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Western Kentucky Bankruptcy Blog

Determining which bankruptcy chapter suits a person's needs

For people in Kentucky who are experiencing financial problems that they do not believe they can escape, the stress can be overwhelming as they seek solutions and try to find a way to move forward. Bankruptcy is a legal strategy to overcome financial challenges and start again either with a clean slate (Chapter 7) or with a payment plan (Chapter 13). Mentioning these two basic options is important as many prospective filers are not aware of the difference and how the situation determines which is preferable.

Chapter 7 is a liquidation. People who do not have significant property and assets can get a clean slate by filing for Chapter 7. If there are assets that are of value, a trustee will take them, convert them to cash and distribute them to creditors to pay some of the debts. Since Chapter 7 generally does not have nonexempt property, it might not be wise for a person who owns a home or a car with value to file for it. After the case is completed, the debts are discharged and the person will no longer face the calls, letters and relentless debt collection attempts. It will drastically harm the person's credit, but most are willing to make that tradeoff and rebuild their credit as time passes.

Is Chapter 13 bankruptcy right for my situation?

Kentuckians can find themselves facing financial challenges in myriad ways. For some, there are unexpected medical expenses that grow out of control. Others spend beyond their means and have trouble keeping up with the payments or cannot keep up with them at all. Still, others lose their jobs and find themselves using credit to make payments until they reach their limits and have nowhere else to turn. Any financial situation in which there are problems keeping up with creditors can be problematic. For many, bankruptcy is a sound strategy to deal with the situation. Understanding the chapter that is preferable for the individual case can be difficult. Having legal advice is critical in these circumstances.

For people who own a home, a vehicle and other items of value and want to retain them, Chapter 13 bankruptcy is the wise alternative. Unlike a Chapter 7 liquidation, Chapter 13 formulates a payment plan that the debtor must complete in three to five years. The amount of time it will take for the plan to be completed is contingent on the debtor's income. Most cases are for five years. Chapter 13 is beneficial because property will not be taken and sold off to pay creditors as it would with Chapter 7. The payments are sent to a Chapter 13 trustee who will pay the creditors.

What makes one eligible for Chapter 7 bankruptcy?

No one seeks out financial problems; however, when they arise, one is likely to seek out solutions to these problems. Debt relief can look very different from person to person, but in some cases, it means exploring bankruptcy. Although the mere thought of filing for bankruptcy seems taboo, it is in fact not only a commonly used debt relief option, it is also the reason a person is able to have a fresh financial start.

Before initiating the bankruptcy process, one needs to determine if he or she is eligible. Eligibility is based on certain factors, and for those seeking to file for Chapter 7 bankruptcy, he or she must first establish he or she is eligible. What makes one eligible for Chapter 7 bankruptcy?

Plan to exit bankruptcy approved for iHeartMedia

Financial problems happen. When individuals and businesses are faced with financial issues, it is usually faced with a plan to overcome them. However, debt could become overwhelming, making it difficult for a new budget to fully address them. While the bankruptcy process is frequently thought of as a process to avoid, it can be a very beneficial step to take to obtain a fresh financial start.

When businesses are faced with financial problems, Chapter 11 bankruptcy is often utilized. During this process, a business is able to develop a plan to help them pay off their debts. Based on recent reports iHeartMedia presented a new plan to the bankruptcy court and an attempt to exit the bankruptcy process.

What are the pros and cons of filing Chapter 13 bankruptcy?

Dealing with financial problems is not something one wants to face; however, when they occur, they are something that need to be addressed. Much negative connotations are attached with the bankruptcy process. Many individuals are concerned about it impacting their future credit and even affect his or her reputation or self-image. Thus, it is important to understand how filing for bankruptcy could be beneficial, even if there are setbacks to also consider.

What are the pros and cons of filing Chapter 13 bankruptcy? Let's begin with the pros of this process. Chapter 13 helps a debtor develop a payment plan, helping them pay off debts in a more manageable and reasonable way. While it takes longer to address debts than Chapter 7 does, there is more flexibility in this process. In some cases, one can stretch out their debt payments and even reduce the amount they pay. A major benefit is that a debtor gets to keep the property they are making payments on, such as a home or a vehicle.

Helping you determine if a Chapter 7 filing is right for you

There are many reasons why individuals in Kentucky and elsewhere take on debts. This could be for an education, to buy a car, purchasing a home or even accumulating credit card debt. In many cases, these debts are manageable and rather normal. However, when individuals and families take on more than they can handle or suffer financial challenges, these debts can become extremely overwhelming. It can become so significant that debt relief options become the only way one will be able to obtain a fresh financial start.

Filing for bankruptcy is a serious and emotional decision to make. It is also one that individuals shouldn't make without knowledge and information of the process. At Marcus H. Herbert & Associates, our attorneys understand that the process can be overwhelming. However, we stand by our clients' sides, letting them know that they are not in this alone.

What are some benefits of filing for Chapter 7 bankruptcy?

Many Western Kentucky residents may be finding themselves in a lot of debt this time of year. This debt can come from unavoidable situations, like medical expenses but can cause a family a crazy amount of stress. Bankruptcy can be an option for people if they need help dealing with some of their debt.

There are many benefits of filing for Chapter 7 bankruptcy. One of the main advantages of filing for Chapter 7 bankruptcy is the ability to have a fresh start. Many debts can be eliminated that include credit card bills, medical bills, past due utility bills, personal loans from family and friends, etc. These are many of the common debts that people carry with them and can add up to thousands of dollars. In addition, the debtor gets to keep his future income. There is also not a limit to the amount of debt a person can have for a Chapter 7 bankruptcy and there is not a repayment plan. Finally, the discharge of the debt happens fairly quickly, usually within 60 to 90 days.

Can filing bankruptcy help with your student loan debt?

Most college graduates understand the benefits a degree can provide, with increased employment opportunities and higher earnings potential. If you financed your own college education, you likely also understand the strain your student loans can place on you as you try to make your way in the world after graduation.

If you are drowning in student loan debt, it's important to know that it is very challenging, but not impossible, to dismiss student loans in bankruptcy. The criteria are very strict, but a lawyer can review your financial circumstances to determine whether you are eligible.

If you are not able to dismiss your student loans in bankruptcy, you may still be able to get relief from other debts such as medical bills or credit card debt you accumulated during and after college. In some cases, discharging these other debts allows people to make their student loan payments. 

Debt a big issue for Gen X-ers

Carrying debt is pretty common in the United States. It appears it is especially common though among one particular generation: Gen X. Currently, the rough age range for Gen X is 36 to 51.

A recent Lightstream report looked at survey data covering different generations. Of the Gen X-ers surveyed, 80 percent reported having debt. This was the highest percentage of any of the generations the report looked at.

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