Common types of Bankruptcy in Oklahoma include chapter 7 and chapter 13. Bankruptcy is a federal law that protects people who find themselves in financial despair. The law is designed to help people escape financial hardships that plague them for a wide variety of reasons. Filing bankruptcy requires that the filer and their bankruptcy attorney provide a wide variety of documents. The documents are not hard to gather and generally include information pertaining to your assets and the debts you want to get forgiven in bankruptcy. The court and your attorney decide whether you have the capability to pay none, any, or all of your debts. The court also looks at your income compared along with the size of your family. This is whats called the means test. The means test helps determine what chapter of bankruptcy you qualify for.
Understanding Chapter 7 Bankruptcy in Tulsa
The most common type of Oklahoma bankruptcy is Chapter 7. Also called fresh start bankruptcy, Chapter 7 allows the filer to eliminate some of their secured debt and most of their unsecured debt. Unsecured debts include credit cards, personal loans, medical bills and repossessions together with and all other debts that are not secured by collateral that you have.
Certain businesses and qualifying individuals are allowed to file for Chapter 7 bankruptcy. LLCs, partnerships, and corporations with liquid assets may also qualify but generally the business is closed or closing. Typically, once you file for a Chapter 7 bankruptcy petition, there is no further collection actions made against you. This means creditors won’t be able to initiate a lawsuit or demand payment or garnish your income.
You Can Keep Your Home in Chapter 7
When you file a bankruptcy certain things that you own are considered exempt assets. This means that if you file a bankruptcy the bankruptcy court must allow you to keep the asset because its exempt. In an Oklahoma bankruptcy your primary residence is exempt. There is a catch though. To keep the house in a chapter 7 you must be current when you file. You must also continue to make the payments per the original contract or mortgage.
Understanding Chapter 13 Bankruptcy
Another of the common types of bankruptcy in Oklahoma is chapter 13. Its the second most common bankruptcy type. Its primarily used by individuals who make more than is allowed under chapter 7. The end goal is to eliminate all debt with the help of a repayment plan that helps in paying back whatever is owed over a period of 3 – 5 years. The monthly payments are made to a court trustee that distributes it among creditors. All remaining debts at the end of the plan are discharged.
An automatic stay is put into place after filing Chapter 13 which stops collection actions. Your creditors won’t be able to seek wage garnishments, file lawsuits, or make collection calls. Co-debtors are not protected with automatic stays. It can also protect your house from being foreclosed. However, you cannot default on your mortgage.
Chapter 13 bankruptcy is recommended for people who can pay a portion of their debt. You should consider this type of bankruptcy if you are facing medical bills, credit card payments, and other unsecured debt. Chapter 13 also protects property from being foreclosed which gives you enough time to pay your debts within the monthly payment plan.
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You Can Keep Your Home in Chapter 13
Just like in a chapter 7, your home is an exempt asset. The difference is that a chapter 13 might allow you to keep your home even if you are behind on the payments. Chapter 13 is tool that’s often used to stop foreclosures. This kind of bankruptcy requires that you pay the late mortgage payments to the creditor over the term of the chapter 13 plan. Chapter 13 is way different then a chapter 7. This type of bankruptcy requires that you have regular employment. It also require that your income is high enough to pay back certain debts in full by the end of the 5 year plan. Generally, chapter 13 is designed for those people that do not qualify for chapter 7 because their income is to high.
Chapter 11 Bankruptcy
Businesses utilize Chapter 11 bankruptcy, which involves submission of a reorganization plan for restructuring business related debts. Generally, large corporations make use of this. But it can also be helpful for some medium sized business. Chapter 11 is not for individuals regardless of their family income. Chapter 11 is a complicated bankruptcy filing and acts to reorganize a large business. The period of reorganization is generally intended to allow the business to continue to operate.
Entities filing Chapter 11 submit reorganization plans. The plans are either approved by the business creditors and the Bankruptcy Court or they are not. This requires a look at the business creditors and what their debt priority is.
Experienced Tulsa Bankruptcy Attorney Near You
Bankruptcy doesn’t have to be so difficult. The process seems difficult but with the help of your attorney you’ll get it done just fine. Top-rated bankruptcy attorneys at Kania Law can help if you’re not sure about the process or are on the fence about common types of bankruptcy in Oklahoma. Give us a call today at 918-743-2233 to speak to a knowledgeable attorney. You can also fill out our online consultation form.