How to file for bankruptcy without a lawyer [And Reasons Why You Shouldn’t]
Fact checked by Clayton Hasbrook | Updated on December 21, 2020
Are you a resident of Oklahoma and wondering how to manage your debts?
You might have tried making repayments, but the interest has become unmanageable, and you’re looking for a solution. Have you ever wondered, “How do you file for bankruptcy?”
The process might seem daunting, but if you can’t keep on top of your financial situation, it might be your best option. You’re not alone – with the financial impacts of COVID-19 being felt all over the country, it’s believed that next year might set a record for bankruptcy filings.
If you want to straighten out your finances and see if discharging your debts is an option, it’s time to consider filing for bankruptcy. We’re going to answer the main questions that you’re likely to have, so you’ll have a basic grasp of how it works. Read on!
Do You Have Alternative Options?
Before we get into the details of bankruptcy law in Oklahoma, the first thing you should consider before filing for bankruptcy is whether you have other paths.
The federal laws surrounding bankruptcy protection are intended to help individuals and businesses who possess more debt than they can afford to repay. These laws permit the opportunity for those eligible to start over by liquidizing assets or establishing a payment plan so that creditors can be regularly repaid.
There are alternative ways to resolve the financial difficulties of a debtor, and sometimes they are better options too.
One of your alternatives is to negotiate the terms of your debt with creditors. This may result in an extended deadline to repay what’s owed, a reduced total amount, or a mix of both. Although you might have to negotiate any property that was previously used to guarantee the loan, it will save future legal costs.
Another option to look into is consolidating the debts into one loan. This is particularly attractive if the loan can be extended over a longer time frame. When negotiating, you should seek to achieve a lower interest rate than the combined amount for the smaller combined debts.
How Do You File for Bankruptcy?
Now we’ll give some specifics on how to file for bankruptcy. Some documents that you’ll need to file are required and some will be useful for filling out the bankruptcy forms. You’ll need your most recent income tax return, pay stubs, and credit reports from all three agencies.
A credit counseling course is required and must be completed within six months (180 days) before the bankruptcy filing. The course only lasts an hour or two, and there are often online and phone options in addition to in-person.
The completion of the bankruptcy forms is the most significant part of the process, which is why most filers will use an Oklahoma city bankruptcy attorney. Your attorney will ask for all the necessary documents and ask the questions needed for additional information.
There is a filing fee, which differs depending on which chapter you file. These fees may also be subject to future change. There’s also an income threshold where the fee can be waived.
It’s advisable to print the bankruptcy forms directly before filing since some of your details may have changed since you last obtained them.
After you file, an injunction is automatically enacted, known as an automatic stay. This prevents creditors from carrying out certain debt collection activities. For chapters 12 and 13, a co-debtor “stay” can protect third parties from consumer debt collection activities also.
Creditors can still pursue debts incurred after the filing as they normally would.
Should You File a Chapter 7?
Chapter 7 is a liquidation (of assets) or straight bankruptcy. Currently, the fee is $245, with a $75 miscellaneous administrative fee and a $15 trustee surcharge. This money is paid to the court clerk upon filing.
An appointed trustee decides which assets aren’t exempt from creditors and sells them, with the money from the sale going to the creditors.
Often, a discharge of debt is sought, meaning that the courts decide that you don’t need to pay it all back. You’d still owe your past three years of taxes regardless, and you will not be able to discharge debt again for 8 years.
An Oklahoma bankruptcy filing has certain commonalities between both chapter 7 and 13. This includes the filing of the petition (mentioned above), a statement of financial affairs, and schedules of assets and liabilities. Here’s what you need:
- List of creditors with amount and details of the claim
- Debtors income source, amount, and frequency
- List of debtor’s property
- List of debtor’s monthly living expenses
Relevant debts are discharged about 90 days after filing unless the debtor is disqualified for failing to either disclose assets or follow court orders.
Should You File a Chapter 13?
Chapter 13 is a reorganization (of debt) bankruptcy. Currently, the fee is $235 with a $75 miscellaneous administration fee, payable to the court clerk upon filing.
One of the major advantages of chapter 13 is the possibility of saving your home from foreclosure. There is also a provision concerning consumer debt that can protect third party co-signers – possibly a spouse.
The debt is formally restructured into a consolidated loan by the court, with a chapter 13 trustee dealing with the creditors.
For chapter 13 bankruptcy in Oklahoma, an individual (and spouse) must have regular income and owe less than the financial threshold to qualify. If your debt exceeds this threshold, you may be able to file a Chapter 11 bankruptcy, which costs more and is a further complicated process.
The current threshold set by the U.S. Courts is $394,725 of unsecured debts and $1,184,200 of secured debts.
Hire a Bankruptcy Lawyer Today
You asked, “how do you file for bankruptcy?” We’ve shown you the main options, but you’ll need personal legal advice to address your specific circumstances. Don’t let your debts keep mounting up – reach out for professional financial assistance.
If you’re considering filing for bankruptcy in Oklahoma, we can help you. We are a law firm that specializes in bankruptcy and we choose to represent people instead of corporations and insurance companies.
Contact us today for a free consultation.