Chapter 7 Bankruptcy

Facing garnished paychecks? Creditor calls or letters that worry you? Wondering about the future of your job? You don’t have to face the overwhelm alone.  Our legal team will help you determine the best decision for your financial well-being.

The good news is, a Chapter 7 Bankruptcy will improve your situation immediately. As soon as you file, wage garnishment stops. Harassing creditors can be referred to your attorney. You’ll have a clear view of what your future looks like.

If you’re asking yourself, “Should I declare bankruptcy?”, we can help. Based on your individual situation, we can help determine the best option for you. Our team is committed to answering your questions and giving you all the information you need to make a decision that’s right for you.

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The Difference Between a Chapter 7 and Chapter 13 Bankruptcy

To find out whether a Chapter 7 or Chapter 13 Bankruptcy is best for you, our team will help you evaluate your unique situation. In a Chapter 7 Bankruptcy you are generally discharging all of your debts and may keep your home and vehicles if you are current on house and car payments. It generally only takes 90 days to complete.

A Chapter 13 has several special laws that allow you to reorganize some of your debts. For example, you can spread out payments that are behind on your home or car over three to five years. You can cram down the amount you owe on your car if you are upside down and only pay back what it is worth, if the loan is over two and a half years old. A Chapter 13 will last from three years to five years depending on your needs and circumstances. We often are able to lower the total monthly payment for house and automobiles from what you are currently paying, even after attorney fees and costs. For more specific questions about Chapter 13, please visit our Chapter 13 Bankruptcy page.

Chapter 7 Bankruptcy Cost: The AffordLaw Way

The fee to file a Chapter 7 Bankruptcy in Oklahoma with Affordable Legal Services is a flat $1,500.

Our mission is to support Oklahomans through challenging financial times and help them start over. The court’s filing fee for a Chapter 7 Bankruptcy is $338 (subject to change by the court system) and is included in our flat fee.

We Offer a Payment Plan

Our team understands how overwhelming it can be to experience debt and financial turmoil. We are one of the few Oklahoma Bankruptcy firms to offer a payment plan. We can work out a specific plan for you.

The general payment plan starts at $200.00. Retain our services as a law firm, we get started on your case and prepare necessary reports. You can then refer creditor calls to our firm.

You can pay at whatever pace works for you and once the total amount you have paid
us reaches $1,000.00 paid we can file your case. The remainder of your fee is handled with a separate contract after we file. We normally ask that the remaining $500 be paid within 30 days.

Here is a chart explaining this Chapter 7 Bankruptcy payment plan:

If you need a unique payment plan, we can work with your individual situation. We often offer a special plan for those with wages that are being garnished.

Our law office is one of the only firms in OKC to offer payment plans.

Whether you live in Oklahoma County, Logan County, Cleveland County, Caddo County, Canadian County, Grady County, Pottawatomie County, McClain County, Kingfisher County or any other county in Oklahoma, we can help you take control again.

We routinely help people in Oklahoma City, Edmond, Bethany, Warr Acres, The Village, Midwest City, Del City, Harrah, Moore, Norman, Shawnee, Del City, Kingfisher, Enid, Piedmont find the fresh start they need with a Chapter 7 Bankruptcy.

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Frequently Asked Questions for Chapter 7 Bankruptcy

Who can declare bankruptcy? Do I qualify for bankruptcy?

You have to be a United States citizen with a social security number to file bankruptcy. We do not file bankruptcies for businesses, but we can help you explore if filing a personal bankruptcy for liabilities outside the business can be beneficial.

How much debt do you have to have in order to file a Chapter 7 Bankruptcy?

There is no exact minimum of debt to file a Chapter 7 Bankruptcy. However, the fee to file bankruptcy with Affordable Legal Services is $1,500. So, you would likely be facing a debt over $1,500 before you’d want to file a Chapter 7. If you have questions about whether bankruptcy is right for you, we are here to help. Call now to get your questions answered.

What is the debt limit for a Chapter 7 bankruptcy?

