Overwhelming amounts of debts can rob you of your peace because you could be living in constant fear of losing your property through repossession or foreclosure. And constant reminders on your phone or mailbox can intensify the anxiety of a possible debt collection.
Regardless of the stigma attached to bankruptcy, it was an alternative explored by Abraham Lincoln and Thomas Jefferson. Experienced Oklahoma City bankruptcy attorneys can help you take advantage of constitutional protection that has been available for ages.
How Does Bankruptcy Protect Debtors?
Whether you decide on Chapter 7 or Chapter 13, filing for bankruptcy protects you from the adverse effects of overwhelming amounts of debt. Knowing exactly what you are safe from could enlighten you on what to expect from the process.
For instance, it stops:
- Legal proceedings on debt and other financial matters
- All debt collection activities
- Appeals, enforcement, or commencement of judicial or administrative judgments or actions
- Proceedings and collection actions on any property in the bankruptcy estate
- Creditors from collecting their debt from your wages or bank account
Notably, this protection might remain until the end of the bankruptcy proceeding. If you think this is the kind of protection you desire in the midst of your financial problems, consult a seasoned bankruptcy lawyer in Oklahoma to find out where to start.
Which Laws Govern Bankruptcy Protection?
Most creditors seek court orders to collect from you using Oklahoma State laws. On the other hand, bankruptcy is governed by Federal laws. The guidelines are found in Title 11 of the US Code and are administered by the US Department of Justice in the Federal Courts. A protection order in bankruptcy overrides a collection judgment obtained by a creditor because the Federal Court is superior to the State Court.
According to the Supremacy Clause in Article Six, Clause Two of the Constitution, federal laws become the highest form of law if a conflict arises between state and federal laws. Therefore, bankruptcy protection from the federal court is supreme over any collection orders in Oklahoma. This makes any judgment to collect from you legally unenforceable.
What Happens if Someone Attempts to Collect From You?
Bankruptcy protection takes effect as soon as your detailed application is taken to the court clerk and processed. If you qualify, the court usually mails all lawyers, creditors, and all other parties interested in seeking payment. The email is meant to notify these parties of the automatic stay that forbids them from foreclosing, repossessing, or filing lawsuits.
Creditors cannot contact you through invoices, texts, social media, email, phone, or even give you a “friendly reminder.” Failure to adhere to the court-ordered automatic stay comes with grave consequences. The penalties could include:
- Attorney fees
- Court costs
- Punitive damages awards
- Fines and sanctions for contempt of a superior court order
What Kind of Bankruptcy Protection is Available for Businesses?
Businesses can also file for bankruptcy in Oklahoma and get an automatic stay order. However, in Chapter 7, all the company and its properties might be sold to pay the creditors. So, filing under this category is like giving up control of the company to a trustee that could extract maximum economic value from it to sort out pending debts.
In Chapter 11, your business continuity is guaranteed because neither the business nor its properties are sold. Operations usually continue as the business seeks to reorganize the debts and reshape the business. A skilled bankruptcy lawyer in Oklahoma City can ensure that your business takes the right approach to protection.
Can I Seek Bankruptcy Protection on My Own?
Financially troubled individuals are allowed to represent themselves in a bankruptcy court in Oklahoma. They could also hire a skilled Oklahoma bankruptcy attorney to help navigate the complexities of the process that follows a bankruptcy declaration. The attorney could help in the following ways:
- Representing you in court proceedings
- Explain schedules, files, and other paperwork
- Obtain necessary documentation and paperwork
- Utilize their knowledge of the various state and federal laws
Also, note that debt reorganization and discharge can take a long time to finalize. But having a lawyer by your side keeps you updated on the important timelines in your case. They will also ensure that the process is effective and error-free.
Are There Downsides to Seeking Bankruptcy Protection?
Bankruptcy could give you a fresh financial start while you get a chance to retain all or some of your properties in Oklahoma. However, before you embrace this great alternative, it is critical to understand the negative implications that come with it.
- Inability to file again in the next 4-8 years, depending on the type of bankruptcy you file
- A requirement to undertake a credit counseling course approved by the court
- Higher interest rates when accessing credit in future
- The bankruptcy showing in your credit report for 7-10 years
So, before settling on bankruptcy as an alternative to debt relief, you want to be sure that you are prepared for the limitations it’s likely to come with. If you are certain that you can live with it, you could go ahead and file for bankruptcy in either of the following categories:
- Chapter 13 – for income earners seeking to stop foreclosures and other debt recovery efforts
- Chapter 12 – for family fishermen and family farmers seeking reorganization and debt relief
- Chapter 11 – for complex business bankruptcies seeking debt restructures and reorganizations
- Chapter 7 – for straightforward forgiveness of debt with a few exemptions
Legal Professional Advising You During Financial Difficulty
Debt relief alternatives differ from person to person and business to business because of differences in debt load. Close scrutiny and careful planning are critical in taking the right approach to debt protection.
You deserve a bankruptcy attorney in OKC that can comprehensively, objectively, and clearly review your financial situation and advise accordingly. Our lawyers can reduce, reorganize, and eliminate debts depending on the circumstances. Speak to us today to ask questions on bankruptcy protection for you in Oklahoma.