There are certain criteria you need to meet to qualify for Chapter 7 Bankruptcy. Chapter 7 bankruptcy is often called a “fresh start” bankruptcy because it can eliminate many types of unsecured debt for people who qualify. In Tulsa, Chapter 7 may help with credit cards, medical bills, payday loans, personal loans, certain judgments, and deficiency balances after repossession or foreclosure. It may also stop wage garnishments, collection calls, lawsuits, and other creditor pressure after the case is filed. However, not everyone qualifies for Chapter 7. Before filing, you must review your income, household size, prior bankruptcy history, property, debts, and financial circumstances.
You Must Pass the Means Test or Otherwise Qualify
One of the main requirements for Chapter 7 bankruptcy is the means test. The means test compares your household income to the median income for a household of the same size. If your income is below the applicable median, you may qualify more easily.
If your income is above the median, you may still qualify after deducting certain allowed expenses. These expenses may include housing, transportation, taxes, insurance, secured debt payments, support obligations, and other legally recognized expenses. The means test is more detailed than simply asking how much money you make.
Because the calculation looks at your recent income, timing may matter. If you recently lost a job, changed jobs, reduced hours, retired, or experienced a decrease in income, you may qualify even if you earned more in the past.
You Cannot Have a Recent Chapter 7 Discharge
A prior bankruptcy filing can affect whether you qualify for another Chapter 7 discharge. If you previously received a Chapter 7 discharge, you generally must wait eight years from the filing date of the prior Chapter 7 case before receiving another Chapter 7 discharge.
This rule is measured from filing date to filing date, not from the date the prior case closed. If you filed bankruptcy before, you should provide your attorney with the filing date, discharge date, chapter filed, and case number if available.
Your Debts Must Be Reviewed
Chapter 7 works best for debts that are legally dischargeable. Many unsecured debts can be discharged, including credit cards, medical bills, payday loans, personal loans, old utility bills, and certain civil judgments.
Some debts are harder or impossible to discharge. These may include child support, alimony, recent tax debts, criminal fines, restitution, many student loans, and debts arising from fraud, embezzlement, willful injury, or other special circumstances. If your main debts are not dischargeable, Chapter 7 may not solve the problem.
Your Property Must Be Protected by Exemptions
Many people fear that filing Chapter 7 means losing everything they own. In most consumer cases, that does not happen. Bankruptcy exemptions allow qualifying debtors to protect certain property.
Oklahoma exemptions may protect a home, vehicle, household goods, clothing, retirement accounts, tools of the trade, and other property, depending on the facts. However, exemptions are not unlimited. The value of your property, liens, equity, ownership, and residency history all matter.
Before filing Chapter 7, you should review your assets carefully. This includes real estate, vehicles, bank accounts, tax refunds, personal injury claims, business interests, inheritance rights, tools, firearms, jewelry, retirement accounts, and anything else of value.
You Must Complete Credit Counseling
Before filing Chapter 7 bankruptcy, individual debtors must complete a required credit counseling course from an approved provider. This course is usually completed online or by phone. After completion, you receive a certificate that must be filed with the bankruptcy court.
Failing to complete the required course before filing can create serious problems and may result in dismissal of the case.
You Must Provide Complete and Accurate Financial Information
Chapter 7 bankruptcy requires full disclosure. You must list your income, expenses, debts, assets, transfers, lawsuits, bank accounts, vehicles, real estate, business interests, and other financial information. You must also provide documents such as pay stubs, tax returns, bank statements, vehicle loan information, mortgage information, and creditor information.
Leaving out debts, hiding assets, transferring property before filing, or giving incomplete information can create serious consequences. Honesty and accuracy are essential.
You Must Attend the Meeting of Creditors
After filing Chapter 7, you must attend a meeting of creditors. This is sometimes called a 341 meeting. The bankruptcy trustee asks questions about your petition, debts, income, property, transfers, and financial history. In most consumer cases, the meeting is brief, but it is still an important part of the bankruptcy process.
Creditors may appear and ask questions, although they often do not. Your attorney can help you prepare so you understand what to expect.
Chapter 7 May Not Be Right for Everyone
Even if you qualify for Chapter 7, it may not be the best option in every situation. Chapter 13 may be better if you are behind on your mortgage, need to stop foreclosure, want to catch up on car payments, have nonexempt property, owe certain taxes, or need time to repay debts under court protection.
The right chapter depends on your goals. If your main goal is to eliminate unsecured debt quickly, Chapter 7 may be appropriate. If your goal is to save a house or vehicle while catching up over time, Chapter 13 may provide better protection.
Talk to a Tulsa Chapter 7 Bankruptcy Attorney
To qualify for Chapter 7 bankruptcy in Tulsa, you generally need to satisfy the means test, avoid disqualifying prior bankruptcy timing issues, complete credit counseling, disclose your financial information, and show that Chapter 7 is appropriate for your debts and property. If you are struggling with garnishments, lawsuits, medical bills, credit cards, repossessions, or overwhelming debt, speak with an experienced Tulsa bankruptcy attorney. A lawyer can review your income, debts, assets, exemptions, and financial goals to determine whether Chapter 7 bankruptcy can help you obtain a fresh financial start. If you are considering Chapter 7 bankruptcy in Tulsa, call 918-739-8894 or contact South Tulsa Bankruptcy Lawyers to schedule a free consultation.
