This BAPCPA Man cartoon is posted by the Oklahoma Bankruptcy Lawyer Blog with the express permission of the creators of BAPCPA Man:

For more information on the differences between Chapter 7 bankruptcy and Chapter 13 bankruptcy, read these previous blogs posts that I’ve written:

• What is Chapter 7 bankruptcy in Oklahoma?
• What is Chapter 13 bankruptcy in Oklahoma?
• What is the difference between Chapter 7 and Chapter 13 bankruptcy?

If you’re considering filing bankruptcy but aren’t sure which type of bankruptcy would be best for your specific situation, contact me today to schedule a FREE initial telephone consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. Or just give me a call at 918-615-8260. I’ll answer all of your questions in plain English so that you can make a wise decision regarding which type of bankruptcy would be the most help to you.

Usually the answer is yes. But there are many factors that affect whether or not a person filing bankruptcy can keep their car or truck including how much your vehicle is worth, how much you owe on the vehicle and how far behind you are on the payments at the time you file for Chapter 7 bankruptcy.

Let me begin by talking to the people who have a loan and are making payments for their vehicle. You have three (3) choices:

First, you can surrender or give back the car.

You need to be honest with yourself and ask if it is in your financial best interest to keep your car or truck.

• Can you really afford the vehicle?
• Will your financial situation make it difficult for you to make the payments each month?
• Do you have equity in the vehicle or are you upside down owing more than the vehicle is worth?

If you can’t afford the payments, or you owe significantly more than your vehicle is worth, Chapter 7 bankruptcy will allow you to surrender or give back your vehicle and walk away without owing another penny. That can be a good deal for many people who are in a bind regarding their car or truck. Then you get something to drive that you can really afford. It may be just a “beater” but that’s OK if it will get you back and forth to where you need to go until you can save up for something better.

Second, you can redeem the car.

Redemption is the process of buying your car back from the bank/credit union/finance company for the fair market value of the car. Did you get that? Buying back for what the vehicle is really worth as opposed to what you owe for it. If you are substantially upside down, redemption can be a terrific deal.

However, redemption requires a lump sum payment and most people filing bankruptcy don’t have a large amount of cash just sitting around. But maybe a family member or friend could loan you the money. Or you can check with companies that specializes in financing vehicle redemptions such as  722 Redemption Funding. These companies charge high interest rates but it can still be a good deal since you would be significantly reducing the principal owed on the vehicle. If you are considering obtaining financing for a redemption, you should investigate the terms before filing for bankruptcy to make sure that you meet the qualifications for a redemption loan.

Third, you can reaffirm the car loan.

Reaffirmation is the renewal of a loan between a lender and a borrower. This means that if you sign a Reaffirmation Agreement, the bankruptcy will not discharge or wipe-out the vehicle loan. You would still owe that money to your vehicle lender and should you not be able to pay in the future, your lender would be able to pursue all legal methods of collecting that debt.

In order to reaffirm your car loan, you will need to be current on the car. And your budget must reflect that you have the ability to make the car payment without it being a financial hardship.

If you lease your vehicle:

If you are current on your lease payments, then you may assume the lease and continue with your contract if you choose. If the lease payments are too high, then you may wish to reject the lease and turn the car back into the dealership.

If you don’t owe money on your vehicle:

If you own your car or truck outright, meaning there is no loan on the vehicle, then in Oklahoma, you can keep the vehicle with no problem if it is worth $7,500.00 or less. Each bankruptcy debtor is allowed a $7,500.00 exemption for a motor vehicle so if a husband and wife file bankruptcy together, they can stack or combine their exemptions and protect a single vehicle worth up to $15,000.00. If the vehicle is worth more than the allowed exemption amount, then you would owe the difference. If you were unable to pay the Chapter 7 trustee the difference, then the trustee could take your vehicle, sell it at auction, and give you back $7,500.00/$15,000.00.

Each bankruptcy case is different, so the decision whether to keep or return a vehicle must be made on a case-by-case basis.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact Dan Nunley today by completing the “Contact Dan” form on the right side of this page. I’ll get back in touch with you as soon as I can to schedule a FREE initial telephone consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Following are the questions your trustee is required to ask you at your bankruptcy hearing. Below these required questions are a list of sample questions your trustee may ask you depending on the facts of your case. If you have any questions about answering any of these questions, you should discuss them with your attorney before you meet with the trustee.

