Oklahomans Can Still File for Bankruptcy

Many Oklahomans who are drowning in debt have been led to believe that filing for bankruptcy is no longer an option for them. This is simply untrue.

Bankruptcy is still available for good people who are struggling with too much debt.

However, there have been major changes to bankruptcy laws in the recent past. In 2005, the bankruptcy laws were radically changed with the passage of the Bankruptcy Abuse Prevention & Consumer Protection Act (BAPCPA).

BAPCPA was designed to make it more difficult for people to be able to file Chapter 7 bankruptcy where debts can be simply wiped out. Instead, the new law forces more people out of Chapter 7 and into Chapter 13 bankruptcy which is a long-term debt repayment plan. And the law has had its intended effect as Chapter 7 cases are down and Chapter 13 cases are up.

In the months prior to the new law taking effect, the number of bankruptcy filings skyrocketed here in Oklahoma and across the nation. America’s bankruptcy courts were buried in filings by hundreds of thousands of people hurrying to beat the clock before the new law took effect.

Consumer bankruptcy filings soared 30 percent to 2 million nationally in 2005. Then they fell off the map.

In 2006, consumer bankruptcy cases plummeted 70 percent from 2005 according to the Administrative Office of the U.S. Courts.

But since then, bankruptcy filings in Oklahoma and across the nation have been steadily climbing year by year. The current recession is sure to cause the number of bankruptcy filings to continue to spike upward as jobs losses mount, credit card delinquencies increase, and the number of home foreclosures climbs to an all-time record high.

The 2005 changes also made bankruptcy more complicated and more expensive.

BAPCPA has made bankruptcy laws that were already complex even more complicated. The additional requirements of the new law mean bankruptcy lawyers must spend considerably more time preparing each case. There is more paperwork, shorter deadlines and increased liability for the lawyer if things are not done right.

Because of the increased workload on the bankruptcy lawyer, attorney’s fees have increased dramatically from what they were before the laws changed in 2005.  Court filing fees have also increased substantially. And besides attorney’s fees and court costs which have always existed, now there are new fees that didn’t exist before 2005 to cover new requirements of a person filing bankruptcy such as the pre-filing mandatory credit counseling class and the post-filing mandatory financial management course.

So in summary, while much has changed in the world of consumer bankruptcy, bankruptcy is still available to help good people who find themselves in dire financial straights.

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.