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Filing bankruptcy in Oklahoma can provide debt relief for individuals and businesses struggling financially. In many cases, people have tried for months or years to get out of debt. The bankruptcy system gives individuals the help they need to get rid of debts they cannot afford to pay and get a fresh start to rebuild their finances. Getting a fresh start from bankruptcy can be the key to healthier financial wellbeing in the future.

If you are interested in filing bankruptcy in Oklahoma, keep reading to learn more about:

  • Means Testing in Oklahoma — How Does the Means Test Impact My Bankruptcy Case?
  • Oklahoma Bankruptcy Exemptions
  • Chapter 7 vs. Chapter 13 Bankruptcy in Oklahoma
  • Oklahoma Credit Counseling and Debtor Education Courses
  • Bankruptcy Courts and Trustees for Oklahoma
  • Alternatives to Filing Bankruptcy in Oklahoma

Oklahoma Means Test

How Does the Means Test Impact My Bankruptcy Case? first step in filing bankruptcy is to determine what chapter of bankruptcy you can file. Most people file under Chapter 13 or Chapter 7 of the Bankruptcy Code. However, there are income qualifications for each chapter of bankruptcy.

Chapter 13 bankruptcy requires the debtor (the person who files the bankruptcy case) to have a steady, reliable income to fund a Chapter 13 repayment plan. Chapter 7 has income limits that restrict Chapter 7 to individuals with little to no disposable income. Therefore, the first step is to complete the Means Test to see if you qualify for Chapter 7 or Chapter 13.

What is the Means Test in Oklahoma?

The Means Test is a form used by the bankruptcy court to calculate your current monthly income. Based on your monthly income, the form also calculates your annual median income and disposable income. All three figures are important in a bankruptcy case. 

Current Monthly Income 

CMI (current monthly income) is your average income per month for the past six months. You calculate CMI by dividing the total of all income during the six months before filing bankruptcy by six. 

Income includes earned income, net income from a business, and other sources of income, such as retirement income, interest, workers’ comp, unemployment, dividends, and money contributed toward household expenses from a domestic partner, spouse, roommate, or another person.

The only income that is not included in your monthly income is income from the Social Security Administration. Once you have this information, the means test calculator below can help you estimate Chapter 7 qualification in Okalhaoma. The additional sections on annual median income and disposable income are also important to understand the background of Chapter 7 qualification

Annual Median Income

Annual median income is significant in a bankruptcy case because it determines whether you “pass” the Means Test for a Chapter 7 bankruptcy discharge and the term of your Chapter 13 repayment. If your annual median income is below the Oklahoma median income for a household with the same number of people, you should qualify for Chapter 7 if you meet all other requirements for filing Chapter 7. 

In a Chapter 13 case, a debtor with a median income higher than the Oklahoma median income must propose a 60-month Chapter 13 plan. Debtors with a median income below the state median income level can propose a 36-month Chapter 13 plan. The current median income amounts for Oklahoma households for cases filed on or after May 1, 2020 are:

# of PeopleAnnual Income
1$49,198
2$59,495
3$66,585
4$76,691
5$85,691
6$94,691
7$103,691
8$112,691
9$121,691

Disposable Income

The second part of the Means Test calculates how much money you have left over each month after deducting mandatory payroll deductions and ordinary living expenses. This amount is referred to as disposable income. 

Disposable income is significant because it can help you qualify for a Chapter 7 bankruptcy in Oklahoma if your median income is above the state median income level. Disposable income is also a factor in how much you pay each month in Chapter 13 cases.

Important Note: Some monthly expenses are based on the number of people in your home and national standards based on households throughout the United States. Without proof and a valid reason, you cannot claim more for these expenses, which include clothing, food, transportation costs, out-of-pocket healthcare expenses, and personal care items.

Other expenses you may deduct from current monthly income to calculate disposable income include:

  • Mortgage or rent payments
  • Car loan payments
  • Payroll taxes
  • Mandatory retirement deductions
  • Term life insurance and disability insurance premiums
  • Childcare costs 
  • Court-ordered child support and alimony

You may not be permitted to deduct luxury expenses or expenses that exceed the average amount paid by other households.We have a free Chapter 7 Means Test Calculator that is also above you can use to help you determine if you meet the income requirements for Chapter 7. 

