he first thing you are going to discover when you go to file for bankruptcy in Louisville is that there are two major types. There is a Chapter 7 bankruptcy and a Chapter 13 bankruptcy, and it will have to be determined which one you are eligible for. Seeking out the services of a bankruptcy attorney is a wise move, as this professional can not only determine which bankruptcy you are going to be eligible for, but can take you through the entire process which will be much less stressful than doing it on your own.
One of the most common reasons individuals run into financial difficulty is because of credit card debt. How these debts are handled in your bankruptcy will depend on which chapter you have applied for.
You will find that in the Chapter 7 bankruptcy action that most debt can be discharged. It may mean that any property you have that is not exempt you are going to have to give up. The trustee then sells that property and whatever money is made from the sales goes towards your creditors. There are various levels of creditors such as priority and non priority, and credit card debt is usually viewed as non-priority.
If you are entering into a Chapter 13 bankruptcy this credit debt is at the bottom of the list of creditors when it comes to getting paid. These again are considered unsecured debt, but most often in a Chapter 13 bankruptcy some portion of the unsecured debts are paid. There are several considerations that are given to this type of debt which the credit card debt falls under. There are times when credit card debt is viewed differently and this evolves around those that have used credit cards for fraudulent activities. If this is the case then the debt will not be discharged in either bankruptcy.