Kentucky Bankruptcy
Financial setbacks can happen to anyone. Filing bankruptcy in Kentucky is something most people do not want to think about or talk about. A lot of people see bankruptcy as complete failure and disaster, but it is just a legal tool that can help you protect some of your assets if you can no longer afford to pay your bills.
If you are considering bankruptcy in Kentucky, here is some basic information about the process.
Bankruptcy cases are always filed in United States Bankruptcy Court, which is an adjunct to the U.S. District Courts. However, bankruptcy cases, particularly with respect to the validity of exemptions and claims, are often dependent upon law. Because of this, it is usually not possible to generalize bankruptcy law across state lines.
For this reason, it is important for you to know the laws regarding bankruptcy of the state that you live in. If you live in Kentucky, you need to know the laws that pertain to you in filing a Kentucky bankruptcy. You will need the help of a Kentucky bankruptcy attorney who can assist you in understanding how Kentucky bankruptcy laws will affect your case.
The most common type of personal bankruptcy that is filed in Kentucky by an individual is Chapter 7. In chapter 7, you surrender your non-exempt property to a bankruptcy trustee who then liquidates the property and distributes the proceeds to your unsecured creditors. In exchange for this, you are entitled to a discharge of some of your debt.
The other personal bankruptcy that is filed in Kentucky is Chapter 13. In Chapter 13 bankruptcy, you retain possession and ownership of all of your assets, but you have to give some portion your future income to repaying your creditors. Usually, this is over a period of three to five years.
Chapter 7 is sometimes called “liquidation bankruptcy.” It is the type of bankruptcy that is desired by most people because, if you qualify to file Chapter 7, you can receive a full discharge (forgiveness) on all of your unsecured debts. These include things like medical bills and credit cards. Also, some of your secured debts like your home and auto may be exempt. In fact, many people have no non-exempt property. You may be able to keep everything you have.
If your income is above a certain level, or you have property you want to protect that does not fall within guidelines for allowed exemptions, Chapter 13 may be your best option. Unlike Chapter 7, Chapter 13 continues under Court supervision for as long as five years. Chapter 13 gives you a mechanism, called a Chapter 13 plan, which allows for an orderly payment of your debts during the plan period.
Chapter 7 appears to be more attractive, but you may not qualify to file it. If your income is below the median for a family your size in Kentucky, usually, you will be able to file Chapter 7. If your income is above the median for Kentucky, you may not be able to file Chapter 7. Your income has to pass the “Means Test” to qualify to file Chapter 7.
This test determines whether you have enough “disposable” income to pay back at least a portion of your unsecured debts. If the test says you do, you are not allowed to file Chapter 7 in Kentucky.
One of the advantages to filing Chapter 7 in Kentucky is that you are allowed to use federal supplemental exemptions in conjunction with Kentucky state exemptions. Kentucky also has a “Wildcard” exemption that allows you to protect $1000 worth of any property.
A Kentucky bankruptcy attorney will know if you are eligible to file Chapter 7 in Kentucky. A Kentucky bankruptcy lawyer can tell you the exemptions that you are entitled to, as well as the limits and amounts on these exemptions, if you are eligible to file Chapter 7. If you can choose between filing Chapter 7 or Chapter 13, your Kentucky bankruptcy attorney will help you decide which is best for you.
Choosing a Kentucky bankruptcy lawyer to help you file bankruptcy is important. Kentucky bankruptcy attorneys specialize in this highly specialized area of law. They keep up with the changes and updates that happen in Kentucky bankruptcy law.
This decision may affect you and your family for the rest of their life. You deserve the best advice possible from a Kentucky bankruptcy lawyer near you.
