If you cannot keep up with your bills, a Hopkinsville bankruptcy attorney will help you eliminate debt and get a fresh start. We can help you create a comprehensive debt relief strategy that includes either a Chapter 7 or Chapter 13 bankruptcy.
What Is Bankruptcy?
Bankruptcy is a legal process that discharges certain types of debt. Unfortunately, in the past, some people delayed filing bankruptcy due to social stigma. However, it’s not shameful to file for bankruptcy. Many hard-working Americans become unable to pay their bills after a job loss, unexpected disability, or a divorce. In these situations, bankruptcy is the first step towards rebuilding your financial future.
There are two primary types of personal bankruptcy in the United States:
- Chapter 7 bankruptcy: Sometimes called a “liquidation bankruptcy.” You sell your nonexempt assets in exchange for the discharge of your debts. If you do not have nonexempt assets, your creditors receive nothing in exchange for the discharge – in fact, most Chapter 7 bankruptcies filed do not involve selling any assets. A Chapter 7 bankruptcy takes roughly six months to complete.
- Chapter 13 bankruptcy: Rather than a liquidating property, you enter a repayment plan with your creditors. You typically have up to five years to pay your debts under this plan.
Each chapter has its own distinct advantages and disadvantages. A Hopkinsville bankruptcy attorney will help you decide which option is best suited to your situation.
Why Should I File for Bankruptcy?
Bankruptcy is not for everyone. You cannot discharge certain debts during bankruptcy, such as unpaid child support, unpaid alimony, and most student loans. Before you file bankruptcy, you should consider all of your options. For example, you might be able to restructure or settle certain debts directly with your creditors. Or, you might benefit from debt counseling.
However, many Kentucky residents benefit significantly from bankruptcy. If you are overburdened by dischargeable debts (such as medical bills, personal loans, and credit card debt), a Hopkinsville bankruptcy attorney can help you end the harassing phone calls, collections lawsuits, and wage garnishment. And, once you are debt-free, you can start rebuilding your credit score and finances.
Do I Qualify for Bankruptcy?
To qualify for bankruptcy, you must meet strict legal requirements. Each chapter has its own eligibility criteria:
- Chapter 7 eligibility: You must meet the “means test.” In other words, you must show that your assets are below a state-specific threshold.
- Chapter 13 eligibility: You must show that your debts are below a different threshold. Since Chapter 13 involves a repayment plan, the bankruptcy court must believe that you can actually repay your debts.
These eligibility calculations can become very complicated. If you need help assessing your eligibility, contact a Hopkinsville bankruptcy attorney. A lawyer can help you evaluate your finances and tailor a debt relief solution that meets your needs and long-term goals.
Understanding the Bankruptcy Process
To file for bankruptcy in Hopkinsville, you (or your Hopkinsville bankruptcy attorney) must file a series of documents with the United States Bankruptcy Court in Paducah. These documents:
- Indicate what type of relief you are seeking (Chapter 7 or Chapter 13),
- Identify your creditors and debts,
- Discuss your income and assets, and
- Present a proposed repayment plan (if you are filing under Chapter 13).
Drafting a bankruptcy petition is exacting and detail-oriented work. If you do not list all of your assets and income, the court might deny your petition. And, the bankruptcy court can only discharge the debts listed in your petition.
Once you file your bankruptcy petition and supporting documents, the bankruptcy court will appoint a trustee. The trustee will oversee your bankruptcy and either liquidate your assets or review your repayment plan.
Depending on whether you are filing under Chapter 7 or Chapter 13, the actual bankruptcy process will vary. Your Hopkinsville bankruptcy attorney will help you navigate the process: negotiating with the trustee, attending court hearings, and advocating on your behalf. If you are unrepresented, you must do all of this on your own.
Consult with a Hopkinsville Bankruptcy Attorney
A Hopkinsville bankruptcy attorney can help you craft a personalized debt relief strategy. Due to the complexities of the bankruptcy system, it is very difficult to handle a Chapter 7 or Chapter 13 filing on your own. At Farmer & Wright, we help our clients file for bankruptcy and rebuild their futures. We are compassionate, detail-oriented, and determined litigators. Contact us for a free consultation today.