Schwartz Bankruptcy Law Center
Louisville 502-485-9200
New Albany 812-945-9200
Toll Free 866-366-3328

Louisville Bankruptcy Legal Blog

Using bankruptcy after a lawsuit

A previous post on this blog talked about how a high-profile former political figure recently filed bankruptcy in the wake of a legal judgment against her. While that post mentioned that her bankruptcy could help her manage the debt from that lawsuit, residents of Louisville might benefit from some additional explanation.

More Kentuckians than one might think find themselves on the receiving end of a lawsuit at some point in their lives. On the most basic level, creditors who want to start collecting on an overdue debt have to file a lawsuit before doing so, even if there is no dispute that the money is owed.

Fiancé of former governor files Chapter 13

The woman who was known as the first lady of another state at one time has filed for Chapter 13 bankruptcy protection. This action will allow her to create a repayment plan to pay back her creditors over three to five years. The exact amount of her repayment plan, as well as how long she will have to pay it, will depend to some extent, on how much money she has made of late.

The reason this story attracted national media attention, including the attention of a Kentucky media outlet, is that the women was embroiled in a scandal. That scandal led to the resignation of her partner, the governor of another state.

Common credit card marketing tricks to bait consumers into debt

It's no coincidence how turning 18-years-old can make you a visible target for credit card offers. The hype and allure is all over the marketing material that appears to give young consumers an easy way to get what they want apart from their parents help. Unfortunately, the debt trap is cunningly set for people of all ages, but especially those who are young and uneducated on personal finance.

Many people find themselves struggling for years with high credit card debt that never seems to get resolved. Credit card marketing traps cause many people to fall into a downward spiral of money problems, until landing on the rock-hard surface of bankruptcy.

Chapter 13 bankruptcy is not something to handle alone

While many Louisville, Kentucky, residents are quite adept at handling most of their financial affairs without help, there are some financial challenges one should just not try to tackle without help.

Among those challenges include dealing with the IRS in a full-blown tax audit and deciding exactly when it is safe to retire. As relevant to this blog, though, bankruptcy, especially Chapter 13 bankruptcy, is also not one generally something a person should try to face without legal assistance.

Kentucky has a higher than average personal bankruptcy rate

Although Louisville residents probably recognize that the economy across the country has been improving steadily over the last several years, the reality is that the residents of this state still struggle financially when compared to those of other states, at least if one trust recent statistics regarding bankruptcy filings.

In fact, Kentucky ranks among the top 10 states with respect to the number of bankruptcy filings per 100,000 people living in the state. For every 100,000 residents, about 345 of them file for bankruptcy, although it should be noted that these numbers could include married couples who are filing a joint petition.

Rebuilding credit after a bankruptcy

A previous post suggested that, sometimes, businesses and individuals who are offering alternatives to bankruptcy often scare Louisville, Kentucky, residents with stories about how bankruptcy will ruin their credit and leave them in a very difficult situation that, in the long term, may be worse than their present financial troubles.

To be candid, bankruptcy does significantly affect one's credit score, and it can do so for a long time. It can mean, for instance, that a person who looked like a good credit risk before a bankruptcy will seem marginal at best right after filing.

Common bankruptcy myths

Having a mountain of debt can make life difficult and stressful. When the debt gets to be too much, it can almost seem pointless to try to do anything about it.

There are a lot of options for dealing with debt, and some of them, like bankruptcy, have gotten a bad reputation. The truth is that there isn't one solution that works for every situation. There are a lot of options, and even some of those can be tailored to be a better fit.

Do I have to list everything I owe in bankruptcy?

Many families in Louisville, Kentucky choose to file a Chapter 7 bankruptcy in order to eliminate a debt that is particularly cumbersome or stressful for a family. For instance, the family may be driven to bankruptcy because of a particularly aggressive credit card company or medical bill collector which seems willing and ready to garnish wage or take other serious action.

On the other hand, the family might not want the bank that hold their mortgage or the company which financed their car to know that the family is even experiencing financial trouble, especially since they plan on paying these loans off timely once they shake off some other debts. As a result, they may not want to "file on" these creditors simply by not listing them as one of their debts.

Can tax debt be eliminated by filing bankruptcy?

For a variety of reasons, some residents of Louisville will find themselves facing trouble with tax debt. In some cases, there could have been an honest mistake or surprise with respect to what one's tax obligation was, while in other cases, back taxes could just be a symptom of one's overall poor financial health.

Whatever the reason, Kentuckians should take comfort to know that, under certain limited circumstances, tax debts can be discharged via a Chapter 7 bankruptcy, as can late fees and other penalties associated with these dischargeable tax debts.

The problem with medical debt continues

Even with the recent healthcare reforms approaching its 10th birthday, bankruptcy due to medical debt is an ongoing problem both in the Louisville area and the rest of the country. How much of a problem medical debt is, however, is a subject that is up to some debate.

According to some comments by the former President, 1 million people were filing bankruptcy annually because of uncovered medical expenses. Others estimated over 643,000 people filing bankruptcy annually because of their medical debt.

  • NACBA- National association of consumer bankruptcy attorneys
  • LexisNexis- AV -Peer review rated
  • Kruger & Schwartz BBB Business Review
Contact Our Attorneys

Privacy Policy | Business Development Solutions by FindLaw, part of Thomson Reuters.

Back to top