Having too much debt to qualify for a Chapter 7 is highly unlikely. The law for this limit changes regularly, but we have never had a problem with clients reaching that limit.

Do you have to include all debt in a Chapter 7 Bankruptcy?

Yes, you do have to include all debt in your bankruptcy. However, you can reaffirm and keep any debts you’d like to keep. While you have to identify all debts and assets, you can retain certain debts like a mortgage or car loan. We are here to advise you and help you obtain the best results possible with your bankruptcy.

What happens to debt in a Chapter 7?

In a Chapter 7 Bankruptcy, almost all that debt is dischargeable and you will no longer owe that money. Examples of dischargeable debt that can be eliminated include credit card, medical, tax debt due for more than 3 years, and judgment debt. 

Non-dischargeable debt that CANNOT be eliminated with bankruptcy includes tax debt due for less than three years, student loans, criminal fines, alimony and child support debt. 

If there’s any debt that’s secured by a house or a car, that security survives the Chapter 7. If you want to keep an asset like a house or a car, you would have to continue paying the debt.

Can Chapter 7 stop wage garnishment?

If you received a writ of garnishment and are facing cut paychecks because of your debt, filing bankruptcy will put an immediate stop to any and all garnishments.

Stopping garnishment is the number one reason we see Oklahomans filing bankruptcy.

Can creditors collect debt after a Chapter 7 is filed?

No, once the Chapter 7 is filed, an automatic stay goes into place and no creditors can collect.

Does your spouse have to file bankruptcy with you? What happens to a non-filing spouse?

There’s no requirement that both husband and wife have to file bankruptcy. If only one spouse files bankruptcy, it will only erase the debt of the filing spouse. If the non-filing spouse has no debts or can pay their debt, there’s no need for them to file. A non-filing spouse’s credit will not be affected if their partner files bankruptcy.

Taxes and Bankruptcy

Can you file bankruptcy against the IRS?

If your taxes have been due for more than 3 years and you have not paid, you can file bankruptcy against the IRS and that debt will be eliminated. Unpaid taxes that have been due for less than 3 years cannot be cleared through any type of bankruptcy. This includes state and federal taxes.

What does bankruptcy do for tax refund garnishment?

If you file a bankruptcy, it will stop garnishment that could be collected against your tax refund. One exception to this rule is if you owe child support, in Oklahoma they can intercept your tax refund for that debt and bankruptcy would not stop that. 

However in most cases, if you get a tax refund and it goes into your bank account, a creditor cannot garnish that tax refund after you file bankruptcy. 

What happens to my taxes after filing bankruptcy?

You still have to file your tax returns in a timely manner, even if you file bankruptcy. Any tax refund you might be entitled to for the year during which you file bankruptcy can be taken by the bankruptcy court and used to pay your debts. If your tax return is small enough, they won’t take it. There’s no general rule but if your return is over $2,000 they’ll often take a portion of it.

However, earned income credit in a tax return cannot be taken by the bankruptcy court. This can often be a substantial amount and will be yours to use as you please.

Your tax return can only be taken by the bankruptcy court during the year you file bankruptcy. This isn’t something that will continue forever.

Credit Cards and Bankruptcy

Can you keep a credit card after filing a Chapter 7 Bankruptcy?

There is no law that prohibits you from keeping a credit card after filing bankruptcy. Credit card issuers however may cancel the card when you file bankruptcy. Some will allow you to re-establish a credit card or keep it if you choose to reaffirm the debt. Most credit card companies will cancel your card. Around 3-6 months after you file bankruptcy, you’ll start getting credit card offers again.

Can you file bankruptcy on credit cards only and keep your house?

Yes, you can file a Chapter 7 bankruptcy on credit cards only and keep your house. If you’re experiencing challenges paying for your mortgage, you may also want to consider filing a Chapter 13 Bankruptcy. Our legal team will help you find the best solution for your unique situation at your initial free appointment.

When should you stop using and paying credit cards when filing bankruptcy?

When you make the decision to file bankruptcy, you should stop using your credit cards and you can stop paying them. The same can be said for all creditors. If you know you’re going to file bankruptcy, there’s no need to pay down debt when it will be wiped away. 

