Are medical bills covered under bankruptcy law in Oklahoma?

The rules for filing bankruptcy encompass both state and federal laws. However, Oklahoma has opted out of federal bankruptcy exemptions, which means the petitioner can only use the State’s exemptions. The bankruptcy laws in Oklahoma are unique in that they allow a $10,000 exemption for farm equipment and also allow provisions for keeping certain amounts of livestock, such as sheep and cows. The homestead exemption is limited to $125,000 if the property was acquired three years prior to filing the bankruptcy petition.

Discharging Medical Bills Through Bankruptcy

In 2005, the federal government enacted new bankruptcy laws making it more difficult for individuals to qualify for a Chapter 7 liquidation proceeding. The petitioner must be able to pass the Chapter 7 “means test” before they can be eligible. Their income over the past six months must be below the average median income for their family size in the state where they file. If they are approved for Chapter 7, all of their unsecured debts can be discharged, including medical bills, credit card debt and personal bank loans.

If the individual or couple is unable to qualify for Chapter 7, they can file for Chapter 13. This requires them to submit a repayment plan to the court outlining how they intend to pay back their creditors over a 3 to 5-year period. Once the bankruptcy court approves the plan, a Trustee will be appointed to collect a monthly payment from the debtor. The Trustee will use these monies to pay each creditor a portion of what is currently owed on the debt. Once the repayment plan is concluded, any remaining unsecured debt will be discharged.

Hiring an Oklahoma Bankruptcy Attorney

The bankruptcy laws in Oklahoma are some of the most generous in the nation when it comes to protecting their home, cars, pension plan, tools of their trade and even provides a $3,000 exemption for wedding and anniversary rings. When you are facing bankruptcy due to mounting debts that are unsecured by collateral, it may be beneficial to discharge your debts and start with a clean slate. Consult with an experienced bankruptcy attorney to see which chapter you may be eligible for.