Understanding the Bankruptcy Homestead Exemption in Oklahoma

Many Oklahoma homeowners worry about what will happen to their family home if they declare bankruptcy. They are relieved to learn that with few exceptions, the Oklahoma exemption system can protect the entire value of their home, allowing them to remain while they fulfill the conditions of their bankruptcy.

The Oklahoma homestead exemption applies to both real property and manufactured homes such as trailers, provided that:

  • The place is your principal residence  
  • It is located in a town or city
  • The property size does not exceed one acre
  • The property is used primarily for residential purposes

Unlike some states, the homestead exemption automatically applies in an Oklahoma bankruptcy. You are not required to file a homestead declaration in order to claim the exemption.

Residential vs. Business

In order to benefit from the unlimited homestead exemption, at least 75% of the home’s square footage must be dedicated to residential purposes. You are allowed to use the property for business purposes too, but if more than 25% is dedicated to your business, your exemption limit is $5,000.

Not in a Town or City?

If you do not live in a town or city, the Oklahoma homestead exemption may be used to protect up to 160 acres of property in a rural location. The same protection applies if the area where you live amalgamated with a nearby town or city after November 1st, 1997 and you use the home for both residential and agricultural purposes, such as a farming enterprise.

Home and barn on the farm fields and rolling hills of Southern York County, Pennsylvania.

Exceptions for Oklahoma Homestead Exemption Protections

The state homestead exemption does not protect your home from all claims. The exceptions to the rule include:

  • Tax liability
  • Mechanics’ liens
  • Wage claims

The Oklahoma homestead exemption also does not protect those who do not live in the state, debtors who are in the process of relocating to another state, or those who have left with their families.

Understanding what you are allowed to retain in an Oklahoma bankruptcy will give you a better idea of what to expect when you file for Chapter 7 or 13. Attorney B. David Sisson is here to answer your questions about state exemptions and all other aspects of the bankruptcy process, so please contact our firm today for a no-obligation consultation. Bankruptcy has given many Oklahoma residents the breathing room needed to rebound financially, and we will protect your rights from the moment you file until you receive your discharge.

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