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Chapter 7 Bankruptcy
We work to get Kentucky residents a fresh financial start with Chapter 7 Bankruptcy.
If overwhelming debt has made it difficult to keep up with credit cards, medical bills, personal loans, or collection actions, Chapter 7 bankruptcy may provide the relief you need. Chapter 7 is often called "liquidation bankruptcy," but many people who file Chapter 7 in Kentucky are able to keep most or all of their property while eliminating unsecured debts.
We help individuals and families throughout Louisville and surrounding Kentucky communities determine whether Chapter 7 bankruptcy is the right solution for their financial situation. We guide clients through every step of the process and work to make filing as straightforward and stress-free as possible.
Schedule a consultation today to learn whether Chapter 7 bankruptcy may help you eliminate debt and regain financial stability.
What is Chapter 7 Bankruptcy?
Chapter 7 bankruptcy is a legal process that allows eligible individuals to eliminate many types of unsecured debt. Once your case is filed, an automatic stay immediately goes into place ordering creditors to stop most collection efforts, including:
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Collection calls
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Lawsuits
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Wage garnishments
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Bank levies
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Creditor harassment
At the conclusion of a successful Chapter 7 case, qualifying debts are discharged, meaning you are no longer legally obligated to pay them.
Common debts discharged in Chapter 7 include:
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Credit card debt
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Medical bills
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Personal loans
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Certain judgments
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Deficiency balances after repossession
Most Chapter 7 cases are completed within three to four months.
Who Qualifies for Chapter 7 Bankruptcy in Kentucky?
Not everyone automatically qualifies for Chapter 7 bankruptcy. Eligibility is generally determined through a means test that evaluates your income and financial circumstances.
Factors that may affect eligibility include:
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Household income
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Family size
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Monthly expenses
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Certain types of debt
Even if you believe your income is too high, you may still qualify. An experienced bankruptcy attorney can review your financial situation and explain your options.
What are the Steps of filing a Chapter 7 Bankruptcy?
The Chapter 7 process generally includes the following steps:
1. FREE Initial Consultation
Your attorney reviews your documents, debts, income, assets, and financial goals.
2. Credit Counseling
Federal law requires you to complete of an approved credit counseling course before filing.
3. Filing the Bankruptcy Petition
Once all costs and fees are paid and your documents are signed, your bankruptcy petition and supporting documents are filed with the bankruptcy court.
4. Automatic Stay Takes Effect
Most collection activity must stop after filing of your case.
5. Debtor Education
Federal law requires you to complete of an approved financial management course after filing.
6. Meeting of Creditors (341 Meeting)
You attend a brief hearing over Zoom where a bankruptcy trustee asks questions regarding the documents filed in your case and your financial information.
7. Debt Discharge
If no complications arise, the court issues a discharge order eliminating qualifying debts.
What about my home and car?
One of the most common concerns people have is whether they will lose their property.
Federal bankruptcy exemptions allow filers to protect certain assets. Whether you can keep your home, vehicle, or other property depends on factors such as:
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Equity in the property
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Existing loans
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Applicable exemption laws
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Your overall financial situation
Many individuals who file Chapter 7 are surprised to learn they can retain the property that is most important to them.
Our attorneys will thoroughly review your case and advise you, prior to filing your case, whether there is a chance you would lose your home or car. If there is a danger, we may recommend a different bankruptcy Chapter for you.
What Debts are Eliminated in a Chapter 7 Bankruptcy?
Debts That Can Be Eliminated in a Chapter 7 Bankruptcy
Chapter 7 can provide relief from many forms of debt, including:
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Credit card balances
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Medical debt
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Collection accounts
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Personal loans
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Payday loans
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Utility arrears
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Certain civil judgments
Debts That Generally Survive a Chapter 7 Bankruptcy
Some obligations may survive bankruptcy, including:
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Most student loans
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Child support
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Alimony
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Certain tax obligations
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Debts arising from fraud or intentional misconduct
During your Free Consultation an attorney can review your debts and explain which obligations may or may not be dischargeable.
Should I Consider Filing Bankruptcy?
You may want to consider speaking with a bankruptcy attorney if:
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You are relying on credit cards to pay living expenses.
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Collection agencies are contacting you regularly.
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Your wages are being garnished.
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Medical debt continues to grow.
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You cannot realistically repay your debts within a reasonable period of time.
The sooner you explore your options, the more solutions may be available.