Bankruptcy Laws in Louisville, Kentucky

Unfortunately, financial problems can strike anyone.  Sometimes the problems sneak up on you and hit you like a ton of bricks.  Other times, you can see the problem, but you keep struggling to do your best until finally something happens to break the camel’s back.  Generally, there are two types of bankruptcies you should learn about, Chapter 7 and Chapter 13.  Chapter 7 eliminates debt and Chapter 13 restructures or repays debt. 

• Benefits
• Qualifications
• Your financial future

The benefits of bankruptcy are pretty well-known.  Creditor harassment must stop.  This includes foreclosure, repossession, wage garnishment, phone calls, lawsuits, etc…  This is true whether you choose a chapter 7 or chapter 13.  Both options stop collection proceedings.  However, they work differently.  Chapter 7 eliminates unsecured debt like credit cards and hospital bills.  Most people who file don’t lose any property either.  In Chapter 13, you restructure your debt into a court approved, court supervised, and court enforced payment plan that you can afford.  Payments are determined by what you can afford as well as what property you are trying to keep.  Chapter 13 is especially effective to combat a foreclosure on your house!

Both options have different qualifications.  To qualify for chapter 13 bankruptcy, you must have regular income that is sufficient to pay your living expenses and provide at least a minimal repayment to your creditors.  Anyone can qualify for chapter 7 bankruptcy, but you will want to discuss your situation with a Louisville, Kentucky bankruptcy attorney to help you make the right decision and to advise you about any pitfalls.

Credit is simply the ability to borrow money.  Your credit score is calculated by looking at a number of factors including your debt to income ratio, your payment history, your outstanding credit available, and your income.  Once you find yourself contemplating bankruptcy, your credit score is already on its way to disaster.  You have got to eliminate your debt!  That is the first step to putting yourself on a path to improvement in the future.  Once you are out of debt, you can then take steps to rebuild.  This is why filing a Louisville, Kentucky bankruptcy is so important to your financial future, because it allows you to get rid of the debt problems that caused the credit woes and move forward.