Oklahoma Bankruptcy HelpIf I File Bankruptcy in Tulsa, Can I Keep My Car?
For most people, a car is a necessity. It allows us to be mobile, to get to and from work, pick up the kids from school, and buy groceries. In that sense, your car can be a lifeline. When making the decision regarding whether to file for bankruptcy, many people are concerned that they may not be able to keep their car.
The good news is that bankruptcy law recognizes that cars are a necessity and makes certain allowances. This is known as a bankruptcy exemption. In many instances – but not all – if you file for bankruptcy in Tulsa, you can keep your car.
Here is what you need to know.
Bankruptcy Exemptions in Oklahoma
Bankruptcy laws contain certain exemptions. Normally, non-exempt property may be used by the bankruptcy court to satisfy a person’s creditors when they are filing for bankruptcy protection. Exempt property cannot be used for that purpose. Bankruptcy exemptions in Oklahoma include vehicles.
Under Oklahoma law, a vehicle is exempted in the amount of $7,500 for a single person and up to $15,000 for a married couple filing for bankruptcy protection. That exemption means that if you have already paid for the vehicle in question, the exemption amounts are protected and cannot be used to satisfy the creditors – in other words, you can keep your car.
My Car Is Worth More Than the Exempted Amount: Can I Keep My Car?
Only the exempted amount is protected. Therefore, if your vehicle is worth $20,000, the Trustee may force the sale of the vehicle to cover the non-exempted amount. The exempted amount can be returned to the debtors to purchase a car valued within the exemption amount.
If the debtor still owes money on the vehicle and it is worth over the exempted amount, the Trustee’s claim on the vehicle is reduced by the amount of the debt owed on the car.
I Bought My Car Used and Still Owe Money on It
Let’s say you bought your car two years ago for $8,000 and while its fair market value is currently $6,000, you still owe $2,000 on the vehicle. This happens more often than you would think. If you file for Chapter 7 liquidation, bankruptcy exemptions in Oklahoma allow you to reaffirm your debt on the car in order to keep your car. That means that you would keep on paying the car loan despite the bankruptcy. In essence, the reaffirmation of the debt takes the car’s value outside the bankruptcy.
Some Debtors Own More Than One Car
It is possible to claim an exemption for one vehicle and reaffirm the debt on the second vehicle in order to keep both cars. If you are contemplating doing this, seek the advice of an experienced Tulsa bankruptcy attorney before filing. You should understand the consequences of your actions if you decide to keep both cars.
Free Consultation with a Tulsa Bankruptcy Attorney
Financial Freedom Bankruptcy Lawyers of Tulsa offer free consultations to help debt-burdened Oklahomans discover the best approach to their financial crisis. Call us at (918) 786-9600 to start your free consultation today. You may also contact us using the contact form button on this page to ask a professional bankruptcy attorney in Tulsa your questions about bankruptcy exemptions in Oklahoma.
