Considering Bankruptcy?

Authored By: Legal Aid Services of Oklahoma, Inc. LSC Funded


Bankrutpcy may be your key to a fresh start. But how can you know?

You'll need to talk with a lawyer, but first, take 5 minutes to learn more about bankruptcy and see if it might help you.

About Bankruptcy

What is Chapter 7?

In a Chapter 7 bankruptcy, you file court papers asking that certain unpaid debts be wiped out. Most debts are wiped out after a Chapter 7 bankruptcy, including credit card debt, medical bills, and civil judgments.

Bankruptcy also stops wage garnishment and harassment by collection agencies. Studies show that in 96% of cases, people who file for Chapter 7 get to keep all their property. Most of the cases where property is taken by the court involve real estate or tax refunds.

if you have filed a Chapter 7 previously, you may be able to file a Chapter 13 bankruptcy after 4 years.  If you have filed a Chapter 7 previously, you must wait 8 years to file another Chapter 7.

What is Chapter 13?

A Chapter 13 Bankruptcy is basically a debt-consolidation. What that means is that you pay your debts over a period of time, usually from three to five years. In most cases, the amount you pay will be less than what you actually owe. You pay what you can and the rest is discharged. Creating a "plan" to pay back your creditors is a fairly complicated process and you will definitely need an attorney to help you. A Chapter 13 bankruptcy is best for individuals who owe taxes, are behind on home mortgages, have co-debtors they want to protect, have property that needs to be protected or who have a substantial amount of income left over every month after basic living expenses.

If you want to file a Chapter 13 bankruptcy, you must have a job. You must also be able to show that you will have money left over every month after you deduct living expenses to pay into your repayment plan. You should be aware that new changes in the bankruptcy law may make it necessary for a lot more people to file a Chapter 13 rather than a Chapter 7, especially if there is any income left over after monthly living expenses are taken out

What debts do not get wiped out?

Filing for bankruptcy is not a good idea for everyone. It is a serious step and you need to understand the costs of filing. It's important to understand that the following debts cannot be canceled in a Chapter 7 bankruptcy:

  • Student loans in most cases
  • Loans on a car that you still own and want to keep
  • Unpaid child support or alimony payments
  • Unpaid fines
  • Most tax debts
  • Debts due to fraud, theft, or embezzlement
  • Damages to another person caused by drunk driving or conduct done on purpose
  • Debts from a property settlement in a divorce
  • Some other types of debts

These debts must still be listed on the bankruptcy papers filed with the court, but they can’t be wiped out.

What else is important to know?

  • Bankruptcy doesn't release you from large credit card debts that happened right before the bankruptcy was filed
  • You cannot erase debts that you get after filing for bankruptcy
  • You will unlikely be able keep valuable property, such as a vacation home, an RV, or expensive jewelry
  • Bankruptcy stays on your credit report for 10 years
  • You can only get a Chapter 7 discharge once in an eight-year period
  • You may be able to protect your income and property without filing bankruptcy

How much does bankruptcy cost?

There are three things a debtor may need to pay for. They're all required by the bankruptcy court.

  1. $335 filing fee (Chapter 7)
    $310 filing fee (Chapter 13)
  2. Around $10-$20 for online pre-bankruptcy course
  3. Around $10-$20 for online post-bankruptcy course

If debtors earn less than a certain amount, they may qualify for a fee waiver and you won't have to pay anything.

Legal Aid Services of Oklahoma may be able to assist you with a bankruptcy. In some cases, you can represent yourself. 

Legal Aid Pro Se Bankruptcy Clinic

  • Legal Aid may be able to help you prepare the court documents you need to file your bankruptcy court papers on your own.
  • You must be able to use a computer. 
  • This is a special program to help some low-income people in Western Oklahoma but only if you live and will file in the Western District of Oklahoma's Bankruptcy Court.
  • Here's a map to guide you. The Western District is highlighted in yellow.

Oklahoma bankruptcy court districts by county

If you live in a county in the Western District, Legal Aid may be able to help you.
You must make an appointment to see if you qualify:

· call 405-521-1302 to talk with someone about qualifying

· have a deadline? Let us know!

Last Review and Update: Sep 07, 2018

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