What Property Can I Keep When I file Bankruptcy Tulsa
Obtaining a bankruptcy Discharge While Keeping Your Property
Many people who stand to experience a significant benefit by filing Chapter 7 bankruptcy elect not to do so because they are afraid they will lose their family home, cherished family heirlooms and other property.
In theory, a debtor liquidates his or her assets to pay off some portion of his or her unsecured debts, and liability for the bulk of this debt is permanently extinguished. As a practical matter, most Chapter 7 bankruptcies fall into the category referred to as “No Asset” Chapter 7 Bankruptcy. This term does not mean that these bankruptcy filers have no assets but rather that they have no assets that cannot be excluded from the reach of creditors through use of the bankruptcy exemption system. The National Association of Bankruptcy Trustees who oversee the bankruptcy process report that approximately ninety percent of Chapter 7 Bankruptcies involve no exempt assets. This means that debtors keep ALL of their property in these bankruptcies with the exception of any secured property like financed vehicles that the debtor elects to surrender.
In other words, the exemption system is a powerful tool for Oklahoma debtors because it allows filers to avoid unsecured debts that cannot be repaid while also being allowed to keep essentially all of the debtor’s property. Our skilled Oklahoma bankruptcy attorneys at the Kania Law Office analyze our client’s portfolio of assets to determine the most effective use of bankruptcy exemptions to facilitate our clients in keeping most or all of their property. We may even engage in pre-bankruptcy planning so that we can advise clients on how to lawfully convert non-exempt assets into those that fall under an exemption without running afoul of bankruptcy rules against fraudulent transfers.
The exemption system is particularly effective in Oklahoma because debtors can use federal bankruptcy exemptions as well as exemptions available under Oklahoma’s own exemption system. Exemptions protect certain assets from creditors in their entirety whereas other property is protected up to a certain maximum value. The exemption only needs to cover the equity in an asset. This means that motor vehicle that is valued at $8,000 with an outstanding loan of $6,500 is fully exempt if $1,500 of an applicable exemption is used to protect the vehicle.
Some of the most valuable and/or commonly used exemptions under the Kentucky exemption system include:
Real property or manufactured home (no limit on value of equity)
Certain insurance benefits
Most retirement, pension and ERISA qualified benefit plans
Asset of a business partnership
Motor vehicles up to $7,500
Clothes items up to $4,000
Furniture
Certain public benefits
Trade tools
75 percent of wages earned within ninety day prior to filing bankruptcy (judge may allow more)
Because this is simply a small sampling of assets that may be protected through use of a bankruptcy exemption, the best option is to consult with an experienced Tulsa Bankruptcy Attorney to determine if you have assets that cannot be protected by a bankruptcy exemption. If a couple is married both partners can generally claim a full set of exemptions (with some exceptions).
If you have questions about whether particular assets can be protected in a Chapter 7 or you have other concerns about the bankruptcy process, our experienced Tulsa Bankruptcy Lawyers can answer your questions and analyze the best debt solution for your individual situation. Our Oklahoma Bankruptcy Attorneys offer a free initial consultation so that we can answer your questions, evaluate your needs and explain your options. We invite you to contact us at South Tulsa Bankruptcy 918-739-8984 or fill out the ask a bankruptcy attorney form today!
What Property Can I Keep When I File Bankruptcy
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