The Process of Chapter 7 Bankruptcy

Bankruptcy

Financials are already difficult to manage. And when you find yourself at a standstill facing bankruptcy, it’s easy to feel trapped. While you’re already struggling to pay living expenses, it seems any money you’re able to put towards your debt barely scratches the surface. So how do you take down a mountain that’s continually growing?

The public perspective surrounding bankruptcy is often a negative one, but in actuality, gives the debtor a new opportunity for a financial fresh start. Stopping garnishments, lawsuits and all other attempts to collect debt are just a few of the benefits. And the myth that it ruins your credit is just that. After you file a Chapter 7 bankruptcy, your credit rating will start improving upon discharge and you should be able to purchase a car or home at a traditional rate within two years.

Wondering how Chapter 7 works? There’s nothing we love more than helping people get their lives back. Give this article a quick read and give us a call at (405) 801-2515 with any questions you may have.

 

Before You Begin

To qualify for a Chapter 7 bankruptcy, you must show you’ve received credit council from an agency six months prior to filing.

 

File a Petition

When you file, you must complete a bankruptcy petition, a number of schedules containing detailed information about your finances, and Means Test form.

 

Complete the Means Test

Here, you’ll compare your household income to the Oklahoma median. If it’s less than the median, you’ll be eligible to file for Chapter 7. If not, you still may qualify but will have to provide detailed information about your expenses and debt payments.

 

Submit Local Forms

Some courts may require bankruptcy filers to complete local forms. If yours does, contact the bankruptcy filing clerk, some may even be online.

 

File in the Correct Court

In Oklahoma, there are three judicial courts. You have the option to file under where you’ve been living in the 180-day period prior, or the district your home is located. In most cases, you’ll be required to appear before your case trustee to answer any questions about your finances. 

Western District - Oklahoma City

Northern District - Tulsa

Eastern District - Muskogee

 

Explore Your Exemptions

Before you finish, you’ll want to explore your options for exemptions. These exemptions allow you to protect property from bankruptcy. Under state law, Oklahoma residents may elect to claim the following items:

Property up to 160 acres

Personal injury claims up to $50,000

Household furnishings

One motor vehicle up to $7,500

Trade tools up to $10,000

Clothing up to $4,000

Wedding rings up to $3,000

Firearms up to $2,000

Cash value of insurance policies

Misconceptions About Bankruptcy

Everyone will know I've filed for bankruptcy. 
The chances are very good that the only people who will know about a filing are your creditors. While it's true that bankruptcy is a public legal proceeding, the numbers of people filing are so massive and opposed to local court filings Bankruptcy is a federal filing and not published on the free state websites.

All debts are wiped out in Chapter 7 bankruptcy. 
Certain types of debts cannot be discharged, or erased. They include child support and alimony, student loans, restitution for a criminal act and debts incurred as the result of fraud.

I'll lose everything I have. This is the misconception that keeps people who really should file for bankruptcy from doing it. Oklahoma has very
debtor-friendly bankruptcy exemption laws that protect certain kinds of assets, such as your house, your car (up to a certain value), money in qualified retirement plans, household goods, and clothing.  Most people pass through a bankruptcy case and keep everything they have If you have a mortgage or a car loan, you can keep those as long as you keep making the payments.

I'll never get credit again. 
Quite the contrary. Credit is based on an ability and desire to pay.  At the time of filing bankruptcy, a debtor can’t typically show these factors.   After filing, your discharge should be obtained in about 90 days.  After discharge, a debtor can show an ability and desire to pay, receive credit and within two years should have a credit score as high as it’s ever been.

If you're married, both spouses have to file for bankruptcy
Not necessarily. It's not uncommon for one spouse to have a significant amount of debt in their name only. However, if spouses have debts they want to discharge that they're both liable for, they should file together. Otherwise, the creditor will simply demand payment for the entire amount from the spouse who didn't file.

Only deadbeats file for bankruptcy. 
Most people file for bankruptcy after a life-changing experience, such as a divorce, the loss of a job or a serious illness. They've done everything in their power to stay afloat but circumstances place them where a Fresh Start is the best option.

The Oklahoman Oil Economy

In Oklahoma, the oil economy is hurting. Will we see a repeat of the 1980's crises? Petroleum industry layoffs reduce the amount of disposable income of these unfortunate workers and, as a result, affects all jobs in Oklahoma.

The collapse of the oil industry in the 1980’s directly or indirectly led to the failure of 200 banks. Tens of thousands lost their jobs. State revenues plummeted along with the price of oil, creating years of budget cuts and tax hikes. Teachers were laid off, and the Oklahoma Highway Patrol idled cars to save gas.

Today with oil selling for about a third of two years ago, the state's oil and gas companies are cutting back, industry job losses are mounting, and state government is being slashed. Oklahoma's economy is ranked near the nation's worst. Since June 2014, Oklahoma has lost 11,600 energy jobs and 59 percent of its active oil and gas rigs.

If you are one of the many in Oklahoma that find themselves in dire financial strain due to layoffs or other economic reasons, bankruptcy may be the answer for you. Filing for bankruptcy will stop those stress-inducing calls from creditors, law suits and even garnishments.

You should be able to keep all your personal property, as Oklahoma has generous exemption laws. After filing a bankruptcy petition, you can have your discharge in about 90 days and your credit should start to improve immediately. The bankruptcy laws are here to protect you, the individual that needs a fresh start.

 

How to Keep Your Tax Refund and File for Bankruptcy

It’s that time again, tax season! You're probably looking forward to receiving a big tax refund check and have been working hard to get your bankruptcy case filed. So, what happens to your tax refund in a bankruptcy case? We’ve said it time and again, tax refunds are the number one asset that trustees routinely take from debtors. Trustees love to go after tax refunds because, unlike real estate and other assets, there isn’t the overhead and effort associated with listing the property for sale. With cash, they can get a check.
 