QUESTIONS THE TRUSTEE IS REQUIRED TO ASK YOU AT YOUR BANKRUPTCY HEARING (341(a) MEETING OF CREDITORS)

1.     State your name and current address for the record.

2.    Please provide your picture ID and social security number card for review.

a.     If the documents are in agreement with the § 341(a) meeting notice, a suggested statement for the record is:

“I have viewed the original state of ________ drivers license (or other type of original photo ID) and original social security card (or other original document used for proof) and they match the name and social security number on the § 341 (a) meeting notice.”

b.    If the documents are not in agreement with the 341(a) meeting notice, a suggested statement for the record is:

“I have viewed the original social security card (or other original document used for proof) and the number does not match the number on the § 341(a) meeting notice.  I have instructed the debtor (or debtor’s counsel) to submit to the court an amended verified statement by [date], with notice of the correct number to all creditors, the United States Trustee, and the trustee, and to file with the court a redacted copy of the notice, showing only the last four digits of the social security number, and a certificate of service.”

c.    When the documents do not match the petition, the trustee shall attempt to ascertain why, and shall report the matter to the United States Trustee.

d.    If the debtor did not bring proof of identity and social security number, the trustee shall determine why.

3.    Did you sign the petition, schedules, statements, and related documents and is the signature your own?  Did you read the petition, schedules, statements, and related documents before you signed them?

4.    Are you personally familiar with the information contained in the petition, schedules, statements and related documents?  To the best of your knowledge, is the information contained in the petition, schedules, statements, and related documents true and correct? Are there any errors or omissions to bring to my attention at this time?

5.    Are all of your assets identified on the schedules?  Have you listed all of your creditors on the schedules?

6.    Have you previously filed bankruptcy?  (If so, the trustee must obtain the case number and the discharge information to determine the debtor(s) discharge eligibility.)

7.    What is the address of your current employer?

8.    Is the copy of the tax return you provided a true copy of the most recent tax return you filed?

9.    Do you have a domestic support obligation?  To whom?  Please provide to me the claimant’s address and telephone number, but do not state it on the record.

10.    Have you read the Bankruptcy Information Sheet provided by the United States Trustee?

SAMPLE GENERAL QUESTIONS (To be asked when deemed appropriate.)

1.    Do you own or have any interest whatsoever in any real estate?

If owned: When did you purchase the property? How much did the property cost?  What are the mortgages encumbering it?  What do you estimate the present value of the property to be?  Is that the whole value or your share?  How did you arrive at that value?

If renting:  Have you ever owned the property in which you live and/or is its owner in any way related to you?

2.    Have you made any transfers of any property or given any property away within the last one year period (or such longer period as applicable under state law)?

If yes:  What did you transfer?  To whom was it transferred?  What did you receive in exchange?  What did you do with the funds?

3.    Does anyone hold property belonging to you?

If yes:  Who holds the property and what is it? What is its value?

4.    Do you have a claim against anyone or any business?

If there are large medical debts, are the medical bills from injury?
Are you the plaintiff in any lawsuit?
What is the status of each case and who is representing you?

5.    Are you entitled to life insurance proceeds or an inheritance as a result of someone’s death?

If yes:  Please explain the details.

If you become a beneficiary of anyone’s estate within six months of the date your bankruptcy petition was filed, the trustee must be advised within ten days through your counsel of the nature and extent of the property you will receive.  FRBP 1007(h)

6.    Does anyone owe you money?

If yes:  Is the money collectible?  Why haven’t you collected it? Who owes the money and where are they?

7.    Have you made any large payments, over $600, to anyone in the past year?

8.        Were federal income tax returns filed on a timely basis?  When was the last return filed? Do you have copies of the federal income tax returns?  At the time of the filing of your petition, were you entitled to a tax refund from the federal or state government?

If yes:  Inquire as to amounts.

9.    Do you have a bank account, either checking or savings?

If yes:  In what banks and what were the balances as of the date you filed your petition?

10.    When you filed your petition, did you have:

a.    any cash on hand?
b.    any U.S. Savings Bonds?
c.    any other stocks or bonds?
d.    any Certificates of Deposit?
e.    a safe deposit box in your name or in anyone else’s name?

