There are many reasons why a person in Louisville might file for Chapter 7 bankruptcy, ranging from credit card debt to medical debt to an underwater mortgage. However, contrary to popular belief, filing for Chapter 7 bankruptcy will not ruin one's credit forever.
Home ownership may be the "American dream," but for many in Louisville, it is something that leaves them deeply in debt. There used to be the notion that if a person purchased a home at age 35 and did not refinance, they will have paid for the house entirely by the time they wanted to retire. However, in today's post-housing boom and bust age, many older homeowners still have a significant amount of mortgage debt.
Those in Louisville who have fallen behind on their bills, and are facing ever-mounting late fees, collection notices or even the possibility of lawsuits, may want to pursue debt settlement. Through debt settlement, the creditor agrees to let the debtor pay less than the full amount owed.
Pharmacogenetics Diagnostic Laboratory LLC, is a Louisville company once saw significant growth. In fact, in 2013 it was named Louisville Business Fist's 2013 business of the year. However, Louisville residents may be surprised to hear that it is now filing for Chapter 11 bankruptcy.
It may have once been the case that filing for bankruptcy was the last-ditch solution for those in Louisville facing overwhelming debt. However, many now view bankruptcy as a proactive means for reigning in control of debt they cannot cope with and coming out of the process with a clean financial slate. After all, a job loss, a serious illness or a divorce could all lead to incredibly burdensome expenses that are totally beyond a person's control.
While filing for bankruptcy may have some stigma attached to it, in fact many residents of Kentucky these days view it as a proactive way to wrest control of their debt and start over with a fresh financial slate. Oftentimes people are simply hit by some sort of financial catastrophe, such as a job loss, a medical emergency or a divorce that left them with insurmountable debt.
Kentucky residents facing spiraling debt crises are not alone. According to a GOBankingRates.com survey of 3,000 adults surveyed nationwide, 49 percent replied that they were in debt. Of those, mortgage loans were the largest source of debts. After that, came student loans, followed by credit card debt and then medical debt.
Managing debt is an important part of overall household management in the United States. Credit card debt accounts for a major slice of that debt. This type of debt can also be pernicious and hard to control for two reasons: there are hidden fees associated with some cards and the interest rates can change on relatively short notice.
Deciding whether to file for Chapter 7 bankruptcy or Chapter 13 bankruptcy takes careful thought. After all, there are advantages and disadvantages to each type of filing. Debtors in Kentucky need to carefully asses their financial situation to determine what choice is the most appropriate for them. With this in mind, let's take a moment to look at the advantages of filing for Chapter 13 bankruptcy.
Filing for bankruptcy takes more than simply submitting some paperwork to the court and appearing before a judge. For example, debtors in Louisville who are considering filing for Chapter 7 bankruptcy must complete two courses: a pre-filing credit counseling course and a debt management course. The credit counseling course must be completed within 180 days before the debtor will be allowed to file for Chapter 7 bankruptcy. The debt management course is required to have the debtor's debts discharged through the Chapter 7 bankruptcy process, and is completed after filing.