What Are the Oklahoma Bankruptcy Exemptions?

Why Are Exemptions Important in Chapter 7 Bankruptcy in Oklahoma? 

Bankruptcy exemptions are laws that help you protect your property when you file Chapter 7 bankruptcy. If you don’t use exemptions properly or you have property that’s non-exempt, the bankruptcy trustee could sell your things to pay your creditors. 

Luckily, this rarely happens in Chapter 7 cases. Most people who file bankruptcy get to keep all of their assets and property.

Can Oklahoma Filers Use the Federal Bankruptcy Exemptions?

No. Oklahoma residents filing bankruptcy must use the state’s exemptions. Oklahoma doesn’t allow its residents to use the federal bankruptcy exemptions. 

In addition to the state exemptions, you can also use the federal non-bankruptcy exemptions to help protect your retirement savings and other money benefits.

Note that if you’ve lived in Oklahoma for less than two years, you may be required to use a different set of exemptions when you file your case. To learn more read: Can I File For Bankruptcy After Moving To A New State?

What Are Oklahoma’s Bankruptcy Exemptions?

Oklahoma exemptions cover three major categories:

• Real property like a home or land

• Personal property like household goods, furniture, jewelry, and cars

• Money benefits or intangible property like retirement accounts, pensions, government assistance, and more

The exemptions listed in this article are for single filers. If you are married and you and your spouse are filing bankruptcy jointly, you can double the value of each exemption as long as you co-own the property you’re trying to exempt.

Real Property: The Oklahoma Homestead Exemption

Oklahoma has one of the most generous homestead exemptions in the U.S.

It’s one of only a few states that provide an unlimited exemption in home equity, subject only to certain acreage restrictions:

• If you live in an urban area or a town, you can exempt 1 acre of land and the buildings that sit on that land. 

• If you live in a rural area, you can exempt up to 160 acres and the buildings that sit on that land.

Note that to use this exemption, the home must be your primary residence.

Though this applies in a minority of cases, it’s important to know that if you use more than 25% of your home’s square footage for business purposes, the homestead exemption will be limited to $5,000.

Source: Oklahoma Statutes §§ 31-1(A), 2(C)

Oklahoma’s Personal Property Exemptions

Unless otherwise noted, Oklahoma law allows filers to exempt the full value of the following kinds of personal property. Unlike many other states, Oklahoma doesn’t place a limit on the value of most kinds of personal property eligible for exemption. This makes Oklahoma’s personal property exemption structure one of the most generous in the nation.

Here’s what’s exempt under Oklahoma law:

• Books

• Bridles and saddles (two of each)

• Burial plots

• Clothing (up to $4,000)

• Crop seed to last one year

• Food to last one year

• Funeral benefits that have been prepaid and placed in a trust

• Furniture

• Guns for household use (up to $2,000)

• Household items

• Individual development account deposits

• Interest in college savings plans

• Livestock for family use (up to two horses, five cows, 10 hogs, 20 sheep, and 100 chickens as well as their feed to last one year)

• Personal computers

• Personal injury and wrongful death recoveries (up to $50,000 with additional exemplary or punitive damages exempt without limitation)

• Pictures and portraits

• Prescription health aids

• War bond payroll saving account

• Wedding bands and anniversary rings (up to $3,000)

Source: Oklahoma Statutes §31-1(A)(1)-(23)

Oklahoma’s Motor Vehicle Exemption

You can exempt equity in a motor vehicle up to $7,500 as a single filer or $15,000 if you’re married and filing jointly. If you use a motor vehicle as part of your profession, you may be able to claim an additional $10,000 in equity in that vehicle under Oklahoma’s tools of trade exemption. 

The tools of the trade exemption generally covers $10,000 total value of implements necessary for working farmland that also serves as your homestead. Tools of the trade exemptions generally cover any equipment required to carry out your business or profession.  

Source: Oklahoma Statutes §31-1(A)(5), 31-1(C)

Money Benefits

In addition to offering protections for retirement plans and most retirement accounts, Oklahoma law exempts 75% of those wages earned in the 90 days before a filer submits their bankruptcy petition to the court. 

The court has the discretion to exempt more than that threshold if the filer can demonstrate hardship. Given that most Chapter 7 bankruptcy filers are low-income, hardship is generally not difficult to demonstrate in this context.

In addition to the wage-specific exemption, the following money benefits are exempt thanks to federal non-bankruptcy exemptions:

• ERISA-qualified benefits

• IRAs, Roth IRAs, Education IRAs and Keoghs (up to the current maximum as outlined in law; these figures are adjusted every 3 years)

• Tax-exempt retirement accounts, including 401(k)s, 403(b)s, defined-benefit plans, money purchase plans, profit-sharing plans, SEP and SIMPLE IRAs

Source: Oklahoma Statutes §§ 31-1(A)(20), 31-1(A)(24), 15-41-30(A)(13), and 11 U.S.C. § 522(b)(3)(C)(n)

Pensions

Oklahoma law gives special exemption-related consideration of pensions and other qualifying assets owned by members of certain professions.

• County employees 

• Disabled veterans 

• Firefighters 

• Judges

• Law enforcement employees

• Police officers

• Public employees

• Teachers

For more information, see Oklahoma Statutes §§ 19-959, 31-7, 11-49-126, 20-1111, 47-2-303.3, 11-50-124, 74-923, 70-17-109

Public Benefits Exemptions

A number of public benefits, insurance benefits, and miscellaneous assets are also exempt under Oklahoma state law, including:

• Crime victim compensation 

• Earned income tax credit

• Public assistance

• Social Security

• Unemployment compensation

• Workers' compensation

Source: Oklahoma Statutes §§ 21-142.13, 31-1(A)(23), 56-173, 40-2-303, 85-48

Need Help Filing Chapter 7 Bankruptcy in Oklahoma?

It’s entirely possible to file a successful Chapter 7 bankruptcy case on your own. But many people understandably want some help through the process. If you qualify, you can use Upsolve’s free filing tool, which will walk you through the process step by step. We’ve helped thousands of people discharge over $700 million in debt. Our services are 100% free and we have great reviews from our members!

If you’re worried about losing certain property that you own, you can schedule a free consultation with a bankruptcy attorney. While attorneys aren’t required for simple cases, they are well worth hiring for more complex cases to ensure your assets are protected.