When many Kentucky residents think of bankruptcy, they are probably thinking about Chapter 7 bankruptcy, which is commonly known as "liquidation" bankruptcy. Under Chapter 7 bankruptcy, a filer will list all non-exempt assets, which are then sold off, with the proceeds going to pay down debts to creditors. However, there is another alternative for residents who are seeking options to alleviate debt concerns: Chapter 13 bankruptcy.
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.
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.
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.
Having a decent car is nothing short of essential for many families in the Louisville area. Some rely on their vehicles to make their living, and the vast majority of Kentucky residents at least need a car to commute to and from their jobs, to do errands and to help their kids and other family members to have an enjoyable life.
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.
Families in Kentucky who find themselves in financial trouble may elect to file a Chapter 13 bankruptcy, opting for a three-year to five-year repayment plan in lieu of turning over non-exempt property and dealing with their debts all at once. For those contemplating this type of bankruptcy, it may be helpful to have some understanding of "disposable income" and how it is figured. However, as with other legal concepts, detailed questions about one's disposable income are best raised with an experienced bankruptcy attorney.
Aside from maybe a foreclosure notice or a garnishment, there are few things that disturb a Louisville resident's financial peace more than getting a notice that their car is about to get repossessed. Worse, some families may wake up one morning to discover that the vehicle they counted on is gone, legally seized by a repossession company working on behalf of a bank or financing company.
As previous posts here have discussed, Chapter 13 bankruptcy is distinct in that a Louisville family who chooses this option will be expected to repay all or part of their debts. More specifically, the family will get to hang on to all of their property, but they will need to make monthly payments to a court officer, called a "trustee," for anywhere between three and five years. At the end of the day, the family will be expected to pay at least 10 percent of their debts and may need to pay up to all of their debts off.
Although many people might want to compare a Chapter 13 repayment plan with the more popular Chapter 7 bankruptcy, other residents of Louisville, Kentucky might also wonder whether it is advantageous to file bankruptcy at all, especially if they are being forced to file a Chapter 13 because their income keeps them from filing Chapter 7.