Current or Prospective Clients can use this page as a resource to:
- read answers to FAQ
- MAKE AN APPOINTMENT
- TAKE YOUR CREDIT COUNSELING CLASS
- ACCESS YOUR FILE TO:
- confirm reciept of documents
- check on status of your chapter 13 plan
- check on status of your chapter 7 case
BANKRUPTCY COURSES :
Our Attorney Code is 0230629 and must be given to the Bankruptcy Courses.
I have been practicing bankruptcy law for 10 years and some questions seem to pop up a lot more than others, I will try to include the answers here. I will be adding all along.
What are the differences between the different chapters in bankruptcy?
A chapter 7 case is the type that often provides complete clean slate and wipes out all your debts in a 90-120 day court process. The debts have to be dischargeable debts; however most debt is dischargeable. To qualify for a chapter 7, you either have to earn less than the median income for a KY household of the same size, or you can qualify under "the long form means test." This is a test that creates a presumption about your disposable income.
Should my spouse file with me?
Answer: It depends and yes I know lawyers say that a lot. It does not cost any more to file your case jointly with your spouse. If you owe many debts jointly with your spouse, this makes a lot of sense because a co-debtor does not get the benefit of a discharge order otherwise. This means the co-debtor can be left having to pay the debt by themself. On the other hand, there are reasons to file individually. The clear case is where the spouse does not qualify to file due to a previous filing or would stand to lose property if the case were filed jointly. For example, maybe the spouse holds title to some property or asset in their sole name and that property would be in jeopardy if joining the bankruptcy. I am often asked or told that "I want spouse to file the we want to preserve one of our credit scores."
Th this topic could be debated but I very rarely recommend sacrificing real real money in exchange for FICO score. There are a number of reasons for this. While a FICO score is intended to be a measure of one's creditworthiness, is it really? We know the value of the money and can quantify that. On the other hand, different lenders give different weight to FICA scores and I understand why. I have seen all the following effects FICO scores: the number of times a person's credit score is inquired about, a wealthy person whose bookkeeper neglected the books for a short time, errors in credit reporting. I say this merely to illustrate my point. I recommend and assist my clients to make smart money decisions and hope a good FICO score will follow. To me, if a person gives up money for the benefit of FICO score, now that would be a good reason to lower their FICO score. It does not.
A chapter 13 is a great way to get out of financial trouble for a lot of people. It resembles debt consolidation but there are key differences that make this remedy much more powerful. For one, a federal bankruptcy court has authority over the creditors. You propose a repayment plan that you can afford and if confirmed by the court, the creditors are bound to accept it. Some plans can pay only a percentage on the dollar. Some debt types are re-paid interest free. You are required to make your best efforts to pay any disposable income to creditors over the course of the repayment plan.
A chapter 11 is a business reorganization or essentially a restructuring of its financial obligations so that it can try to survive. A chapter 12 is exclusively for family farmers or commercial fishermen.
Can I keep my car and/or my house if I file chapter 7 Bankruptcy?
- Answer: Yes, you can. This is referred to as a reaffirmation and it is routine. While a reaffirmation requires the consent of both sides, it is virtually guaranteed if you are current on your payments. A negotiated resolution can often allow you to keep your car or home even if you are behind.
- Will filing bankruptcy hurt my credit score?
- Answer: YES. A chapter 7 or chapter 13 bankruptcy is a negative impact on your credit score known as a fico score. However, I find to some clients whose scores are already really low, it is more important to file and bottom out the score so that they can start saving and thus start the credit rebuilding process.
- HOW CAN FILING BANKRUPTCY BENEFIT ME ?
- Bankruptcy may make it possible for you to:
- Eliminate the legal obligation to pay most or all of your debts. This is called a “discharge” of debts. It is designed to give you a fresh financial start.
- Stop foreclosure on your house or mobile home and allow you an opportunity to catch up on missed payments. (Bankruptcy does not, however, automatically eliminate mortgages and other liens on your property without payment.)
- Prevent repossession of a car or other property, or force the creditor to return property even after it has been repossessed.
- Stop wage garnishment, debt collection harassment, and similar creditor actions to collect a debt.
- Restore or prevent termination of utility service.
- Allow you to challenge the claims of creditors who have committed fraud or who are otherwise trying to collect more than you really owe.
- Bankruptcy may make it possible for you to:
WHAT PROBLEMS WILL BANKRUPTCY FILING NOT FIX?
Bankruptcy cannot, however, cure every financial problem. Nor is it the right step for every individual. In bankruptcy, it is usually not possible to:
- Eliminate certain rights of “secured” creditors. A “secured” creditor has taken a mortgage or other lien on property as collateral for the loan. Common examples are car loans and home mortgages. You can force secured creditors to take payments over time in the bankruptcy process and bankruptcy can eliminate your obligation to pay any additional money if your property is taken. Nevertheless, you generally cannot keep the collateral unless you continue to pay the debt
- Discharge types of debts singled out by the bankruptcy law for special treatment, such as child support, alimony, certain other debts related to divorce, some student loans, court restitution orders, criminal fines, and some taxes. (see Kentucky Non-Dischargeable Debts)
- Protect cosigners on your debts. When a relative or friend has co-signed a loan, and the consumer discharges the loan in bankruptcy, the cosigner may still have to repay all or part of the loan.- Discharge debts that arise after bankruptcy has been filed.
HOW OFTEN CAN I FILE BANKRUPTCY ?
You cannot receive a discharge in a Chapter 7 case if you received a discharge under a Chapter 7 case filed in the last eight years or a Chapter 13 filed in the last six years. You cannot receive a discharge in a Chapter 13 case if you received a discharge under a Chapter 7 case filed in the last four years or a Chapter 13 filed in the last two years. If didn’t received a discharge in the previous bankruptcy filing, depending on why this is the case, you can file and receive a discharge without any time restrictions.