Tulsa Chapter 7 Bankruptcy Attorney
Don’t file for Chapter 7 bankruptcy without first discussing your situation with a skilled bankruptcy attorney. The bankruptcy attorneys at Irons Law Firm will review your finances and determine whether or not Chapter 7 bankruptcy is right for you. If it is, we will guide you through the entire process and aggressively protect your rights from the start to the finish.
Tulsa Chapter 7 Bankruptcy Lawyer
Chapter 7 bankruptcy typically removes most debts by discharging them, which means you will get a fresh start financially. You should however take the decision to file for chapter 7 seriously. If you are considering filing Chapter 7 Bankruptcy, you can reach out to us at Irons Law Firm to discuss your options.
Chapter 7 Bankruptcy FAQ
What is Chapter 7 Bankruptcy?
Chapter 7 Bankruptcy is a Federal Law (11USC) created for the sole purpose of giving debt relief to individuals who need it. Congress recognized that many people many people will run into financial difficulty throughout their life time so it created bankruptcy laws to protect them from their creditors. Congress understood that there will be many people who want to repay their creditors, but due to unforeseen hardships such as job losses, divorces and medical bills, they simply cannot repay their creditors.
In short, filing Chapter 7, with only a few exceptions, may allow you wipe away (discharge) all of your unsecured debt such as credit cards, unsecured loans, medical bills, broken leases, etc. without having to repay any of it. The creditors in your Chapter 7 bankruptcy are automatically stayed (subject to a restraining order) from calling you, harassing you, writing you nasty letters, suing you, or, basically, doing anything from collecting that money. Once you receive your discharge order (order that states that all of your debts are formally wiped away), this restraining order becomes permanent and your creditors are forever prohibited from contacting you. You need an experienced bankruptcy attorney to walk you through the process of filing chapter 7.
Qualifications for Chapter 7 Bankruptcy
To qualify for Chapter 7 bankruptcy, you must pass the “means test.” This test is used to determine if your monthly disposable income is low enough for you to qualify for chapter 7.
The first step is comparing your gross income to the median family income in Oklahoma. If your income is lower than the median family income in Oklahoma, you pass the test and qualify for Chapter 7 bankruptcy.
If your income is greater than the median family income in Oklahoma, you will move onto the next step, which involves calculating your disposable income. To calculate your monthly disposable income, certain monthly expenses are subtracted from your average monthly income. Examples of expenses that are deducted include:
If you have little to no disposable income left after deducting these expenses, you may pass the means test and qualify for chapter 7.
Chapter 7 Bankruptcy Discharges
Most unsecured debts are discharged in Chapter 7 bankruptcy. Examples of these debts include:
• Credit card balances
• Medical bills
• Utility bills
• Unpaid rent
• Personal loans
• Vehicle loans
• Debts in collection
However, certain types of debt will not be discharged. Examples of these debts include:
• Unpaid taxes
• Student loans
• Child support
• Loans secured by your house, car, or other personal property
Despite these exceptions, most debtors find that filing for Chapter 7 bankruptcy allows them to clear the majority of their debts so they can have a fresh start.
Oklahoma Means Test Exceptions
Certain individuals will not need to pass the means test in order to qualify for Chapter 7 bankruptcy. You may qualify for Chapter 7 bankruptcy without passing the means test if you meet one of the following conditions:
- You are a disabled veteran who incurred at least 50% of your debt while on active duty, or
- The majority of your debts are business debts rather than consumer debts.
If you meet one of these conditions, you may be able to file for chapter 7 without proving that you have passed the means test.
What Assets are Liquidated in Chapter 7?
If you file for chapter 7, the court will appoint a trustee to oversee your case. One of the trustee’s main roles is selling your assets and distributing the funds to your creditors to repay your debts. But contrary to popular belief, this does not mean that you will lose everything you own if you file for chapter 7.
There are laws in Oklahoma that outline which assets can and cannot be sold during a Chapter 7 bankruptcy. Some of the assets that are exempted—which means they cannot be liquidated—include:
• Equity in your primary residence
• Social Security benefits
• Unemployment benefits
• Workers’ compensation benefits
• Up to $7,500 equity in your vehicle
• Up to $4,000 in clothing
• Furniture, health aides, and food to last up to one year
• Up to $3,000 equity in wedding rings
• Certain livestock
• 75% of the wages earned in the 90 days before filing for bankruptcy
• Books, portraits, and pictures
• Up to $2,000 equity in guns
• Personal computer
These are some of the many Chapter 7 bankruptcy exemptions in Oklahoma. Since these assets are protected, they will not be sold to repay your creditors. This means you will still own these assets after your debts have been discharged and your chapter 7 case has been closed.
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