Who Can File Bankruptcy?

Bankruptcy Attorney in Oklahoma City, OK

Bankruptcy is a legal process by which a person or business that is unable to pay its debts can petition the courts for debt relief. The purpose of bankruptcy is to provide the debtor with a clean financial slate by eliminating their debts. Filing bankruptcy gives an individual an opportunity for a fresh start; thus, it is important to know if one is eligible or to put simply, who can file bankruptcy?

All bankruptcies in the United States are administered by the federal courts in accordance with the Bankruptcy Code.  While the federal court handles all bankruptcies, each state has its own judicial district or districts where state bankruptcies are handled. Usually, a trustee handles the bankruptcy process outside of courtrooms. Frequently, the only formal proceeding consists of a meeting between the filer and creditors at the offices of the trustee.

Why do I need a Bankruptcy Attorney in Oklahoma?

who can file bankruptcy in OklahomaA bankruptcy lawyer can help ensure that, if a client is having difficulty paying back a debt, any financial consequences that would ordinarily accompany bankruptcy can be fought. This includes not only delaying any potential financial consequences, but also determining if costs can be reduced based on the individual’s bankruptcy situation.

A lawyer can advise firstly if one is capable of filing bankruptcy or other matters including who can file bankruptcy. This advice would pertain not only to the individual’s current bankruptcy situation, but also to how they can better prepare financially for similar difficulties in the future. Additionally, you fight for your financial security in a variety of ways. The following are examples of some:

  • Elimination of credit card billing
  • Removing medical expenses and auto loans
  • Eradicating tax debt
  • Eliminating lawsuits

These are some additional methods for analyzing the causes of bankruptcy and protecting oneself from debt. For instance, if a person is facing a financial lawsuit, a bankruptcy attorney can assist in defending against the potential legal consequences of the debt. For more information on how to ensure that a bankruptcy attorney can assist you with your current financial difficulties, please visit a firm such as Scott Harris Law.

What is a Chapter 7 Bankruptcy?

Chapter 7 is known as “straight” or “liquidation” bankruptcy. In a Chapter 7 bankruptcy, a list of all of your assets and liabilities is submitted to the court. The court will appoint a “trustee” to represent your creditors and sell your assets to pay off your debts. However, in the majority of Chapter 7 cases, your property will be “exempt” and cannot be sold to satisfy creditors’ claims. Upon completion of your chapter 7 case (“final discharge”), the majority of your debts will be eliminated. If you filed Chapter 7 and your debts were discharged, you must wait eight years before filing Chapter 7 again.

Everyone who files for Chapter 7 bankruptcy must take a “means test.” The means test is a formula-based tool for determining eligibility for Chapter 7 (debt liquidation) or Chapter 13 (debt reorganization) (repayment plan). You are not required to be poor to file Chapter 7 bankruptcy. People with higher incomes who have high expenses, such as a high mortgage payment, may qualify.

Generally, a Chapter 7 bankruptcy will remain on a person’s credit report for up to ten years from the date the case was filed, whereas negative accounts will remain for only seven and a half years. If you’re contemplating bankruptcy, your credit may already be in poor condition.

A bankruptcy notation on your credit report alerts potential creditors that you did not fulfill your financial obligations. Rebuilding credit following a Chapter 7 bankruptcy can take time and effort.

What is a Chapter 13 Bankruptcy?

Unlike Chapter 7, where most debts are canceled, a Chapter 13 bankruptcy requires the debtor to repay some or all of the debt according to a repayment plan. The repayment process can last 3-5 years. To qualify, the debtor must have a regular source of income in order to make repayments. Income includes wages, as well as retirement, social security, and disability benefits. In a Chapter 13, a bankruptcy trustee is appointed to investigate your finances, make sure your plan is fair, address your creditor’s claims, and pay down your debts according to the plan. Your payments go to the trustee, who withholds 10% as a fee and sends the rest to your creditors. At the end of a Chapter 13 bankruptcy, the balance of unsecured debts (such as credit cards) will be discharged.


A Chapter 13 does not require a “means test”. The means test is an eligibility screening tool for people who want to file for Chapter 7. The test is not required for Chapter 13, but many people who do not pass the Chapter 7 means test, file for Chapter 13 instead.


A completed Chapter 13 bankruptcy will get removed faster from your credit report than a Chapter 7. A Chapter 7 appears on your credit report for about 10 years, while a Chapter 13 will appear on your credit report for 7 years from the date the case was filed. For example, if you complete a 5-year Chapter 13 plan, it would stay on your credit report for only two more years from the discharge date. A negative account stays on your credit report for seven and a half years.  

Who Declares Bankruptcy?

We do not foresee this situation changing in the foreseeable future for the vast majority of individuals and businesses filing for bankruptcy. On the other hand, bankruptcy can be a useful tool for financial planning when you have sufficient funds to repay your debts but need to restructure the terms. This occurs frequently when individuals must repay mortgage arrears or taxes through a structured repayment plan.

Surprisingly, individuals, not businesses, file for bankruptcy the most. They owe money for a mortgage, credit card debt, auto loan, or student loan, and they lack the income to pay it. This explains why the majority of bankruptcy filers were not wealthy.

Part of comprehending bankruptcy is realizing that, while it provides a fresh start, it has a significant impact on your credit and future ability to use money. It may prevent or delay home foreclosure and vehicle repossession, as well as wage garnishment and other legal actions creditors use to collect debts.

Nonetheless, there is a cost, and you will pay it for 7 to 10 years. Finding low-interest loans is a cost.

Call our Oklahoma Bankruptcy Lawyers Now!

Choosing to file for bankruptcy is not an easy choice, but with our Oklahoma bankruptcy attorney on your side, you can rest assured that a compassionate advocate is on your side. You and your family are entitled to a life free of financial anxiety and stress. You are not alone, which is good news! There may be debt relief just around the corner. Let us guide you there.


Request a free consultation by calling Scott Harris Law.

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