Did you know there are two primary options for personal bankruptcy here in Kentucky and across the United States? How does bankruptcy work and which option should you consider for your unique circumstances?
Why Do You File for the Protections of Bankruptcy?
When you file for bankruptcy in Shepherdsville or anywhere in Bullitt County Kentucky, you’re asking a federal district court to protect you from your creditors. This protection will stop the creditors from taking all action to collect a debt, and this protection extends to such creditors as the IRS, State of Kentucky Department of Revenue and other governmental agencies, as well as common creditors such as mortgage companies, credit cards, utilities and medical bills.
What are the Two Primary Options for Personal Bankruptcy
The two primary options for personal bankruptcy are Chapter 7 bankruptcy and Chapter 13 bankruptcy. Chapter 7 is a request for an immediate discharge of all of your qualifying debts. In effect, the chapter 7 bankruptcy filing says “I cannot pay my debts today, I probably won’t be able to pay them tomorrow, and I wish to be released from them as of today.” In exchange for getting rid of all of my debts today, if I have any property over and above the substantial amount I’m allowed to keep (based on substantial federal and State exemptions) I’m willing to give it up in exchange for getting a fresh start.
A Chapter 13 bankruptcy essentially tells the bankruptcy court “I can’t pay my debts the way my creditors are demanding I pay today, and I’m going to propose to pay some payment each month, and some portion or percentage of the debt back over time. Regardless of the amount paid back, once I’ve completed my payment plan I will ask the bankruptcy court to dismiss any remaining debt (including interest and penalties) that I haven’t been able to pay. In exchange for paying back (at least part of) what I owe I get to keep all that I own including my home and my car.”
Bankruptcy Isn‘t the End, It’s the Beginning
There are times to work through things, and times to make a different decision and move forward. Bankruptcy isn’t something to be ashamed of. It is specifically designed to provide our citizens with the opportunity to recover from hardship and get back on their feet.
Which of the two primary options for personal bankruptcy is best for you? At the Law Offices of John Schmidt & Associates, PLLC, we stand ready to provide sound advice and help you to start working on resolving problems and moving forward. Our helpful, caring and experienced team care about what is best for you and helping to guide you toward a more positive future.