You do not need to default on debt before filing bankruptcy in Oklahoma. But, its important that you understand the process before moving forward with your case. You should not decide whether to stop paying your debt or default until you first speak with an experienced bankruptcy attorney near you. This is because not paying your debts can put you in a worse financial position. The time to stop making payments will typically depend on whether you can afford to pay the debt back, you have been qualified to file for bankruptcy, you are sure you want to file for bankruptcy, and an attorney has given you the go-ahead.
Understanding an Oklahoma Bankruptcy
But first, you might ask, “What is bankruptcy?” There are different forms of bankruptcy. The most known is bankruptcy under Chapter 7 of the Bankruptcy Code. Bankruptcy is a legal process where a person or company cannot repay their debts to creditors and seeks relief of some or all their debt.
A Chapter 7 bankruptcy involves a bankruptcy trustee assigned to sell your non-exempt assets and use the funds to pay back your creditors. If you own a lot of property that you cannot protect with a bankruptcy exemption, this form of bankruptcy might not be in your best interest. Another form of bankruptcy is Chapter 13 bankruptcy. Under this type, you can keep all your property, but you must pay your unsecured creditors an amount equal to the value of your non-exempt assets. Unsecured creditors include credit card companies and other debt creditors. The payments do not have to be made all at once. Rather, your unsecured creditors can be paid over a three to five-year span, depending on the length of your repayment plan.
You Have To Qualify To File Bankruptcy
If your monthly income is more than the state median, you must pass the “means test.” When you make a certain income, the court presumes that you do not need to file for bankruptcy. You can rebut this presumption by showing that your monthly income does not cover your expenses due to your special circumstances.
If you are qualified to file for bankruptcy, then making credit card payments is the equivalent of throwing money down the drain. Typically, people stop making payments once they file. However, you should be certain you want to proceed with bankruptcy filing first. If you are still undecided or might not file for a long time, stopping credit card payments can cause unnecessary damage.
Remember, when you default on your debt, that creditor might decide to bring a lawsuit against you to collect its debt. For example, if a credit card company obtains a money judgment against you, it might be able to garnish your wages or go after your assets to satisfy the debt. However, the likelihood of a creditor bringing a lawsuit against you after filing and qualifying for bankruptcy is low. To avoid any potential headaches, contact an attorney to discuss your options.
Oklahoma Bankruptcy Lawyers
You may think that you need to default on debt before filing bankruptcy in Oklahoma. This is not true and this is an example of the information an attorney will provide to you. If you or someone you know is considering filing for Chapter 7 or 13 bankruptcy, contact an experienced Oklahoma bankruptcy attorney today. Filing bankruptcy can be a difficult and intrusive process. Not to mention, it can take quite some time before a court completes the case. With so much time between the filing date and its end, there is ample room for errors. You should have an attorney who understands these processes and gets you the best results. The bankruptcy attorneys at Kania Law Office have helped countless Oklahomans get the best resolutions to their financial dilemmas. We are here for you. For a free consultation, touch base with Kania Law Office by calling (918) 743-2233 or contacting us online.