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Question about Chapter 7 assets


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I have calculated the 'means' test and we qualify for a chapter 7 bankruptcy. Heres the deal though. My husband has two vehicles and a boat. He drives his car (not a new one, an older paid for model) to work each day because of the cost of work. He has a truck (older than dirt) that he uses when he goes to the lake or whatever and needs to pull his boat (again older than dirt). My concern is that these two items mean more to my husband than any sale would amount to and creditor would benefit from. Is there a chance that he would loose either or these?

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Oklahoma does not let you use the federal exemptions. Therefore, you are stuck with whatever Oklahoma lets you exempt. They are listed below.

You may keep a vehicle and your husband may keep a vehicle if each vehicle has less than $3000 in equity. No exemption for boats unless it is a tool of the trade (ie a commercial fisherman, etc.). The fact that the second vehicle and the boat are worth more to your husband than the creditor is inconsequential and for good reason. If you are stiffing a creditor, then all non-exempt assets should be liquidated to pay claims.

I'd say it is more likely than not that you'd lose those two assets. You have to list them all on your schedules and then sign under perjury that your schedules are accurate. You must disclose.

Per person:

  • a homestead not exceeding one acre, if in a city, town or village, or not to exceed 160 acres of land if not within a city, town or village. The homestead must be the debtor's principal residence.

  • a mobile home if it is the debtor's principal residence

  • interest in a claim for personal bodily injury, death or workers' compensation claim for a net amount not more than $50,000

  • all household and kitchen furniture held primarily for personal, family or household use

  • the debtor's interest, not to exceed $3,000 in value, in one motor vehicle

  • tools of the trade or related materials up to $5,000

  • personal wearing apparel up to $4,000

  • some types of retirement or pension plans provided that they were created with pre-tax dollars.

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I'd say it is more likely than not that you'd lose those two assets.

Get them appraised. A good place to do this is at a pawn shop. Just get two or three in writing. If they are worth little, the trustee may find it not worth taking. If the cost to dispose plus the trustee's fees would leave next to nothing for the creditors, then the trustee won't bother.

The appraisals will help you fend off any creditor as well by showing they aren't going to result in much, if anything, going to the creditors.

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