Oklahoma Bankruptcy Law


  • The laws that affect someone involved in a bankruptcy in Oklahoma are going to be a mixture of Federal Law and Oklahoma Statute.
  • Bankruptcy is a legally declared inability or impairment of ability of an individual or organization to pay its creditors. Creditors may file a bankruptcy petition against a debtor ("involuntary bankruptcy") in an effort to recoup a portion of what they are owed or initiate a restructuring. In the majority of cases, however, bankruptcy is initiated by the debtor (a "voluntary bankruptcy" that is filed by the insolvent individual or organization).
  • Bankruptcy in the United States is a matter placed under Federal jurisdiction by the United States Constitution (in Article 1, Section 8, Clause 4), which allows Congress to enact "uniform laws on the subject of bankruptcies throughout the United States." The Congress has enacted statute law governing bankruptcy, primarily in the form of the Bankruptcy Code, located at Title 11 of the United States Code. Federal law is amplified by state law in some places where Federal law fails to speak or expressly defers to state law.
  • While bankruptcy cases are always filed in United States Bankruptcy Court (an adjunct to the U.S. District Courts), bankruptcy cases, particularly with respect to the validity of claims and exemptions, are often dependent upon State law. State law therefore plays a major role in many bankruptcy cases, and it is often not possible to generalize bankruptcy law across state lines.
  • Generally, a debtor declares bankruptcy to obtain relief from debt, and this is accomplished either through a discharge of the debt or through a restructuring of the debt. Generally, when a debtor files a voluntary petition, his or her bankruptcy case commences.
  • There are six types of bankruptcy under the Bankruptcy Code, located at Title 11 of the United States Code:
    • Chapter 7: basic liquidation for individuals and businesses; also known as straight bankruptcy; it is the simplest and quickest form of bankruptcy available
    • Chapter 9: municipal bankruptcy; a federal mechanism for the resolution of municipal debts
    • Chapter 11: rehabilitation or reorganization, used primarily by business debtors, but sometimes by individuals with substantial debts and assets; known as corporate bankruptcy, it is a form of corporate financial reorganization which typically allows companies to continue to function while they follow debt repayment plans
    • Chapter 12: rehabilitation for family farmers and fishermen;
    • Chapter 13: rehabilitation with a payment plan for individuals with a regular source of income; enables individuals with regular income to develop a plan to repay all or part of their debts; also known as Wage Earner Bankruptcy
    • Chapter 15: ancillary and other international cases; provides a mechanism for dealing with bankruptcy debtors and helps foreign debtors to clear debts.
  • The most common types of personal bankruptcy for individuals are Chapter 7 and Chapter 13. As much as 65% of all U.S. consumer bankruptcy filings are Chapter 7 cases.
  • Congress enacted new bankruptcy laws effective Oct. 17, 2005. A number of media reports & creditors have left you believing that it was impossible to get relief from financial problems by filing bankruptcy.
  • The fact remains that chapter 7 and 13 bankruptcy is available to allow people in financial trouble to get a fresh start.
  • Chapter 7 takes away most debts.Chapter 7 allows you to retain automobiles or homes, providing you maintain your payments and keep them current.Recent taxes are not eliminated. Government Guaranteed Student Loans are not eliminated.Only in some extreme and special hardship circumstances will student loans discharge.Most other debts are eliminated or discharged with a chapter 7 bankruptcy.
  • Chapter 13 also eliminates most debts as a chapter 7, but a chapter 13 requires a monthly payment to court for a period of 36-60 months.
  • Chapter 13 is required for higher income families. If the families income is above the median income the family will probably be required to file a chapter 13.

...................... (figures updated 02-01-07 per lastest IRS guidelines)

.........................Family size ...................................Median Income
..............................1 ...................................................$34,072
..............................2 ...................................................$43,327
..............................3................................................... $48,423
..............................4................................................... $54,854
..............................5................................................... $61,154
..............................add $6,300 for each additional family member
  • Those who file a chapter 13, and are above the median income will be required to make monthly payments to the court for 60 months to pay a portion of the unsecured debt owing. The payments are based upon your monthly income. Those who file a chapter 13 and are below the median income will also be required to make monthly payments to the court, but may be a payment plan that runs for 36-60 months.
  • Chapter 13 can also be used to retain a home, if a family is behind in payments, or to pay delinquent personal taxes.
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This page (Bankruptcy in Oklahoma) was first created by admin on Apr 7, 2010 2:40 pm and to date has been edited 12 times, with the last edit made by sfazeli on May 11, 2010 9:13 pm.

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