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Louisville Kentucky Bankruptcy Law Blog

Do you understand the benefits of the automatic stay?

If you have made the decision to file for bankruptcy, you are probably struggling with past-due balances and bills you cannot pay on your own. You may be getting calls from debt collectors and creditors, receiving bills in the mail every day and dealing with the threat of possibly losing your personal property. Bankruptcy could give you a fresh start and allow you to achieve a better financial future. 

One of the benefits of filing for bankruptcy is that the automatic stay will go into effect. This means that all contact from debt collectors and creditors will come to a halt, and you will be free to follow the terms of the bankruptcy plan without additional pressure and stress. Before you file, you may want to learn more about what the automatic stay can mean for you and how choosing bankruptcy could be the right way forward.

Credit card spending can lead to need to file for bankruptcy

Many Kentucky consumers use credit cards for daily spending and everyday needs. In fact, some consumers use their credit cards as a type of emergency fund, especially if they do not have a lot in savings. Credit card balances can quickly spiral out of control, especially because of accumulating interest and minimum payments. Eventually, a person struggling with this type of debt may find that he or she needs to file for bankruptcy.

People are sometimes surprised to find how much credit card debt they have. It can accumulate quickly, often because of the tactics that some credit card companies use to get people to spend more money. One way they try to get consumers to spend more is by offering reward points or cash back. People may spend more because they want to get more, but often, the payoff is not worth the larger bills each month.

How do you know when your financial situation is out of control?

For the majority of American households, long gone are the days of scrimping and saving until you can afford to purchase something you need. And although people often extend their credit beyond their means, there are a variety of financing options available to help you get by.

In many cases, you can establish an affordable monthly repayment plan and borrow money to cover immediate expenses. Although whether you took out college loans, mortgaged your home or plan to spend the next five years paying off your vehicle, you likely have quite a bit of debt.

Chapter 7 bankruptcy is an option for those with credit card debt

Many people in Kentucky rely on credit cards. From daily purchases to emergency expenses, credit card balances can add up quickly. Over time, these balances can quickly overwhelm a consumer, leading to accumulating interest and debt that a person can no longer manage on his or her own. For some who find themselves in this position, a Chapter 7 bankruptcy is a beneficial option.

While the economy continues to be strong and consumer spending remains high, some experts point at the possibility that a recession could be coming in the near future. For those with credit card debt, it could mean there will be even more difficulty managing balances, especially if the recession leads to job loss, salary reduction and other problems. Only 35% of Americans say they have enough savings to carry them through three months if necessary.

HR obligations when businesses file for bankruptcy

One of the most difficult decisions any business owner here in Kentucky can face is whether to file for bankruptcy when financial obligations become overwhelming. The decision not only affects the owner but their employees as well.

Depending upon the situation, businesses under financial stress will likely choose between two types of bankruptcy. Chapter 11 reorganizes the debt, but companies can still operate, usually with reductions to staffing and other expenses. Chapter 7 liquidation affects everyone as the business will be sold for the benefit of creditors.

How can bankruptcy affect a credit report?

While no one wants to file for bankruptcy, it can be a useful tool for some people to deal with overwhelming financial obligations. Filing for bankruptcy will likely negatively affect a person’s credit, but the good news is that the damage can be repaired.

Bankruptcies are public records and listed on credit reports. A Chapter 7 filing can appear for 10 years. A Chapter 13 bankruptcy usually stays for seven years but can remain up to 10 years if certain conditions aren’t followed.

Many college students may face bankruptcy thanks to credit cards

When Kentucky students look forward to their college career, they may think about how expensive tuition will be or how much they may have to pay to live on campus. While most people consider the cost of books, they may overlook the expense associated with everyday life away from home, such as gas, groceries and other necessities. As a result, more students are relying on credit cards, and more are facing the possible need to file for bankruptcy in the future.

It's not easy to learn how to live away from home and learn how to manage personal finances all at once, yet this is what many college students have to do. Surveys suggest that as many as 35% of college students actually accumulate credit card debt in their first year, an amount that can add up over the next few years. Some feel so overwhelmed and confused that they hide their financial struggles from their parents.

Can bankruptcy help concerning student loans?

There is a mistaken impression among people owing student loans that bankruptcy will provide them no benefits. Indeed, you will likely never be able to discharge such loans in their entirety. However, as one particular news article mentions, it is still possible to use bankruptcy as a tool to make your student loans more manageable.

Under Chapter 13 bankruptcy, it is possible to treat these differently than other unsecured debt. And such a filing can in some instances provide relief from other debts, thus allowing you to keep up with your student loans.

Five misconceptions about bankruptcy

Managing an insurmountable amount of debt can be nerve-wracking. Yet, the prospect of filing for bankruptcy may leave you anxious about how bankruptcy could affect you both now and in the future.

The decision to file for Chapter 7 or Chapter 13 bankruptcy in Kentucky is certainly not one to take lightly. However, because of the misinformation surrounding bankruptcy, it can be helpful to sort out the facts from fiction.

What should I look for in a bankruptcy lawyer?

Contemplating bankruptcy is stressful enough, what with the financial pressure and your own expectations resting on your shoulders. While having to find and work with a bankruptcy attorney may sound like an additional chore, in reality, it should offer a bit of relief. Especially if you know what to look for.

With that in mind, here are some tips on what to consider when picking a bankruptcy attorney.

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