However, it is important to note that borrowing a large sum of money or putting thousands on your credit card up to 90 days before you file bankruptcy will be an issue in bankruptcy court. Minor charges such as gas or food will not be an issue. 

Can I get an unsecured credit card after filing bankruptcy?

Yes, most people receive credit card offers within 3-6 months after their discharge.

Homes, Cars and Bankruptcy

Can I get a mortgage after a Chapter 7 Bankruptcy?

For conventional financing of a mortgage from a lender, you’ll most likely have to wait 1-2 years after you file bankruptcy. This is because of banking regulations.

Do I still own my home after a Chapter 7 Bankruptcy?

Yes. In Oklahoma, there are very liberal exemption laws that allow you to keep your home after the filing of bankruptcy.

What happens to my second mortgage in a bankruptcy?

A second mortgage can only be discharged in a Chapter 13 bankruptcy when the first mortgage exceeds the value of the house. Our team is happy to help answer any specific question about this in your free consultation.

A Chapter 13 offers many opportunities to help with a second mortgage. If the value of the property on a second mortgage is less than the first mortgage, the entire second mortgage can be eliminated.

Can I get a car loan after Bankruptcy?

Yes, you can get a car loan the day after your discharge from bankruptcy if you wish.

What happens to secured debt in a Chapter 7 Bankruptcy?

On a secured debt, the lien does not go away. If you want to keep an item, you have to keep paying the debt. If you want to let go of the item, you can surrender it and no longer owe anything on it. You make the decision whether to keep secured debt like a home or car loan. 

If you no longer pay for a secured debt, even after a Chapter 7 Bankruptcy, a home can be foreclosed on or a car can be repossessed. 

A key point to make here is that if you file Chapter 7 and want to let go of a secured debt, you can go through home foreclosure or car repossession without paying the deficiency. That means if you owe $20,000 and the lender sells it for $5,000, you don’t have to pay the remaining $15,000. You’ve already given up that debt and the home or car with it. This is only possible if you don’t reaffirm the debt. 

We often recommend that our clients don’t reaffirm a debt. Reaffirming a debt means that you make a new contract with a lender to keep property and the debt that goes along with it. If you don’t reaffirm a debt, you still have the chance to walk away from it. 

For example, if a car is reaffirmed in a bankruptcy, but a few years later the transmission goes out and repairing it isn’t worth it, you still have to pay the entire debt. However, if you did not reaffirm the debt, you can still let it go and get a new car. We are always here to answer your questions about reaffirming debt and secured debt.

Student Loans and Bankruptcy

What happens to student loans in a Chapter 7 Bankruptcy?

Student loans are not discharged in a Chapter 7 Bankruptcy. However, a Chapter 7 Bankruptcy will stop collection efforts and give those filing bankruptcy an opportunity to get their student loan into a position where they could do an income-based repayment plan. This is the best way of addressing student loans because the payments are so low. 

The advantage of a bankruptcy with student loans is that it provides time to work out a repayment plan since this debt cannot simply be removed. For additional questions about student loans and creating a plan that works for you, schedule your free consultation with Affordable Legal Services. 

Also, you can get a student loan after filing bankruptcy if needed. 

Will I lose my student loan money if I file bankruptcy?

If you have student loan money in your bank account, that is exempt from bankruptcy and will not be taken away. 

After Filing Bankruptcy

When will my Chapter 7 Bankruptcy be discharged?

Most Chapter 7 cases are discharged 90 days after they’re filed.

What happens after you file bankruptcy?

After you file bankruptcy, your credit score will actually be higher than before. That’s because all your debt will be eliminated. You can immediately begin to continue that increase by paying bills wisely.

Can I get a personal loan after my bankruptcy is discharged?

Yes, anyone can get a personal loan. We recommend that those who file for bankruptcy avoid payday loans. After bankruptcy, you have to wait a number of years before you’re allowed to file again and these kinds of loans can lead to terrible situations.

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