WHAT IS BANKRUPTCY?

Bankruptcy is a remedy provided by Federal Law, Title 11, United States Code , to provide relief to debtors who have debts that they are unable to pay, generally because current debt exceeds current income.

Upon filing of a Petition for Bankruptcy a restraining order is entered to stop creditors from pursuing the collection of the debt. The restraining order is called a stay. This stay order remains in effect until lifted by the Court.

There are four options available under the Bankruptcy Code.

Chapter 7 is the most common type of bankruptcy. Upon discharge all dischargeable debts under the Bankruptcy Code will be uncollectable, except those debts the debtor has specifically agreed to pay.

Chapter 11 is the type of bankruptcy typically for businesses where the debt is at least $1.5 million.

Chapter 12 is the type of bankruptcy typically for businesses where at least one-half of all income must come from farming.

Chapter 13 is like a debt consolidation loan where you make One monthly payment to the trustee who pays your bills for you.

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CHAPTER 7 - Liquidation

1. Chapter 7 is designed for Debtors in financial difficulty who do not have the ability to pay their existing debts.

2. Under Chapter 7 a trustee takes possession of all your property. You may claim certain property as exempt under governing law. In Oklahoma the exempt property is listed in Title 31, Sections 1, et seq.
   The trustee then liquidates the non-exempt property and uses the proceeds to pay your creditors according to priorities of the bankruptcy code.

3. The purpose of filing a Chapter 7 case is to obtain a discharge of your existing debts. If however, you are found to have committed certain kinds of improper conduct described in the bankruptcy code, your discharge may be denied by the court, and the purpose for which you filed the bankruptcy petition will be defeated.

4. Even if you receive a discharge, there are some debts that are not discharged under the law.
   Therefore, you may still be responsible for such debts as certain taxes and student loans, alimony and support payments, criminal restitution, and debts for death or personal injury caused by driving while intoxicated from alcohol or drugs.

5. Under certain circumstances you may keep property that you have purchased subject to a valid security interest. Your attorney can explain the options that area available to you.