Filing bankruptcy can be overwhelming because it involves a mountain of paperwork. There are also many opportunities to make critical mistakes. These can result in continuing liability for dischargeable debts; unnecessary delays while a bankruptcy is amended; and even the dismissal of a bankruptcy that puts a debtor’s assets at-risk. Because most people struggling with debts have questions about their legal rights and options, our experienced Tulsa Bankruptcy Attorneys have provided answer to common questions about Chapter 7 and Chapter 13 consumer bankruptcies in Oklahoma.
Filing Bankruptcy Defined:
Filing Bankruptcy refers to a form of relief for those who are financially struggling or subject to liability for judgments and settlements. The goal of bankruptcy is to provide debtors with a “fresh start” and to offer temporary relief from oppressive debt enforcement and collection practices while debtors proceed through the bankruptcy process. Federal law governs bankruptcy with court proceedings occurring in federal court.
Bankruptcy Stops Collection Activity:
The automatic stay is a special protection that debtors receive once their Chapter 7 or Chapter 13 bankruptcy files. Once a bankruptcy has been filed and a creditor has been notified that a debt has been included in a bankruptcy filing, an injunction is created that immediately terminates any action to collect the debt. The automatic stay provides relief for debtors while they are seeking bankruptcy relief.
Difference Between Chapter 7 and Chapter 13:
Chapter 7 bankruptcy results in a discharge of most or all of an individual’s unsecured debt. Chapter 13 involves making monthly payments of past due arrearages on secured debts. You may also have to pay a portion of ordinary unsecured debts. The Chapter 7 provides more complete relief from unsecured debts like credit card obligations. Chapter 13 may be a preferable option if a debtor has assets that are not exempt. Also if the debtor needs to protect his or her home from foreclosure.
You Can Keep Your Home and Car in Bankruptcy:
While secured debts are not subject to a bankruptcy discharge. Many consumers are able to keep their home and car even after filing bankruptcy. Oklahoma bankruptcy exemptions provide an exemption for a car of up to a value of $7,500. The exemption only needs to protect the equity in the asset. So if the debtor is upside down no exemption is necessary.The bankruptcy process often maintains a family home because Oklahoma’s exemption system provides an exemption for real property that does not have an amount limit. Chapter 13 also may provide a way to catch up on a mortgage and avoid foreclosure when debtors cannot qualify for Chapter 7.