. They are not required by bankruptcy law or by any other law.
Reaffirmation agreements--
must be voluntary;
must not place too heavy a burden on you or your family;
must be in your best interest; and
can be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the Court, whichever gives you the most time.
If you are an individual and you are not represented by an attorney, the Court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the Court approves it.
If you reaffirm a debt and then fail to pay it, you owe the debt the same as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.
IF YOU WANT MORE INFORMATION OR HAVE QUESTIONS ABOUT HOW THE BANKRUPTCY LAWS AFFECT YOU, YOU MAY NEED LEGAL ADVICE. THE TRUSTEE IN YOUR CASE IS NOT RESPONSIBLE FOR GIVING YOU LEGAL ADVICE.
BELOW IS A DISCLOSURE THAT YOUR BANKRUPTCY ATTORNEY IS REQUIRED BY LAW TO PROVIDE TO YOU.IN A NUTSHELL, IT SAYS TO PROVIDE YOUR ATTORNEY WITH ACCURATE INFORMATION AND TO BE HONEST AND TO NOT COMMIT FRAUD.
11 U.S.C. § 527(a)(2) DISCLOSURE
Under 11 U.S.C. § 527(a)(2), a debt relief agency is required to provide the following written notice to assisted persons filing bankruptcy. You must read and understand the following disclosure and sign where indicated.
You, as an assisted person filingbankruptcy, shall know and understand that:
A.
all information that you are required to provide with a petition and thereafter during a case under this title is required to be complete, accurate, and truthful;
B.
all assets and all liabilities are required to be completely and accurately disclosed in the documents filed to commence the case, and the replacement value of each asset as defined in section 506 must be stated in those documents where requested after reasonable inquiry to establish such value;
C.
current monthly income, the amounts specified in section 707(b)(2), and, in a case under chapter 13 of this title, disposable income (determined in accordance with section 707(b)(2)), are required to be stated after reasonable inquiry; and
D.
information that an assisted person provides during their case may be audited pursuant to this title, and that failure to provide such information may result in dismissal of the case under this title or other sanction, including criminal sanction.
The undersigned acknowledges receipt of this disclosure required by 11 U.S.C. § 527(a)(2). I/We have read and understand its contents and the implications associated with failing to honestly provide information about our income, expenses, property, and other financial circumstances.
BELOW IS A DISCLOSURE THAT YOUR BANKRUPTCY ATTORNEY IS REQUIRED BY LAW TO PROVIDE TO YOU.IN A NUTSHELL, IT SAYS TO MAKE SURE YOU KNOW HOW MUCH YOU ARE PAYING YOUR BANKRUPTCY ATTORNEY SO THAT HE OR SHE WILL NOT RIP YOU OFF, AND IT ALSO REITERATES GENERAL BANKRUPTCY INFORMATION.
U.S.C. § 527(B) DISCLOSURE
IMPORTANT INFORMATION ABOUT BANKRUPTCY ASSISTANCE SERVICES FROM AN ATTORNEY OR BANKRUPTCY PETITION PREPARER.
If you decide to seek bankruptcy relief, you can represent yourself, you can hire an attorney to represent you, or you can get help in some localities from a bankruptcy petition preparer who is not an attorney. THE LAW REQUIRES AN ATTORNEY OR BANKRUPTCY PETITION PREPARER TO GIVE YOU A WRITTEN CONTRACT SPECIFYING WHAT THE ATTORNEY OR BANKRUPTCY PETITION PREPARER WILL DO FOR YOU AND HOW MUCH IT WILL COST. Ask to see the contract before you hire anyone.
The following information helps you understand what must be done in a routine bankruptcy case to help you evaluate how much service you need. Although bankruptcy can be complex, many cases are routine.
Before filing a bankruptcy case,either you or your attorney should analyze your eligibility for different forms of debt relief available under the Bankruptcy Code and which form of relief is most likely to be beneficial for you. Be sure you understand the relief you can obtain and its limitations. To file a bankruptcy case, documents called a Petition, Schedules and Statement of Financial Affairs, as well as in some cases a Statement of Intention need to be prepared correctly and filed with the bankruptcy court. You will have to pay a filing fee to the bankruptcy court. Once your case starts, you will have to attend the required first meeting of creditors where you may be questioned by a court official called a "trustee" and by creditors.
