Bankruptcy offers an excellent opportunity for residents of Oklahoma to reset and start over. However, the process isn’t always as straightforward as it sounds. Complications often crop up when liens and judgments characterize your debt situation.
Your ability to eliminate them in bankruptcy depends on their nature and the type of bankruptcy you choose to file. But if you explain your exact situation to experienced Oklahoma City bankruptcy attorneys, they will be better able to discuss relevant possibilities. Eventually, your debt situation will get the best possible outcome.
What Types of Debts Aren’t Dischargeable in Bankruptcy?
While bankruptcy is a great way to sort out one’s debt problems, some could remain constant. Non-dischargeable debts cannot be eliminated and stay with you during and past the bankruptcy proceedings. They include:
- Drunk driving-related debt
- Restitution or criminal fines
- Some types of taxes
- Student loans, unless you prove undue hardship
- Alimony or child support
So, as you consider exploring bankruptcy in Oklahoma, it is critical to understand that it might not solve all of your debt problems. And if your goal was to get rid of the above liabilities, you might have to consider other legal options instead.
What Debts Can I Eliminate in an Oklahoma Bankruptcy?
Bankruptcy offers relief to all dischargeable debts in Oklahoma. As soon as you present the documentation to the court clerk, an automatic stay momentarily stops all debt collection efforts by the creditors.
Until the case is concluded, you might not hear anything regarding:
- Wage garnishment
- Collection notice
This applies only to specific debts, including:
- Personal debts from friends, family, and others
- Medical bills
- Overdue utility bills
- Credit card debt
If you intend to eliminate the above types of debts, then bankruptcy might be ideal. But if you are uncertain about whether your debts will be addressed in such proceedings, it is safe to consult with a liens and judgments attorney in Oklahoma City.
Are There Exceptions to Dischargeable Debts in Oklahoma?
Some debts are conditionally dischargeable. If the creditor disputes its discharge and the court approves, it ceases to be dischargeable. These are debts related to:
- Services, goods, or money obtained through fraud
- Malicious or willful injury
Note that the outcomes vary widely, but a liens and judgments attorney in Oklahoma City can enlighten you on the possibilities. Your questions and doubts will be demystified, and you will know what to expect.
Does Bankruptcy Remove All Judgment Liens Against My Property?
A creditor might have obtained a lien against your property either through a default judgment or a case you lost. While it is a powerful tool for creditors, bankruptcy can counter it depending on the circumstances.
You can only remove liens for dischargeable debts. However, you have to be sure that the creditor did not ask the court to make the dischargeable debt non-dischargeable. A skilled Oklahoma bankruptcy attorney can help you find out the status of the debt that has a lien against your property and advise on the way forward.
Is the Lien Discharge Automatic?
Lien attached to a non-dischargeable debt is almost impossible to remove in bankruptcy. However, liens from dischargeable debt aren’t automatic either. Simply filing bankruptcy and sitting and waiting for the lien to be removed might not work. There is a legal procedure attached to it.
You have to file a lien avoidance action in a bankruptcy court. After that, you will have to prove that the lien affects your right to exempt property upon bankruptcy. The adversary proceedings can result in you getting whole or part of the lien removed. Notably, the judge at the bankruptcy court will only remove what is equal to your exemptions.
Can Bankruptcy Discharge Deficiency Judgments?
A lender that failed to recover enough money from the sale of your car or house might have obtained a judgment to recover the deficiency. Bankruptcy can wipe this liability depending on the type of bankruptcy you file.
In Chapter 7 Bankruptcy
If the judgment isn’t attached to any of your properties, it might be treated as any other unsecured debt. In Chapter 7, such obligations are wiped out. But if it has a lien on your property, it might only be discharged based on your exempt needs.
In Chapter 13 Bankruptcy
If the deficiency judgment has no lien on your property, the lender might receive the pro-rata of the money apportioned to unsecured creditors. And when you finish your repayment plan, it will be discharged.
How Do I Know if a Judgment is Valid in Oklahoma?
If you foresee an inability to meet your financial obligations in Oklahoma, it is advisable to act fast and explore your relief options. The bankruptcy process might be more straightforward if you file before a creditor seeks to have a lien on your property. This might save you the additional procedures of convincing the bankruptcy judge to remove the judgment lien.
But even if you didn’t act fast, you might have other advantages. A creditor might have obtained a judgment against you but failed to act on it. If five years lapse without the judgment’s execution, it might become invalid and unenforceable. However, the lender might renew the judgment before the expiry of this period and extend the validity for another half a decade. Ensure that you consult with a liens and judgments attorney in Oklahoma City to know the status of your judgments.
Attorneys Helping You Seek Financial Relief and Get Your Life Back
Liens and judgments can complicate the bankruptcy process in Oklahoma. Without a legal expert by your side, you might see it as an uphill battle and make many mistakes. Your financial hardship is difficult enough, and you don’t want to add legal frustrations to your list of problems.
Our attorneys can steer the legal battle for you and handle the creditors determined to get something from you. We can help you reset your finances with the best bankruptcy alternative and handle all other necessary motions. Speak to us today for all manner of legal advice and assistance concerning your finances.