Call for a free bankruptcy consultation

Louisville |

502-485-9200

New Albany |

812-945-9200
Schwartz Bankruptcy Law Center

Keeping property is one advantage to Chapter 13


As previous posts here have discussed, one of the advantages to Chapter 13 bankruptcy is that a Kentucky family gets to hang on to all of their property, even after the bankruptcy. This is different from the more common Chapter 7 bankruptcy, in which a debtor may need to surrender non-exempt property to a bankruptcy trustee so that it can be used to pay off creditors. Instead, a Chapter 13 debtor agrees to a repayment plan over time.

Like a Chapter 7, however, a Chapter 13 bankruptcy does not have a long-term effect on secured loans, like mortgages and car loans, although a Chapter 13 can be used to catch up on delinquent payments. To explain this advantage in greater detail, Kentucky, like most other states, has a list of exempt property that debtors would be allowed to keep in the event of a bankruptcy or, for that matter, a collection proceeding taking place outside of bankruptcy. Should a debtor be able to use those exemptions to keep all or most of their property after a bankruptcy, then a Chapter 7 might make sense.

The problem is that some debtors have their wealth tied up in non-retirement accounts and property that would not be exempt from bankruptcy proceedings under the law. This means that those debtors need to choose between immediate financial relief via a Chapter 7 and protecting their long-term savings that they were planning to use for other purposes, such as expenses in their old age or a legacy for their children.

In these sorts of cases, so long as the debtor has a regular income through which to pay off some of their debts, a Chapter 13 bankruptcy might be a good option, since it will allow a debtor to protect their property and get debt relief.

No Comments

Leave a comment
Comment Information
Email Us For a Response

Need A Solution To Your Debt Problems?

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

Make A Payment
Schwartz Bankruptcy Law Center

Office Locations:

Louisville Office
3339 Taylorsville Road
Louisville, KY 40205

Phone: 502-485-9200
Fax: 502-485-9220
Louisville Law Office Map

New Albany Office
501 State Street
New Albany, Indiana 47150

Phone: 812-945-9200
Fax: 502-485-9220
Map & Directions

Phone:

LOUISVILLE |

NEW ALBANY |

Fax: