What is an asset hearing?
An asset hearing is a way to help a creditor to collect on a judgment. The only reason to have an asset hearing is for the creditor to find any money that can be garnished or property on which a lien may be placed. A creditor must have a judgment against you before it can ask for an asset hearing.
In Oklahoma, there are three ways that a creditor can collect on a judgment. The creditor can:
1) garnish your wages;
2) garnish your bank account; or
3) place a lien on any real property that you may own.
What will happen at the hearing?
At the hearing, either the judge or the creditor's attorney will ask you questions about your finances, your employment, your bank account, your other debts and your property. You must answer all questions truthfully because the judge will put you under oath. If there is a question that you do not feel you should have to answer, you should tell the judge and the judge will decide whether you have to answer or not.
The whole point of the hearing is to find out if you have a way to pay anything on your judgment. The judge may decide that you have enough income to enter into a payment arrangement with the creditor and ask you to do so. DO NOT AGREE TO MAKE ANY PAYMENTS THAT YOU CANNOT KEEP UP WITH!!! If a judge orders you to pay a certain amount and you do not, you could be held in contempt of court.
Do I have to go to the hearing? YES! Anytime you are ordered to appear before the court, you must comply or there will be a bench warrant issued for your arrest. You should be aware that a creditor can ask for an asset hearing to take place somewhere other than the courthouse. For example, the creditor make request that you come to the creditor's attorney's office.
Can the creditor take all of my property to pay my debts?
No. In Oklahoma, there are several items of property that cannot be taken to pay on a judgment. These items are known as "exempt property". For example, a creditor cannot force you to sell your home (if you live there) to pay your debts. Sometimes a creditor can place a lien on your property so that when you do decide to sell it, the creditor will be paid out of the proceeds. A list of exempt property is below.
How should I prepare for the asset hearing?
The most important thing you can do is show up. However, before the hearing make a list of all of your income and expenses so that you can provide the court with a copy. On the day of the hearing, do not wear any flashy jewelry or carry a lot of cash in your pocket. It is probably a good idea to have a copy of the property exemptions with you. If a creditor attempts to take your jewelry or cash that you have in your pocket, you can refer to the list of exemptions to see if they can take it or not. Finally, do not make payment arrangements that you know you cannot make.
Can I Stop the Garnishment of my Paycheck?
If you have a family or other dependents that depend on your income to live, you can apply for an Undue Hardship Exemption. There is a specific court form to ask for an Exemption Hearing.
EXEMPT PROPERTY(Oklahoma Statutes, Title 31 § 1)
A. Except as otherwise provided in this title and notwithstanding subsection B of this section, the following property shall be reserved to every person residing in the state, exempt from attachment or execution and every other species of forced sale for the payment of debts, except as herein provided:
1. The home of such person, provided that such home is the principal residence of such person;**
**This homestead exemption does not apply when the debt was for the purchase of the homestead. (Oklahoma Statutes, Tit. 31, §5). In this situation, the creditor files a foreclosure.
2. A manufactured home, provided that such manufactured home is the principal residence of such person;
3. All household and kitchen furniture held primarily for the personal, family, educational or household use of such person or a dependent of such person, including a personal computer and related equipment;
4. Any lot or lots in a cemetery held for the purpose of sepulcher;
5. Implements of husbandry necessary to farm the homestead and tools, apparatus and books used in any trade or profession of such person or a dependent of such person, not to exceed Ten Thousand Dollars ($10,000.00) in aggregate value;
6. All books, portraits and pictures that are held primarily for the personal, family or household use of such person or a dependent of such person;
7. The person's interest, not to exceed Four Thousand Dollars ($4,000.00) in aggregate value, in wearing apparel that is held primarily for the personal, family or household use of such person or a dependent of such person;
8. The person's interest, not to exceed Three Thousand Dollars ($3,000.00) in aggregate value, in wedding and anniversary rings;
9. All professionally prescribed health aids for such person or a dependent of such person;
10. Five milk cows and their calves under six (6) months old, that are held primarily for the personal, family or household use of such person or a dependent of such person;
11. One hundred chickens, that are held primarily for the personal, family or household use of such person or a dependent of such person;
12. Two horses and two bridles and two saddles, that are held primarily for the personal, family or household use of such person or a dependent of such person;
13. Such person's interest, not to exceed Seven Thousand Five Hundred Dollars ($7,500.00) in value, in one motor vehicle;
14. Guns, not to exceed Two Thousand Dollars ($2,000.00) in aggregate value, that are held primarily for the personal, family or household use of such person or a dependent of such person, provided that nothing in this subsection shall be construed to allow a person to exempt guns which are used mainly as an investment or nonpersonal, family or household use;
15. Ten hogs, that are held primarily for the personal, family or household use of such person or a dependent of such person;
16. Twenty head of sheep, that are held primarily for the personal, family or household use of such person or a dependent of such person;
17. All provisions and forage on hand, or growing for home consumption, and for the use of exempt stock for one (1) year;
18. Seventy-five percent (75%) of all current wages or earnings for personal or professional services earned during the last ninety (90) days, except as provided in Title 12 of the Oklahoma Statutes in garnishment proceedings for collection of child support;
19. Such person's right to receive alimony, support, separate maintenance or child support payments to the extent reasonably necessary for the support of such person and any dependent of such person;
20. Subject to the Uniform Fraudulent Transfer Act, Section 112 et seq. of Title 24 of the Oklahoma Statutes, any interest in a retirement plan or arrangement qualified for tax exemption or deferment purposes under present or future Acts of Congress; provided, any transfer or rollover contribution between retirement plans or arrangements which avoids current federal income taxation shall not be deemed a transfer which is fraudulent as to a creditor under the Uniform Fraudulent Transfer Act. "Retirement plan or arrangement qualified for tax exemption purposes" shall include without limitation, trusts, custodial accounts, insurance, annuity contracts and other properties and rights constituting a part thereof. By way of example and not by limitation, retirement plans or arrangements qualified for tax exemption or deferment purposes permitted under present Acts of Congress include defined contribution plans and defined benefit plans as defined under the Internal Revenue Code ("IRC"), individual retirement accounts, individual retirement annuities, simplified employee pension plans, Keogh plans, IRC Section 403(a) annuity plans, IRC Section 403(b) annuities, Roth individual retirement accounts created pursuant to IRC Section 408A, educational individual retirement accounts created pursuant to IRC Section 530 and eligible state deferred compensation plans governed under IRC Section 457. This provision shall be in addition to and not a limitation of any other provision of the Oklahoma Statutes which grants an exemption from attachment or execution and every other species of forced sale for the payment of debts. This provision shall be effective for retirement plans and arrangements in existence on, or created after April 16, 1987;
21. Such person's interest in a claim for personal bodily injury, death or workers' compensation claim, for a net amount not in excess of Fifty Thousand Dollars ($50,000.00), but not including any claim for exemplary or punitive damages;
22. Funds in an individual development account established pursuant to the provisions of Section 251 et seq. of Title 56 of the Oklahoma Statutes;
23. Any amount received pursuant to the federal earned income tax credit; and
24. Any interest in an Oklahoma College Savings Plan account established pursuant to the provisions of Section 3970.1 et seq. of Title 70 of the Oklahoma Statutes.
B. No natural person residing in this state may exempt from the property of the estate in any bankruptcy proceeding the property specified in subsection (d) of Section 522 of the Bankruptcy Reform Act of 1978, Public Law 95-598, 11 U.S.C.A. 101 et seq., except as may otherwise be expressly permitted under this title or other statutes of this state.