What Consumer Bankruptcy Type Am I Eligible for?

By even just quickly weighing your assets versus debts, you may conclude that you need intervention from an external source to get your finances straight. That is, you may most definitely need the assistance and protection of the Kentucky bankruptcy court. However, you may be unsure of which bankruptcy type to petition for. That said, please read on to discover what consumer bankruptcy type you are eligible for and how a seasoned Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you file for the appropriate one.

What consumer bankruptcy type am I eligible to file for?

Namely, there are two consumer bankruptcy types accessible to you: Chapter 7 and Chapter 13 bankruptcy. It is not so much a matter of picking between the two but rather identifying which one you are eligible for.

For one, Chapter 7 bankruptcy is primarily designated for individuals and married couples who have fallen below the median income line for Kentucky over the most recent 60 months. This is because this bankruptcy type is set to liquidate a portion of their assets to pay off most of their outstanding debts. Specifically, as of 2024, the median monthly income in Kentucky is deemed as $7,475. Further, making any more than $12,475, you may sooner petition for Chapter 13 bankruptcy.

That is, Chapter 13 bankruptcy is mainly used by individuals and married couples who have a steady, considerable income but simply need to reorganize their debts to get back on track financially. This is because this bankruptcy type has them follow a court-approved, three- to five-year repayment plan to pay off the rest of their outstanding debts. Of note, as of 2024, petitioners cannot have more than $1,395,875 in secured debts nor $465,275 in unsecured debts if filing for Chapter 13 bankruptcy.

Should I file for consumer bankruptcy as an individual or a married couple?

Now that you have determined which consumer bankruptcy type is most suitable, you may be debating whether to file as an individual or with your spouse as a married couple. Well, again, this all depends on the specifics of your given financial situation. With this, you must ask yourself whether a majority of your debts are personal or shared with your spouse.

If you share considerable debt with your spouse, filing jointly may allow you to protect more of your property as you may qualify for more exemptions. On the other hand, if you have mostly personal debt, you may want to save your spouse from taking a plunge in their credit score and suffering other repercussions.

In conclusion, you should know that a competent Louisville, Kentucky consumer bankruptcy lawyer is here to assist you with whatever your legal issue may be at this time. So please reach out to us at Schwartz Bankruptcy Law Center today.