What is Bankruptcy?
A
personal bankruptcy filing is a legal proceeding by which a person
seeks relief from their obligation to pay bills, loans and credit card
debt that they are financially unable to pay. As a result of many
factors people are unable to pay their bills. The most common reason
someone files bankruptcy is divorce. Other reasons for filing include
job layoffs and unforeseen medical expenses arising from accident and
illness.
What bankruptcy options are available?
Most
debtors will elect to file for relief under either Chapter 7 or Chapter
13 of the Bankruptcy Code. Chapter 7 is referred to as a fresh start
filing wherein the debtor’s nonexempt assets are taken to satisfy the
claims of creditors. The remaining debt is wiped clean giving the
debtor a fresh start to a new life. In many cases under Chapter 7, a
debtor will have no assets that can be taken to satisfy the claims of
creditors and all debts are discharged without the creditors receiving
anything. The court simply refers to these as “no asset” cases. Under
Chapter 13, a debtor agrees to a payment plan wherein all of the
debtor’s income not otherwise needed to maintain a household is paid to
the Bankruptcy Court for disbursement to creditors. Payment plans are
either 36 or 60 months long depending on the income and the debts of
the filing party. Relief is also available for a family farm operation
under Chapter 12.
What property can I keep if I file Bankruptcy?
Oklahoma
is one of the most liberal states in the country when it comes to
exempting property from the claims of creditors. With a few
limitations, a debtor can keep his or her home, clothes, furniture, a
vehicle, tools that they use for work or to work a farm, and can even
keep a certain number of horses, cows, chickens, etc. And, the only
time a creditor can claim one of these items is when they have a
perfected security interest in it, such as the mortgage company’s claim
on the house or the banks lien on a vehicle.
Will I lose my retirement savings account?
No,
the exemptions under both Federal and State law protect your retirement
contributions and all interest that it has accumulated over the years.
Provided, that you do not change the character and identity of the
funds by withdrawing the money from your retirement account. If you do
withdraw the funds they are then considered an asset that the
Bankruptcy Court can attach to repay your creditors.
What if I still owe on an item and I want to keep it after the bankruptcy?
If
a debtor still owes on an item, say a vehicle or home, they can elect
to either let the creditor reclaim the item or they can reaffirm the
debt. Reaffirmation is a contractual agreement between the debtor and
the creditor whereby the debtor agrees to pay for the item after the
bankruptcy court discharges the rest of the debts. Once a final
agreement is reached between the debtor and creditor, the debtor is
obligated to repay the indebtedness in exchange for the right to keep
the property. Debtors must be careful that they do not reaffirm too
much debt or they will waste the relief that the bankruptcy can provide.
Will filing for bankruptcy relief eliminate all of my debt?
The
answer lies in what type of debt you have. If your debt is largely
consumer debt like credit cards or a car payment then yes, you probably
will get complete relief if you want to be debt free, but you might
have to give up some of the purchases you made to be completely debt
free. However, if your debt includes school loans, taxes, child support
or spousal support then you will probably not get completely out of
debt by filing bankruptcy, but, you may gain enough relief that you can
repay the debt that does survive the discharge in bankruptcy.
Will my credit be forever ruined?
Although
the fact that you filed bankruptcy will remain on your credit report,
many people find that after they file for bankruptcy relief they are
bombarded with offers from companies willing to extend them credit.
Typically credit will be offered at a higher rate of interest then they
might otherwise have paid to offset the credit risk. The problem lies
in that the relief provided by bankruptcy can only be taken advantage
of once every six years. If a person takes advantage of all the credit
being extended they will quickly be back to where they started and will
have to endure the obligation of repaying the debt.
Will my creditors stop calling me all the time?
Yes,
once the petition is filed the creditors are no longer permitted to
make attempts at collecting the debt. The easiest thing to do is tell
the collector that you have spoken with an attorney about bankruptcy
and they will usually back off. Once the petition has been filed, give
the collector the petition number when they call and that will be the
end of the phone calls. Most people will tell you that this gives them
the greatest piece of mind and the quickest sense of relief. And, most
people will tell you that they wished they had filed sooner then they
did.
How long does it take to file bankruptcy?
Well,
the answer lies with you. In order to prepare a bankruptcy petition, we
need information that only you can provide. So, we have prepared a
questionnaire that you take home and fill out. The questions, when
answered, provide us with all the information necessary to prepare
petition for filing with the court. If the debtor is filing for relief
under Chapter 7, a discharge will typically be issued within three
months. If the debtor files a plan under Chapter 13 then the plan must
be paid out over 36 or 60 months.
How do I start?
Starting
is easy, simply call and schedule an appointment with me, Matthew E.
Riggin. We will discuss your options and start you down the path of
debt relief.
For additional information, Matt Riggin can be reached at (918) 251-0213 or mriggin@tulsacoxmail.com.