Oklahoma Bankruptcy Exemptions

You are permitted to keep specific property when you file for bankruptcy relief. Most people who file for bankruptcy in Oklahoma can keep all their property by using bankruptcy exemptions. 

Bankruptcy exemptions are included in the federal Bankruptcy Code in 11 U.S.C. §562. However, if you have lived in Oklahoma for more than 730 days, you must use the Oklahoma bankruptcy exemptions, which are relatively generous. 

For example, a debtor can exempt an unlimited amount of equity in real property up to 160 acres located outside of a city or town.  Property located in town is limited to one acre, and there are also restrictions, if the debtor uses more than 25 percent of the property for business purposes. Also, federal law limits your homestead exemption if you have not lived in Oklahoma for at least 1,215 days before filing for bankruptcy in Oklahoma. 

A debtor can exempt up to $7,500 in equity in one motor vehicle. Other exceptions exist for clothing, household goods, wages, retirement accounts, business equipment, public benefits, and other property. 

It is always a good idea to confirm the current bankruptcy exemptions with a bankruptcy lawyer. Exemption amounts and allowed exemptions can change. Because property that is not protected by bankruptcy exemptions could be sold by a Chapter 7 trustee or increase a Chapter 13 plan payment, it is crucial that you understand how exemptions work. We discuss how homestead exemptions work and how cash exemptions work in great detail in our blog. Other exemptions work in the same way.

Chapter 7 vs. Chapter 13 Bankruptcy in Oklahoma

Now that you have completed the Means Test and reviewed the bankruptcy exemptions you may claim, it is time to decide between Chapter 7 and Chapter 13. In some cases, a person who qualifies for Chapter 7 may want to file under Chapter 13. 

However, someone who fails both sections of the Means Test may be required to file under Chapter 13 to receive a bankruptcy discharge. One exception you may want to pursue is the exception for business debts. If your debts are primarily business debts, the Means Test does not apply to you. Talk to a bankruptcy lawyer to determine if you may qualify for this Means Test exception.

Filing Chapter 7 Bankruptcy in Oklahoma

Chapter 7 cases are typically closed and discharged within four to six months after filing, unless the case is an asset case. In an asset case, the Chapter 7 trustee seizes property and sells the property. After the debtor attends the Meeting of Creditors (bankruptcy hearing) and completes the second bankruptcy course, there should be nothing left for the debtor to do in an asset case. The Chapter 7 trustee handles all matters related to the sale of the property and the distribution of the funds to unsecured creditors. 

A Chapter 7 case can be filed by individuals, couples, and businesses that are closed or closing. It is considered the quickest, easiest, and least costly chapter of bankruptcy to file, in most cases. However, as we discussed above, careful consideration must be given to the risk of losing property that is not protected by bankruptcy exemptions. Also, debtors need to ensure they pass the Means Test so that they can receive a bankruptcy discharge in Chapter 7. Otherwise, filing Chapter 7 in Oklahoma will not get rid of their debts.

Our Chapter 7 Guide provides more details about filing Chapter 7 for debt relief.

Filing Chapter 13 in Oklahoma

There are many benefits to filing Chapter 13 in Oklahoma. In addition to getting rid of unsecured debts for a small percentage of what you owe to those creditors, you can prevent foreclosure and repossession. While most people care about whether they qualify in a Chapter 7 in Oklahoma, many people who are considering a Chapter 13 bankruptcy want to estimate what the Chapter 13 plan payment will be, which you can estimate using our Chapter 13 calculator below that uses applicable US bankruptcy forms .

Through your Chapter 13 plan, you can catch up back mortgage payments and restructure your car loan. You can also pay back taxes and unpaid alimony or child support to avoid wage garnishments or levies for those debts. Your Chapter 13 plan payment is based on several factors, including:

  • Your disposable income;
  • The number of months you are required to pay Chapter 13 payments;
  • Whether you have equity in property that is not covered by bankruptcy exemptions;
  • Your recent financial transactions; and,
  • How much you owe in past-due mortgage payments, car loans, and unsecured priority debts, such as tax debts.