On the day that the bankruptcy is filed, any assets you own become part of the “bankruptcy estate”. Your tax refund is one of those assets. A trustee is appointed to represent your creditors, collecting assets and liquidating those assets to pay your creditors. In many Chapter 7 cases, there simply are not enough assets or cash to make it worthwhile for the trustee to take those to pay the creditors. Unfortunately, if you are owed a large tax refund, that may be an easy target for the trustee. With a little planning, we can help you keep most, if not all, of your tax refund.

Bankruptcy Exemptions in Oklahoma

In Oklahoma, debtors generally find that their property is protected from creditors when filing Chapter 7 Bankruptcy. In other words, debtors can and in almost all cases, keep exempted and secured property after filing.

Common property exempted in Oklahoma can include clothing, household furnishings, vehicles, some retirement accounts, tools of trade, 75% of wages earned in 90 days, some livestock among other things before filing bankruptcy.

Bankruptcy law usually allows married couples to file jointly in order to each claim a full set of exemptions. Property secured by a loan such as a car or home where the debtor is current on payment, is also protected. The debtor can elect to keep making payments on the loan and keep their property during bankruptcy.

How Does a Probate Work?

The process of a probate can be lengthy and tedious. However, below is a simplified probate process, to give you an idea of how it all works.
Before we can describe the process of a probate though, you need to know what one is. A probate is a court-supervised process of administering a deceased person’s assets to creditors and heirs. 


However, the probate process is a little more complicated than that simple definition. First, you need to file a petition with the probate court in the appropriate county. The court will determine the heirs, ensure the estate is distributed according to law and that all valid creditor's claims are paid.

Why Hire a Criminal Defense Attorney?

Why Should You Hire a Criminal Defense Attorney?
The question is simple. The answer seems simple too: to protect your rights in a court of law. Believe it or not, the process itself is complicated. At John W. Cloar Attorney at law P.C., we represent clients who have been accused of misdemeanor criminal charges, felony charges or DUIs. It is our job to protect your rights and freedoms in the court of law. 


So why hire an attorney? Why not defend yourself? An experienced attorney will have the knowledge and expertise to negotiate a favorable plea, obtain a dismissal or present your matter to a jury. 
 
When you are accused of a crime, the constitution gives you a right to defend yourself in the court of law using an attorney. So take advantage of your rights. Hire John Cloar today to help you with your criminal defense . 

Chapter 7

The thought of filing for chapter 7 bankruptcy can be frightening and nerve racking. Your entire life you’ve been taught that bankruptcy=bad. Well, that’s not really the case. There are many reasons why you should file for Chapter 7 bankruptcy, but only do it if you really need to. 
When you file for bankruptcy, you are granted an “automatic stay.” An automatic stay is an injunction that halts actions by creditors to collect debts form a debtor who has declared bankruptcy. This includes wage garnishments, repossession, utility disconnections and collection notices. Despite the automatic stay, you may receive harassing phone calls from debtors trying to collect. As your representative, John W Cloar can manage those phone calls for you along with other collection actions including litigation.


Contrary to popular belief, Chapter 7 Bankruptcy is designed to be a relatively quick process, sometimes taking only 3-4 months to obtain a discharge of debt. It’s also designed to enable you to keep your home or other personal property to have a real chance at a fresh start. Additionally, after your discharge, your credit will begin to improve immediately.
Bankruptcy has gotten a bad rap over the years, when in reality, there are many benefits of filing for chapter 7 over drowning in debt. Bankruptcy may sound scary, but with the right lawyer on your side, it can really make a positive impact.

Why You Should File Bankruptcy at the Beginning of the New Year

If you ask any bankruptcy lawyer what they feel the best time is for filing bankruptcy, you’ll likely hear a resounding, “Now!” In truth, waiting around to file bankruptcy increases your risk for wage garnishments, lawsuits, auto repossession, and even foreclosure of your home. The New Year is here now, and there are many reasons why you should consider the first quarter as a good starting point for filing bankruptcy.

Purge Debt from the Holidays

It’s currently estimated that Americans spend nearly $10 more on average each day in the month of December than they do in any other month of the year. When added up, this creates a $300 increase in spending that is likely done with a credit card. This is why it makes sense to file for bankruptcy at the beginning of the New Year.

Credit Card Debt Specifications

As you would assume, there are some stipulations that come along with purging credit card debt. Credit card companies are savvy when it comes to borrower deception, and many will notice unusually frequent use of credit just before a borrower files bankruptcy. Some purchases made just prior to bankruptcy may be legitimate. The Courts look at your intent, which means when you incurred the debt did you have the intention and means to pay it back.

I always advise my clients that when they decide to file for bankruptcy they should stop using their credit cards and also stop paying on them. This way the funds that were being paid to the credit cards can be used to cover the attorney and Court fees to get the bankruptcy case filed.

It is further detailed in the Bankruptcy Code that goods and services are not labeled under “luxury” if they are absolutely necessary to the borrower or a dependent of theirs. For example, gas for work travel that is charged to a credit card doesn’t qualify as being a luxury expense. 

If you carried a credit card balance of over $650 for goods such as groceries, gas, and home necessities, you would be in the clear. Not carrying a debt over $650 will prevent you from having to even explain any charges in the first place.

Something to Think About Before Your File Bankruptcy

Once you make the decision to work with an attorney on a bankruptcy case, cease use of your credit cards at once. Using credit while you are openly filing for bankruptcy is a direct indication that you likely have no intentions of paying it back. This is known as fraud, and you could easily be charged in a court of law for doing this.