Oklahoma Chapter 7 Bankruptcy Rules

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    Means Test

    • A debtor must qualify for Chapter 7 bankruptcy by passing a means test. The debtor’s family income will be compared to the median family income for the state of Oklahoma. If the debtor’s family income is less than the Oklahoma median, he passes the means test. According to the Census Bureau, Oklahoma’s median family incomes as of 2008 were: two-person families, $50,891; three-person families, $54,522; four-person families, $62,037; five-person families, $58,603; six-person families, $55,680; seven-or-more-person families, $50,884.

      The debtor does have a couple more opportunities to pass the means test if his family income is above the state median. If the debtor’s monthly disposable income, calculated by deducting his allowed monthly expenses from his monthly income, is less than $100, he passes the means test. If his monthly disposable income is more than $100, but the amount is not enough to pay at least 25 percent of his unsecured debt over five years, he also passes the means test.

    Trustee Appointment

    • After the debtor’s Chapter 7 petition has been filed, a trustee will be appointed to the case. The trustee will gather and sell the debtor’s non-exempt property and use the proceeds to pay the debtor’s creditors. The debtor will keep certain property that the state of Oklahoma deems necessary for the debtor to carry on life as usual. This property is called exempt property.

    Exempt Property

    • The state of Oklahoma allows the following exemptions: Real property or a mobile home of unlimited value, but the homestead cannot exceed 160 acres outside of town or one acre in town; burial plots; motor vehicle up to $7,500; clothing up to $4,000; furniture, books, portraits, pictures and health aids; food to last one year; two bridles and two saddles; 100 chickens, 20 sheep, 10 hogs, five cows and calves younger than 6 months, two horses and forage for livestock to last a year; personal injury, workers’ compensation and wrongful death recoveries up to $50,000; college savings plan interest; guns up to $2,000; anniversary and wedding rings up to $3,000; personal computer and related equipment; prepaid funeral benefits; 75 percent of wages earned within 90 days prior to filing; pensions for IRAs up to $1,095,000 per person; public benefits; tools of the trade; alimony and child support; insurance for life insurance, funerals, group life; beneficiary interest in support trust; liquor license; and business partnership property.

      After exempt and non-exempt property has been sorted and creditors paid, the debtor will receive a discharge of his unsecured debts. A debtor should consult Oklahoma laws for a complete list of exemptions. Oklahoma median incomes may change in the future.

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