According to the United States Bankruptcy Court, Western District of Kentucky, bankruptcy is a legal way in which individuals can exempt themselves of debts that they are unable to pay. In Kentucky (and also nationally), any person, corporation, or partnership can file for bankruptcy.
In 2005, a piece of legislation called the Bankruptcy Abuse Prevention and Consumer Protection Act passed. The new legislation required individuals to meet certain requirements when filing for bankruptcy. The main requirement for individuals was that they receive credit counseling. Those filing for bankruptcy must receive counseling sessions regarding debt management at an approved credit counseling agency.
What Chapter Should You File?
Individuals who need to have secure or unsecured debt relieved usually file a chapter 7 or chapter 13 bankruptcy. Those with a business may consider fling chapter 11. Corporations and sole proprietorships can file chapter 11 when their business can no longer pay its creditors.
Married Couples and Bankruptcy in Kentucky
Married couples who have debts they can no longer repay should consider filing a joint petition. A joint petition makes the bankruptcy process easier for married couples. Unmarried persons must file a separate, individual case.
Bankruptcy and Your Financial Life
Filing for bankruptcy can be damaging to a person’s financial life. A bankruptcy severely hurts a person’s credit score. Those who file should expect their scores to drop by at least 200 points. Furthermore, individuals who file for bankruptcy must hand over valuable assets, such as their homes or cars when they file. If the person files for bankruptcy with his business, the business will be shut down immediately after filing.
Debt Consolidation for Kentucky Residents
According to Kentucky Bankruptcy Laws, in some cases bankruptcy is not the right choice for an individual facing mounting debts. Kentuckians facing debt problems should also consider debt consolidation. Debt consolidation allows a person the ability to pay one loan at a lower interest rate. Additionally, debt consolidation poses less financial consequences than bankruptcy.
Kentucky Bankruptcy Lawyers
Individuals who are unsure of the bankruptcy process should consider hiring a bankruptcy attorney. Those who file for bankruptcy without an attorney are referred to as a "Pro Se." Pro Se debtors are responsible for everything pertaining to their bankruptcy cases, and the process can be quite frustrating. An attorney can increase an individual’s likelihood of filing for bankruptcy successfully.
Sources:
United States Bankruptcy Court, Western District of Kentucky, http://www.kywb.uscourts.gov/fpweb/bankruptcy_faqs_07.htm#1.
Kentucky Bankruptcy Laws: Bankruptcy or Debt Consolidation, http://www.kentuckybankruptcylaws.org/.
U.S. Trustee Program, http://www.justice.gov/ust/eo/bapcpa/ccde/cc_faqs.htm.
K Williams - Kay is a poet and freelance writer. She considers herself a bohemian and has lived in numerous locations including South American and ...
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