11.    Do you own an automobile?

If yes:  What is the year, make, and value?  Do you owe any money on it?  Is it insured?

12.    Are you the owner of any cash value life insurance policies?

If yes:  State the name of the company, face amount of the policy, cash surrender value, if any, and the beneficiaries.

13.    Do you have any winning lottery tickets?

14.    Do you anticipate that you might realize any property, cash or otherwise, as a result of a divorce or separation proceeding?

15.    Regarding any consumer debts secured by your property, have you filed the required Statement of Intention with respect to the exemption, retention, or surrender of that secured property?  Please provide a copy of the statement to the trustee.  Have you performed that intention?

16.    Have you been engaged in any business during the last six years?

If yes:  Where and when?  What happened to the assets of the business?

In cases where debtors are engaged in business, the following questions should be considered:

1.    Who was responsible for maintaining financial records?

2.    Which of the following records were maintained?

a.    Cash receipts journal
b.    Cash disbursements journal
c.    General journal
d.    Accounts receivable ledger
e.    Accounts payable ledger
f.    Payroll ledger
g.    Fixed asset ledger
h.    Inventory ledger
i.    General ledger
j.    Balance sheet, income statement, and cash flow statements

3.    Where are each of the foregoing records now located?

4.    Who was responsible for preparing financial statements?

5.    How often were financial statements prepared?

6.    For what periods are financial statements available?

7.    Where are such financial statements now located?

8.    Was the business on a calendar year or a fiscal year?

9.    Were federal income tax returns filed on a timely basis?  When was the last return filed?

10.    Do you have copies of the federal income tax returns?  Who does have the copies?

11.    What outside accountants were employed within the last three years?

12.    Do you have copies of the reports of such accountants?  Who does have copies?

13.    What bank accounts were maintained within the last three years?

14.    Where are the bank statements and canceled checks now located?

15.    What insurance policies were in effect within the last year?  What kind, and why?

16.    From whom can copies of such insurance policies be obtained?

17.    If the business is incorporated, where are the corporate minutes?

18.    Is the debtor owed any outstanding accounts receivable?  From whom?  Are they collectible?

19.    Is there any inventory, property, or equipment remaining?

Source: Executive Office of U.S. Trustee, Handbook for Standing Trustees, July 2002 (With Technical Amendments, effective 1/1/05; updated 341 meeting questions, effective 3/1/06; and Domestic Support Obligations, effective 10/1/08)

There are many differences between Chapter 7 and Chapter 13 bankruptcy. Chapter 7 is much less expensive than Chapter 13. Chapter 7 is much shorter in duration than Chapter 13. But most importantly, these two different types of bankruptcy were designed to deal with different types of debt problems.

Chapter 7 bankruptcy allows a person to wipe out debt and obtain a fresh start in just a few months. Chapter 7 bankruptcy will wipe out unsecured debts such as credit cards, medical bills and payday loans.

Chapter 7 will also allow you to surrender a home or vehicle or other financed purchase and walk away without owing another penny. The entire Chapter 7 process usually takes about 4 months from the time you file until the end of your case.

Chapter 13 bankruptcy is a repayment plan that lasts from 3 to 5 years. Chapter 13 is a form of debt consolidation where you pay back secured debts, usually in full, and pay cents on the dollar on your unsecured debts. Your bankruptcy lawyer creates a Chapter 13 plan which requires you to make a monthly payment to the Chapter 13 Trustee who then pays your different creditors.

A great benefit of Chapter 13 is that it will stop the foreclosure of your home or the repossession of your car and allow you to cure any delinquency and catch up your payments over the length of the Chapter 13 plan.

If you’re struggling with debt problems and would like to know more about the different types of bankruptcy and which would be best for your specific situation, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

This past Sunday, something happened that will allow more Oklahomans to be able to file Chapter 7 bankruptcy.

It used to be that almost anyone with serious debt problems could seek to eliminate their debts by filing Chapter 7 bankruptcy. That all changed in 2005 when the new bankruptcy laws were passed by Congress. The new bankruptcy laws were intended to make it more difficult to file Chapter 7 bankruptcy where debts are discharged (forgiven or wiped out) and to force more people into Chapter 13 bankruptcy where a substantial part of debts must be repaid.

