When you file Oklahoma bankruptcy, the court and the creditors will heavily scrutinize your assets. In exchange for assistance with your debts, either through discharge or reorganization, you must be willing to negotiate with creditors. If you have valuable assets, the bankruptcy system does allow you various means of legally protecting them.
First things first: do not commit bankruptcy fraud. If you make big purchases on credit cards, accumulate cash advances or request large personal loans right before filing for bankruptcy, the court will be suspicious of your spending activity. In addition, if you try to protect your assets by transferring all of them to friends or family members on the eve of your Oklahoma chapter 7 bankruptcy, creditors may attempt to seize these assets.
When you file for bankruptcy, all of your assets and debts become your bankruptcy estate. The value of your bankruptcy estate must be distributed by the trustee to your creditors. However, bankruptcy does allow exemptions. Depending on the value of your estate, you may be able to avoid relinquishing any property to creditors.
Bankruptcies are governed by both state and federal law. The Bankruptcy Code is a federal law, and federal bankruptcy judges oversee the process. However, Oklahoma is permitted to pass its own bankruptcy regulations. In Oklahoma, you are required to use Oklahoma bankruptcy exemptions and federal non-bankruptcy exemptions when valuing your bankruptcy estate. Oklahoma and federal bankruptcy exemptions include:
- The full value of your primary residence unless you also use your primary residence for your business, which would then reduce the exemption to $5,000
- Up to 1 acre of land if you live in a town but up to 160 acres if you live on a farm or ranch
- Cemetery plots
- Engagement rings
- Books and photos
- Home defense guns
- Livestock for family, not business, use
- Medical equipment
- College savings plans
- Furniture, decorations, computers, and other personal property
- Personal injury awards amounting up to $50,000
- Individual Development Accounts
- Funeral benefits
- War bond payroll savings
- Up to $7,500 in equity in a vehicle
- Various retirement accounts such as 401(k)s and IRAs worth up to $1,245,745
- Crime compensation
- Social Security and other disability payments
- Unemployment pay
- Worker’s compensation
- Earned income tax credit
- Farming tools
- Enough seeds to last one harvest
- Business equipment like computers, fax machines, filing cabinets, and more
- 75% of your income earned in the 3 months preceding filing
- Spousal and child support
- Group life insurance proceeds
- Property owned by your LLP or GP business
- And more
This is only a partial list. As you can see, there is an astonishing number of bankruptcy exemptions that may apply to your estate. While your bankruptcy estate may seem fairly valuable after you compare your income with your liabilities, the exemptions can greatly reduce your income. In addition, these exempted properties cannot be seized in a Chapter 7 bankruptcy. Thus if you are seeking a total discharge of unsecured debts, you will be able to protect your home from seizure. You may also be able to protect your car depending on its worth and the overall value of your estate.
The best way to prepare for bankruptcy is to plan ahead. By securing your assets before the threat of bankruptcy enters your mind, you can protect them down the road. Placing some of your valuable assets like inheritances into a trust fund will transfer ownership out of your hands. Money in a trust fund will not be calculated as part of your estate. In addition, placing money in a trust fund will preserve your funds for the probate process as well.
Free Consultation And Your Assets in Oklahoma Bankruptcy;
If you are considering an Oklahoma bankruptcy keeping your assets is very important. Out attorneys will go through your assets and debts and apply the bankruptcy exemptions so that you don’t lose your home, car, retirement and most other personal property in bankruptcy. Call today for a free consultation.