Bankruptcy is a legal procedure allowing a person or business to have their debts discharged, in part or in whole. It is usually treated as a last resort, because, while it can prevent financial catastrophe, it has some major long-term consequences. This warrants careful consideration of the costs and benefits. Bankruptcy is a creation of federal law, and goes through federal courts. Therefore, the procedure governing bankruptcy in Kansas will be roughly the same as it is anywhere else in the U.S. But individual courts have different rules for what property is exempt, so you should consult a local Spring Hill, Kansas before you file.
Chapter 7 Bankruptcy in Spring Hill, Kansas
There are 2 main types of consumer bankruptcies in Spring Hill, Kansas: Chapter 7 and Chapter 13 bankruptcy. Chapter 7 requires that a certain percentage of the debtor's property be liquidated to pay off at least a small part of their debt. However, many types of property are exempt, and do not need to be liquidated, such as cars, homes, insurance policies, and retirement accounts.
Once eligible assets are sold, and the proceeds turned over to the creditors, most remaining debt is excused. However, some types of debt cannot be discharged in bankruptcy, including student loans, taxes, child support, personal injury awards, and fines. If most of your debt in Spring Hill, Kansas is not dischargeable, you might want to consider other options besides bankruptcy.
Chapter 13 Bankruptcy in Spring Hill, Kansas
Chapter 13 Bankruptcy in Spring Hill, Kansas differs significantly from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 does not eliminate any debt, but it creates a new payment plan that should give the debtor some breathing room. Usually, all of the debts are consolidated into 1 periodic payment. While this might make it take longer to pay off the debt, if the debtor is willing to make a few sacrifices, the plan should be manageable.
Which Type of Consumer Bankruptcy Should I File in Spring Hill, Kansas
Which Bankruptcy type to file under depends heavily on the facts of each individual case. If you have a steady stream of income (enough to make a payment plan manageable), and a large amount of non-exempt property that you don't want to part with, Chapter 13 may be best for you. If you don't have a steady income or large amounts of non-exempt property, you may be better off filing for Chapter 7.
Regardless of your situation, you should speak with an attorney in Spring Hill, Kansas who is experienced in bankruptcy before making a decision. They will be able to advise you of your options, and the likely consequences of each one, allowing you to make a much more informed decision.