If you choose to file a chapter 7 case, you may be asked by a creditor to reaffirm a debt. You may want help deciding whether to do so. A creditor is not permitted to coerce you into reaffirming your debts.
If you choose to file a chapter 13 case in which you repay your creditors what you can afford over 3 to 5 years, you may also want help with preparing your chapter 13 plan and with the confirmation hearing on your plan which will be before a bankruptcy judge.
If you select another type of relief under the Bankruptcy Code other than chapter 7 or chapter 13, you will want to find out what should be done from someone familiar with that type of relief.
Your bankruptcy case may also involve litigation. You are generally permitted to represent yourself in litigation in bankruptcy court, but only attorneys, not bankruptcy petition preparers, can give you legal advice.
OKLAHOMA STATE EXEMPTIONS
Property that is "exempt" from bankruptcy is property not included in the bankruptcy and cannot be touched by creditors or the bankruptcy trustee to satisfy payment of your debts. Keep making any payments on it and you can keep it. Oklahoma is an "opt out" state, which means that Federal Bankruptcy Exemptions are not available. Instead, the Oklahoma Bankruptcy Exemptions apply, which are:
ASSET
EXEMPTIONS
Homestead
Real property or manufactured home to unlimited value; property cannot exceed 1/4 acre. If property exceeds 1/4 acre, may claim $10,000 on 1 acre in city, town or village, or 160 acres elsewhere (need not occupy homestead to claim it exempt as long as you don't acquire another)
Personal Property
all household and kitchen furniture held primarily for the personal, family or household use;
wedding and anniversary rings, $3,000;
any lot or lots in a cemetery held for the purpose of sepulcher;
implements of husbandry necessary to farm the homestead, $10,000;
tools, apparatus and books used in any trade or profession, $5,000;
all books, portraits and pictures that are held primarily for the personal, family or household use;
wearing apparel not to exceed $4,000 in aggregate value;
professionally prescribed health aids;
5 milk cows and their calves under 6 months old; 100 chickens; 2 horses and 2 bridles and 2 saddles;
one motor vehicle not to exceed $7,500 in value;
guns, $2,000;
10 hogs, 20 head of sheep; all provisions and forage on hand, or growing for home consumption, and for the use of exempt stock for one (1) year;
Pension and Retirement Benefits
ERISA;
401(K);
Deferred compensation plans;
Law enforcement employees;
Public employees;
Teachers;
Tax exempt benefits;
Tax deferred annuities;
Health Insurance plans;
County employees;
Disabled veterans;
Education retirement accounts;
Qualified retirement plans
Public Benefits
AFDC;
Crime victims' compensation;
Social Security;
Unemployment compensation;
Workers' compensation, for a net amount not to exceed $50,000, but not including any claim for punitive damages
Tools of the trade
Implements to farm homestead, tools, books & apparatus to $5,000 total, if used in business or trade of debtor or dependent
Wages
75% of all current wages or earnings for personal or professional services earned during the last ninety (90) days, except as provided in Title 12 of the Oklahoma Statutes in garnishment proceedings for collection of child support; right to receive alimony, support, separate maintenance or child support payment to the extent reasonably necessary for the support of debtor and his dependent
Miscellaneous
Alimony;
Child support;
Business partnership property
What debts are discharged in
Chapter 7
dischargeable
possibly dischargeable (but action will be contested and additional costs and fees will be incurred beyond the flat fee amount)
WE ARE A FEDERALLY DESIGNATED DEBT RELIEF AGENCY PURSUANT TO TITLE 11 OF THE U.S. CODE. WE PROVIDE LEGAL ASSISTANCE AND HELP PEOPLE FILE FOR BANKRUPTCY RELIEF UNDER THE BANKRUPTCY CODE.
