I had someone come into my office not long ago who was panicking because he was about to get garnished for an old judgment a creditor had against him. He wanted to file bankruptcy to stop the garnishment, but he also didn’t want to lose his car, his house, or the personal property in his house. All he knew is he wanted his entire pay check, and he was contemplating giving all that stuff up to have it.
Well, I’ve got some good news for everyone. Bankruptcy isn’t as punishing as people sometimes think, because in every state there are certain assets you get to keep, regardless of who’s suing you or wanting to garnish you. These assets you get to keep are called “exempt assets”. Now, even though bankruptcy law is federal law, the one part of the bankruptcy code that relegates power to the states is in the area of exemptions. Each state is entitled to have their own exemption scheme. In some states you aren’t allowed to exempt very many things. In other states, you are allowed large exemptions. Luckily for my client up above, we live in Oklahoma, where the exemption laws are very liberal in favor of the person filing for bankruptcy. In fact, they’re some of the most debtor-friendly exemptions in the country.
My client was worried about things he didn’t need to be worried about because in Oklahoma everyone gets to exempt (or keep) their equity in their house. Obviously if you have a mortgage on the house you do have to keep paying for that, but otherwise you are entitled to keep the value of your house that you own free and clear. You also get to keep a car worth up to $7,500.00. Most of your household goods and furnishings are exempt as well (unless you have very lavish furniture in your home). This all made it very easy for my client to realize that bankruptcy was an easy solution. He was able to file it and not lose any of his property.
This has come up with other clients in the past, but it’s important for everyone to understand that in Oklahoma, when you file for bankruptcy, you get to keep just about everything. In fact, it’s rare when someone doesn’t get to keep something. If this is what’s holding you back from filing, quit worrying about it. The bankruptcy laws are there to allow you a fresh start at life, and you can’t get a fresh start unless you are allowed to still keep your vehicle and/or house.
For more information on bankruptcy, see https://wordpress.com/page/rpdearmanlaw.com/41