Oklahoma law is very specific regarding the type and amount of jewelry that a person filing bankruptcy can protect and keep.
Oklahoma law allows a person filing bankruptcy to protect or “exempt” up to $3,000 worth of wedding and anniversary rings. See 31 O.S. sec. 1(A)(8). If a married couple file bankruptcy together, then each spouse may claim the $3,000 exemption and protect up to $6,000.00 worth of wedding and anniversary rings.
Notice that the Oklahoma exemption statute says you can only protect wedding and anniversary rings. It makes no provision for other types of jewelry such as earrings, necklaces, bracelets, watches or rings other than wedding and anniversary rings.
However, in the 16 years that I have been a bankruptcy lawyer, I have never had a client have to surrender any jewelry to a bankruptcy trustee. That’s because any jewelry that my clients have owned and properly disclosed has been of minimal value below the value that would make it worth a trustee’s time to liquidate and administer on the behalf of unsecured creditors.
If a client thought that the value of his or her wedding or anniversary rings was more than the allowed $3,000.00, then I would advise the client to obtain an appraisal of the ring. Most often, the resale value of wedding and anniversary rings is far less than the sentimental value we attach to such items.
A written appraisal will help establish that the true fair market value of the jewelry is below the allowed $3,000.00. Or if the ring is worth more than the allowed $3,000.00 but not substantially more, a written appraisal can convince a bankruptcy trustee that the jewelery is not worth enough in excess of the allowed $3,000.00 to make the effort to liquidate worthwhile.
That’s because if the bankruptcy trustee decided to take the ring and sell it for the benefit of your creditors, the trustee would have to pay you the first $3,000.00 from the sale proceeds. And unless the ring is extremely valuable, the amount remaining after deducting your $3,000.00 and the trustee’s expenses of liquidation would likely leave very little to be split among your unsecured creditors which would make the whole liquidation process not worth the effort.
So while Oklahoma law only allows you to protect your wedding and anniversary rings, if the rest of your jewelry consists of costume jewelry and other pieces with a low resale value, the probability that you will lose your earrings, necklaces and bracelets is extremely low. A bankruptcy trustee just isn’t going to be interested.
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