The new bankruptcy laws contain a “Means Test” that determines whether a person gets to file a Chapter 7 bankruptcy or has to file a Chapter 13 bankruptcy.

Well this past Sunday, March 15, 2009, the government updated the criteria used in the Means Test calculations. These updated figures mean that more Oklahomans will qualify to file Chapter 7 bankruptcy.

The Means Test

The Means Test is a complex formula designed to decide whether a person has the financial means to pay back a substantial portion of his or her debts.

Basically, if a person’s income is below the Oklahoma state median income for a family of the same size, he automatically passes the Means Test and may file a Chapter 7 bankruptcy. However, if a person’s income is above the Oklahoma state median income for a family of the same size, then he initially fails the Means Test. That person may still be able to qualify for Chapter 7 bankruptcy if he has a sufficient amount of deductions that are allowed by the Internal Revenue Service (IRS). If not, then that person will have to file a Chapter 13 bankruptcy instead of Chapter 7.

New Criteria Means More Oklahomans Qualify for Chapter 7 Bankruptcy

The new criteria, which is based on U.S. Census figures and I.R.S. tables, increases the median income for Oklahoma residents. It also increases the various Means Test deductions which will make it easier for Oklahomans to be eligible for Chapter 7 bankruptcy relief.

This new criteria will have the effect of enabling more Oklahoma consumers to qualify for Chapter 7 bankruptcy.

If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

]]> http://www.oklahoma-bankruptcy-attorney.com/chapter-7/more-oklahomans-now-qualify-to-file-chapter-7-bankruptcy/feed/ 0 http://www.oklahoma-bankruptcy-attorney.com/chapter-7/what-is-a-reaffirmation-agreement-in-a-chapter-7-bankruptcy/ http://www.oklahoma-bankruptcy-attorney.com/chapter-7/what-is-a-reaffirmation-agreement-in-a-chapter-7-bankruptcy/#comments Fri, 27 Feb 2009 06:30:49 +0000 Dan Nunley http://www.oklahoma-bankruptcy-attorney.com/?p=196

Although you file a Chapter 7 bankruptcy to discharge or wipe-out your debts and get a fresh start, you have the option to sign a written agreement to “reaffirm” a debt.  If you choose to sign a Reaffirmation Agreement with one of your creditors, you will still owe that debt after your bankruptcy is finished.

And in the future should you get behind in payments on a reaffirmed debt, that creditor has the right to  come after you in order to collect the debt. Which means that the creditor could make collection calls, send collection letters, sue you, and maybe garnish your paycheck and repossess or foreclose on your property.

Rarely is it in a person’s best interest to reaffirm a debt.

If you are struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today by phone or email to schedule a FREE initial consultation. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

There are different types of bankruptcy for different types of debt problems. Chapter 7 is the type of bankruptcy filed by most people. It is sometimes known as “liquidation” or “straight bankruptcy.”

In Chapter 7 bankruptcy, a person’s debts can be “discharged” which simply means forgiven or wiped-out.

Chapter 7 works extremely well for “unsecured” debts such as credit cards and medical bills. It also works well for “secured debts” such as home loans and car loans if you are willing to surrender your house or car to the lender. If so, you can give the house or car back and not owe another penny.

Be aware that Chapter 7 is not able to wipe-out all types of debt. For example, domestic support obligations such as alimony and child support are non-dischargeable in Chapter 7.

The catch in a Chapter 7 bankruptcy is that in exchange for having debts forgiven or discharged you must give up certain types of property. However, the good news is that most people do not lose any property when they file Chapter 7 bankruptcy. This is because Oklahoma laws known as exemption statutes allow a person filing Chapter 7 bankruptcy to keep or “exempt” certain property. And the majority of people filing Chapter 7 bankruptcy simply do not own the type of property which would  be taken from them in bankruptcy.

To be on the safe side, a person thinking about filing bankruptcy should seek the advice of a knowledgeable bankruptcy lawyer. If it becomes clear that you have property that could be taken from you in a Chapter 7 bankruptcy, then you must decide whether it would be worth it to give up the property in exchange for having your debts forgiven. If not, your attorney can advise you about other available options including Chapter 13 bankruptcy.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.