Chapter 7 Bankruptcy
Chapter 7 Bankruptcy is one of two options for individuals who have outstanding debts that can’t be paid. So who can file for chapter 7 bankruptcy in KY, and is it right for you? Here are the pros and cons.
Advantages of Chapter 7
Chapter 7 is a way to eliminate debt with generally no repayment to creditors. It allows an individual to completely get rid of most debt by receiving a discharge from the bankruptcy court at the completion of usually a 90-day process.
Some examples of debts that are typically discharged in a Chapter 7 bankruptcy include: credit cards, medical bills, personal loans, old utility bills, payday loans, prior repossession or foreclosure deficiencies, and other types of miscellaneous collections. At the end of your Chapter 7 case, the court may offer a discharge on all or some of your debt, which means you are no longer required to pay the debts that existed prior to filing your bankruptcy.
Although Chapter 7 bankruptcy in KY is referred to as a liquidation, most people that file for Chapter 7 are able to keep most, if not all, of their assets either because of the bankruptcy code exemptions available to protect their basic possessions, or because most people that file for bankruptcy do not have significant equity in their homes or cars. For most clients, we are able to protect all or most of a debtor’s property throughout the bankruptcy process and provide them with a fresh start, free of debt with all or most of their assets retained.
Disadvantages of Chapter 7
While Chapter 7 bankruptcy sounds perfect in all cases, there are disadvantages to file, so be sure to consider these before taking action.
The primary disadvantage of filing for chapter 7 bankruptcy is that it stays on your credit report for ten years. That’s ten years you may find it more difficult to be approved for new credit. This can include having issues obtaining a mortgage, sometimes even renting a new apartment, taking out personal loans, and more.
It is also possible that if the court feels you have enough disposable income, they may transfer your bankruptcy to a Chapter 13, which does require repayment of your debt for the next three to five years.
Because of these risks, it is important to work with an experienced bankruptcy professional who can help you determine if the advantages of bankruptcy outweigh the risks for you and your family.
If you want to find out if you qualify for Chapter 7 bankruptcy in KY, call us today at (502) 435-2593. Consultations are always free, and we’re here to help!
Still Have Questions?
Filing for bankruptcy is a very complex process—and a decision that should never be taken lightly. The attorneys at GSH Law are here to discuss your options and help guide you through the process. Contact Us and let’s start you on the path to a better financial future today.
Offices in Louisville, Kentucky
GSH LAW FIRM PLLC – Louisville Bankruptcy Attorneys