The bankruptcy process in Oklahoma City can be confusing, but you have options. Filing for bankruptcy involves several steps that help individuals or businesses address their financial difficulties under the protection of the federal bankruptcy court. Here, we’ll break down the different steps as well as what to expect in each.
Bankruptcy Process in OKC Begins With Pre-Filing Requirements
Before filing for bankruptcy, debtors must complete a credit counseling course from an approved agency within 180 days prior. Afterwards, you must obtain a certificate of credit counseling and submit it with the petition. The pre-bankruptcy credit counseling must be attached to the initial petition when its filed.
Filing the Bankruptcy Petition
The next step is filing the bankruptcy petition, but first, you need to determine which type of bankruptcy you want to file, Chapter 7 or Chapter 13. Collect all financial records, fill out the required bankruptcy forms, then file the completed bankruptcy forms with the US Bankruptcy Court for the Western District of Oklahoma.
After filing the bankruptcy petition, an automatic stay goes into effect, stopping most collection actions, including lawsuits, wage garnishments, and foreclosure proceedings.
Trustee Appointment and Meeting of Creditors
The court appoints a bankruptcy trustee to oversee the case. The trustee reviews the petition, identifies non-exempt assets, and ensures compliance with bankruptcy laws. Soon after your filing, the trustee holds a meeting of creditors where the debtor answers questions under oath about their financial situation and bankruptcy forms. Creditors may also attend and ask questions, although they often do not.
Chapter 7 Bankruptcy (Fresh Start)
The trustee distributes proceeds from the sale of non-exempt assets to creditors according to the priority established by bankruptcy law, starting with secured creditors and priority unsecured creditors. The State of Oklahoma has a large list of exempt assets that you don’t lose in chapter 7. This includes your house, car, retirement plans and many other assets. Assets are protected under state or federal exemptions and cannot be sold to pay creditors.
Chapter 13 Bankruptcy (Repayment Plan)
The debtor submits a proposed repayment plan to the court, detailing how they will repay debts over three to five years. The court and creditors review the plan, and if there are objections, there will be a confirmation hearing. The debtor makes regular payments to the trustee, who then distributes the funds to creditors according to the confirmed plan. Chapter 13 is used most times when a persons income is to high to qualify for a chapter 7. Also, chapter 13 is a tool to save your home from foreclosure in those instances when you have fallen behind on mortgage payments.
Discharge of Debts
Each type of bankruptcy has its own timeframe for the discharge of debts. In Chapter 7, it’s typically 3 to 4 months after filing, the court issues a discharge order, relieving the debtor from personal liability for most debts. In Chapter 13, after successfully completing the repayment plan, usually 3 to 5 years, the court grants a discharge of remaining eligible debts.
Case Closure
Just as with the discharge, the method of closing the case varies. For Chapter 7, the trustee files a final report, and the case is closed after all administrative tasks are completed. For Chapter 13, the case is closed once the debtor completes the repayment plan and receives a discharge.
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Oklahoma City Bankruptcy Attorneys
The bankruptcy process in Oklahoma City involves several structured steps, from pre-filing credit counseling to the final discharge of debts. It provides a legal means for individuals and businesses to address financial difficulties and start anew. Consulting with a bankruptcy attorney can help navigate the process, ensuring compliance with legal requirements. If you’re considering filing for bankruptcy, our bankruptcy team at OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.
