Most of the prospective clients that I speak to are concerned about what property they may keep after filing bankruptcy. The answer depends on the state that you reside in. Oklahoma has defined its exemptions as to what property is protected and has one of the more liberal and generous laws in the entire country. As you will see reading forward, it is easier to know what isn’t protected than what is since the vast majority of people residing in Oklahoma’s possessions are protected and can be kept after filing Ch. 7 Bankruptcy.
A vehicle is protected by Oklahoma’s exemption laws up to $7,500.00 equity. That means that as long as you don’t have more than $7,500.00 equity in a vehicle, then you have no risk of losing it. In the Western District of Oklahoma which includes the OKC Metro area, the value is determined by the retail value as listed by NADA which you can find on a web search. As an example, let’s say that the NADA value of your vehicle is $15,000.00 and you have a loan with a balance of $7,500.00. The difference between the value and balance of the loan is your equity. In this scenario, your equity is $7,500.00 and you will be able to keep your vehicle. Similarly, if you have a vehicle that is paid for and has no loan against it, so long as the value of the vehicle is under $7,500.00 you are safe. You can exempt a motorcycle as well if that is the vehicle that you want to keep but you can only exempt one vehicle per person. That doesn’t mean that you will automatically lose a second vehicle, it just means that you can only exempt one vehicle. Let’s say that you have a newer vehicle that you don’t have any equity at all in and you have an older vehicle that your child drives that is paid for. In that scenario, you would exempt the older vehicle. The newer vehicle doesn’t have any equity and, therefore, there would be nothing gained by taking that vehicle and auctioning it off by the trustee because the trustee would have to pay back the lienholder (bank that has the loan) leaving nothing for your other creditors.
In Oklahoma, your house is exempt more or less regardless of how much equity you have. Compare that with the states of Kentucky and Tennessee which protect only $5,000.00 of equity in your house and you see how fortunate you are to live in Oklahoma as a homeowner.
Just about everything that the average household in Oklahoma has such as clothes, furniture, home furnishings are also protected by state law exemptions. While there is not a specific exemption for electronics yet (such as cellphones, tvs, etc), I have yet to see any trustee try to take any of these. Now, if you have a loan or lease agreement against any furniture or appliance then what I’m saying doesn’t necessarily apply. In that case, you may have to continue to pay on those items if you want to keep them.
There are many exemptions specified in state law including firearms, earnings, wedding rings, livestock, tools of the trade, health aids, retirement benefits, life insurance proceeds, personal injury lawsuit proceeds, etc. These often have limitations to exemptions so that is a very important conversation to have with your bankruptcy attorney prior to filing the Ch. 7 Bankruptcy. Contact me at (405) 255-2380 or email@example.com.