Bankruptcy is usually the last resort when people find themselves in huge debt. It will protect you from being harassed by creditors and give you the fresh start you need. Basically, there are two types of bankruptcy you can file: chapter 7 or chapter 13. Your bankruptcy law expert can help choose the best option for you based on the nature of your debt and your financial situation. This is a guide to Chapter 7 bankruptcy in Louisville; it will provide important information for anyone considering this option.
Chapter 7 or Chapter 13 bankruptcy
These two major types of bankruptcy differ in so many ways. While Chapter 13 involves the creation of a plan to repay the portion of your debt, Chapter 7 involves quick elimination of your debt. In Chapter 13, you are going to keep your properties while you follow the agreed repayment plan.
However, in Chapter 7, you may have to forfeit some properties. It all depends on the nature of your debt, your assets, and your income. Consulting an experienced bankruptcy lawyer in Louisville will help you make a better decision about the type of bankruptcy to file.
Chapter 7 bankruptcy in Louisville
The chapter 7 bankruptcy process is straightforward and a lot simpler. It can take between 4 to 6 months to be concluded and may involve only one trip to court. On the downside, your non-exempt properties are subject to sale, and it may affect your ability to obtain credit in the future. To file this bankruptcy in Louisville, you also need to pass the Kentucky Means Test.
The Means Test
The summary of the means test is that if your current monthly household income is less than the Kentucky median income for a household of your size, you are presumed to pass the test and is eligible for Chapter 7. If this is not the case, you must complete the means test by calculating your income and expense information.
Depending on the outcome of the calculation you may be ineligible for Chapter 7 and will be required to dedicate part of your disposable income to repayment through Chapter 13. It should be noted here that if your debt are not primarily consumer debt, then you are exempt from the test. You are also exempt if you are a disabled veteran and incurred most of your debt during active duty.
Bankruptcy exemptions in Kentucky
Exemptions are specific bankruptcy laws that allow you to protect some of your property from creditors. There are federal exemptions available in Kentucky as well as the state exemptions. You can choose between the two but cannot mix and match.
Chapter 7 bankruptcy in Louisville may be your best option to come out of debt. It is important, however, that you work with an experienced bankruptcy lawyer to make the entire process smooth. In case you will like to know more about chapter 7 bankruptcy in Louisville, contact us today at O'Bryan Law Offices. Attorney Julie O'Bryan will be available to speak with you and provide suitable answers all your questions and concerns about bankruptcy law.
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