According to the 2005 Bankruptcy Act, all courts must adhere to federal guidelines and standards for bankruptcy codes. Oklahoma has 3 districts with 4 court locations throughout the state. The most commonly filed types of bankruptcies are Chapter 7, Chapter 11, Chapter 12 and Chapter 13.
Chapter 7 bankruptcy is known as "elimination bankruptcy." This is because as much unsecured debt is eliminated as possible. Sometimes this comes as a hit to the debtor because his or her assets may be liquidated to cover outstanding financial responsibilities. It is a good option for those with a high debt to low income ratio. Non-dischargeable debts, such as taxes, student loans and child support will remain the responsibility of the petitioner even after bankruptcy is complete.
For petitioners who need bankruptcy relief but would like to protect their assets, a Chapter 13 bankruptcy may be a good choice. With Chapter 13, the debts are minimized and restructured so the debtor can repay them, typically in a 3 to 5 year timeframe. As long as payments are being made, the petitioner's assets can stay in their possession in many cases. Chapter 13 is often an option for those with a steady stream of income, but many outstanding debts.
Chapter 11 and Chapter 12 are both bankruptcy codes specific to businesses. Chapter 11 is for businesses that require debt relief, but would like to stay operational and maintain their assets. Much like Chapter 13, Chapter 11 reorganizes the debt and allows a 3 to 5 year window for repayment. Chapter 12 is much the same, but is written for family farmers and fishermen who require financial assistance.
All petitioners of bankruptcy are required to complete credit counseling within 6 months of filing. Often, the credit counseling will help individuals understand how to get out of debt on their own. For others, bankruptcy is a better option. In that case, there are several steps to completion.
Lastly, all petitioners are required to complete a financial management course. For Chapter 7, this finalizes the bankruptcy. Chapter 13 petitioners must continue making payments conforming to their debt repayment schedule to avoid ending up back in court.
Oklahoma is arranged into three districts for bankruptcy. The Oklahoma Eastern Bankruptcy Court is located in Okmulgee. Tulsa is the location for the Northern District. Lastly, Lawton and Oklahoma City comprise the Western Bankruptcy Court.