Are you considering filing for bankruptcy in Oklahoma? If so, you’re probably feeling stressed and overwhelmed. In order to make the best decision for your situation, you must understand your options before filing for bankruptcy. In this blog post, we’ll provide an overview of the bankruptcy process in Oklahoma to help you determine whether or not bankruptcy is the right choice for you.
What Is Bankruptcy?
Bankruptcy provides debtors with a fresh start by discharging their debt. Bankruptcy automatically stops all collection activities, such as wage garnishments, foreclosures, and repossessions. Therefore, creditors cannot collect your debts.
Reasons to Consider Filing for Bankruptcy
There are numerous reasons why you might consider declaring bankruptcy. Often, bankruptcy occurs because of large amounts of debt, struggle with loan payments, or excessive credit card usage.
Other reasons to consider bankruptcy include:
- Being pursued by creditors
- Being in danger of home foreclosure
- Being behind on debt payments
You should seek help from a bankruptcy lawyer in any of these circumstances.
Alternatives to Bankruptcy
Making the decision to file for bankruptcy can be daunting. Before making any major financial decision, it is important to know your options.
Debt settlement and credit counseling are good alternatives to bankruptcy. In any case, it is always advisable to consult a financial advisor before making any major decisions.
With debt consolidation, you can reduce your interest costs and repay your debts faster. Last but not least, it is always worthwhile to negotiate with creditors. A successful agreement can prevent bankruptcy, despite the difficulties involved.
The Types of Bankruptcy for Individuals
There are two types of bankruptcy that individuals can file in Oklahoma: Chapter 7 and Chapter 13.
Chapter 7
Chapter 7 bankruptcy, or liquidation bankruptcy, lets you discharge or get rid of certain types of debt. Most people first consider this option since it is cheap and can be completed quickly since creditors don’t get paid. However, this type of bankruptcy is mainly appropriate for people with few assets, as people with more assets may risk losing them. Furthermore, there are no payment plans for catching up on mortgage or car payments if you are delinquent at the time of filing.
Chapter 13
In contrast, Chapter 13 permits debtors to repay their debts within three to five years. Unlike Chapter 7 bankruptcy, Chapter 13 allows you to keep all your property and avoid foreclosure. A payment plan can also be negotiated with a creditor if the debt cannot be discharged.
How to File for Bankruptcy in Oklahoma
If you are considering filing for bankruptcy in Oklahoma, you should know how the process works. The steps to take have been detailed below.
- Gather Your Oklahoma Bankruptcy Documents: This includes copies of your tax returns for the past two years and your last 60 paycheck stubs.
- Sign Up for a Credit Counseling Course: Find course information here.
- Fill Out the Bankruptcy Forms: You can download the forms free through USCOURTS.gov.
- Pay the Filing Fee: You must pay $338 to file for bankruptcy under Chapter 7. If you earn less than 150% of the poverty guidelines and cannot afford the filing fee, you can request a fee waiver.
- Print the Bankruptcy Forms: Use black ink to print all forms on white, 8.5″ x 11″ paper.
- File the Forms With the OklahomaBankruptcy Court: Depending on where you live, you must file your bankruptcy petition in the Western, Northern, or Eastern District of the Oklahoma bankruptcy court. You may file either in person or by mail, regardless of which District applies. Attorneys are currently the only ones who can file electronically in some districts, but this may soon change.
- Mail Documents to Your Trustee: After filing for bankruptcy, you will be assigned a trustee.
- Take Another Course: Take a debtor education course within 60 days after the 341 meeting.
- Attend Your 341 Meeting: Your creditors will attend this meeting and ask questions.
What Happens After Bankruptcy?
Most unsecured debts are forgiven in bankruptcy, so you won’t have to repay them. Student loans, child support, and alimony, however, cannot be forgiven through bankruptcy. A bankruptcy filing may also result in the forfeiture of some belongings depending on the type of bankruptcy processed.
How Will Bankruptcy Impact My Credit?
Bankruptcy generally affects your credit score for seven to ten years. Consequently, you may have difficulty getting a loan or credit line in the future.
Rebuilding Your Credit Score Post Bankruptcy
Though bankruptcy is a hard hit on your credit score, you can rebuild your credit slowly by:
- Making on-time payments.
- Keeping a good payment history.
- Getting a secured credit card.
- Becoming an authorized credit card user.
- Applying for a small loan.
- Keeping an eye on your credit report for errors.
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