Chapter 7 bankruptcy is often called a “fresh start” bankruptcy because it can help qualifying individuals eliminate many types of unsecured debt and move forward financially. For many people in Tulsa and throughout Oklahoma, Chapter 7 is the most direct and comprehensive form of consumer bankruptcy.
If you are overwhelmed by credit cards, medical bills, payday loans, lawsuits, garnishments, repossessions, or other debt, Chapter 7 may provide relief. You do not have to continue living under the pressure of crushing debt, constant creditor calls, or the fear that your paycheck will be garnished.
Things to Know About Chapter 7 Bankruptcy
Chapter 7 bankruptcy can be a powerful tool, but not everyone qualifies. Before filing, you should understand a few basic requirements:
- You generally cannot receive another Chapter 7 discharge if you received a Chapter 7 discharge in a case filed within the last eight years.
- You must satisfy the bankruptcy means test or otherwise qualify under the Bankruptcy Code.
- You must meet applicable residency requirements before using Oklahoma exemptions.
These rules can be confusing, but an experienced Tulsa bankruptcy attorney can review your situation and explain whether Chapter 7 is available to you.
Do I Qualify for Tulsa Chapter 7 Bankruptcy?
To qualify for Chapter 7 bankruptcy, one important issue is whether you previously filed Chapter 7. The eight-year period is measured from the date the prior Chapter 7 case was filed, not the date it closed. If enough time has passed, you may be eligible to file again.
Another important issue is the means test. The means test compares your household income and family size to the median income figures used in bankruptcy cases. The test generally looks at your income during the six months before filing and converts that amount into an annual figure.
This calculation can sometimes help people who recently lost a higher-paying job, had a reduction in hours, experienced a medical event, or suffered another financial setback. Even if you believe your income is too high, you should not assume you are disqualified before speaking with a bankruptcy attorney.
Oklahoma Residency and Bankruptcy Exemptions
Residency matters in bankruptcy because exemptions determine what property you can protect. Bankruptcy exemptions allow you to keep certain property while still receiving debt relief.
Oklahoma exemptions are often favorable for many debtors. In many Chapter 7 cases, debtors can protect important property such as a home, vehicle, household goods, retirement accounts, tools of the trade, and other personal property. However, exemption planning must be done carefully. The rules can depend on how long you have lived in Oklahoma, the type of property involved, ownership, equity, liens, and other facts.
You should speak with a bankruptcy attorney before filing so you understand what property is protected and whether any assets may be at risk.
What Assets Can I Keep in Chapter 7 Bankruptcy?
Many people fear that filing Chapter 7 means losing everything. In most consumer cases, that is not what happens. Oklahoma exemptions may allow qualifying debtors to keep many necessary assets.
Depending on your circumstances, protected property may include:
- Your home;
- Your automobile;
- Household furniture and appliances;
- Clothing and personal belongings;
- Tools used in your trade or occupation;
- Retirement accounts and qualified plans; and
- Certain farming tools, equipment, animals, or implements.
The exact protection depends on the facts of your case. Before filing, your attorney should review your property, liens, equity, exemptions, and financial history.
Debts Discharged in Chapter 7 Bankruptcy
Chapter 7 bankruptcy may discharge many types of unsecured debt. A discharge means you are no longer personally responsible for paying qualifying debts. This can provide significant relief and allow you to begin rebuilding your financial life.
Debts commonly addressed in Chapter 7 include:
- Credit card debt;
- Medical bills;
- Payday loans;
- Personal loans;
- Deficiency balances after repossession;
- Certain foreclosure-related debt;
- Certain civil judgments; and
- Some older tax debts, if they meet specific legal requirements.
Not every debt is dischargeable. Student loans, recent taxes, domestic support obligations, criminal restitution, and debts involving fraud or intentional injury may require special analysis. A bankruptcy attorney can review your debts and explain what Chapter 7 may eliminate.
Chapter 7 Can Stop Garnishments and Collection Pressure
One of the most immediate benefits of filing bankruptcy is the automatic stay. In many cases, the automatic stay stops wage garnishments, collection calls, creditor lawsuits, bank levies, repossessions, and other collection efforts.
If your wages are being garnished or you have been sued by a creditor, bankruptcy may provide immediate protection. Timing matters, so it is important to speak with an attorney before additional collection activity occurs.
Contact a Tulsa Chapter 7 Bankruptcy Lawyer
The first step is to call a local bankruptcy law firm and talk through your options. At South Tulsa Bankruptcy Lawyers, we are local bankruptcy attorneys who help Oklahomans understand Chapter 7 and Chapter 13 bankruptcy. We will ask questions about your income, debts, property, lawsuits, garnishments, vehicles, home, and financial goals so we can determine what options may be available.
Your consultation is free and confidential. In many cases, we can meet quickly, including after-hours appointments when necessary.
If you are considering Chapter 7 bankruptcy in Tulsa, call 918-739-8894 or contact South Tulsa Bankruptcy Lawyers to schedule a free consultation.