You can use our free Chapter 13 plan calculator to estimate the amount of your payments in a Chapter 13 bankruptcy case. You can also get more information about Chapter 13 in our Chapter 13 Guide.

Oklahoma Credit Counseling and Debtor Education Courses

As part of your Oklahoma bankruptcy case, you must complete two bankruptcy courses. The bankruptcy courses are standard for individuals in Chapter 13 and Chapter 7 cases. 

The first course is a Credit Counseling Course. The Credit Counseling Course helps you determine whether filing bankruptcy is the best way to get out of debt. The credit counseling agency may recommend another option for getting out of debt, but you are not required to follow that advice.

The second course is a Debtor Education Course. It is designed to give you the information and tools you need to manage your finances, handle credit wisely, and create personal budgets after completing a bankruptcy.

You must choose an agency approved by the United States Trustee’s Office. You can find a list of the approved Oklahoma bankruptcy course agencies on the UST’s website. Most agencies offer online courses that you can complete in about two hours for a small fee.

Bankruptcy Courts and Trustees for Oklahoma

The federal bankruptcy court is divided into three districts in Oklahoma:

Cases are assigned based on the county of residence of the debtor on the date the bankruptcy case is filed. Bankruptcy trustees are assigned based on the bankruptcy district. Chapter 7 and Chapter 13 trustees are private individuals who work under the supervision of the United States Trustee. There are 18 Chapter 7 trustees and three Chapter 13 trustees serving Oklahoma. Below you will find more information about the specific trustees in Oklahoma:

Oklahoma Chapter 7 Bankruptcy Trustees

DistrictNamePhone
EasternCharles Greenough(918) 587-0000
EasternGerald R. Miller(918) 687-1347
EasternSidney K. Swinson(918) 595-4800
EasternKaren S. Walsh(918) 699-8981
NorthernCharles Greenough(918) 587-0000
NorthernScott P. Kirtley(918) 587-3161
NorthernPatrick Joseph Malloy, III(918) 699-0345
NorthernGerald R. Miller(918) 687-1347
NorthernSteven W. Soule(918) 594-0400
NorthernSidney K. Swinson(918) 595-4800
NorthernKaren S. Walsh(918) 699-8981
WesternKevin M. Coffey(405) 235-1497
WesternGinger L. Goddard(405) 329-5297
WesternDouglas N. Gould(405) 286-3338
WesternJoel C. Hall(405) 600-9500
WesternSusan J. Manchester(405) 278-8880
WesternJohn D. Mashburn(405) 726-9795
WesternLyle R. Nelson(405) 232-3722

Oklahoma Chapter 13 Bankruptcy Trustees

DistrictNamePhone
EasternWilliam Mark Bonney(918) 683-3840
NorthernLonnie Dean Eck(918) 599-9901
WesternJohn T. Hardeman(405) 236-4843

Alternatives to Filing Bankruptcy in Oklahoma

In some cases, you may want to explore non-bankruptcy alternatives for resolving debt problems. There are several ways you can get rid of debt. Debt settlement and debt consolidation are common options for dealing with debt issues. However, both options have pros and cons that you must consider. We provide details about each of these options in our Debt Settlement Guide and Debt Consolidation Guide

You can also explore the Savvy Method. Ascend has used the best options from various debt payoff methods to create the Savvy Method. With Savvy, you control your finances and create a debt payoff plan that works for you. Learn more about the Savvy Debt Payoff Planner here.

Are You Ready to File Bankruptcy In Oklahoma?

If you are ready to file bankruptcy in Oklahoma, we can help you find a bankruptcy lawyer near you. Most bankruptcy attorneys offer a free consultation. We can also give you more information about debt-relief options, including the Savvy Method. Contact Ascend by calling or texting 833-272-3631 to speak with us. 

Post Author: Ben Tejes

Ben Tejes is a co-founder and CEO of Ascend Finance. Before Ascend, Ben held various executive roles at personal finance companies. Ben specializes in Chapter 13 Bankruptcy, Debt Settlement, Chapter 7 Bankruptcy and debt payoff methods. In his free time, Ben enjoys spending time going on adventures with his wife and three young daughters.

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