Bankruptcy is a legal procedure allowing a person or business to have their debts excused, in part or in whole. It is typically treated as a last resort, because, while it can prevent financial catastrophe, it has some influential 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 Kentucky 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 Fort Wright, Kentucky before you file.

Chapter 7 Bankruptcy in Fort Wright, Kentucky

In Fort Wright, Kentucky, there are 2 typical forms of commonly-used consumer bankruptcy: Chapter 7 and Chapter 13. Chapter 7 bankruptcy involves liquidation of some of the debtor's assets. It requires some percentage of the debtor's property to be sold in order to pay off as much of his or her debt as possible. However, the majority of property that most people own is exempt. This typically includes homes, vehicles, insurance policies, and retirement accounts. These do not need to be sold.

Once the appropriate property is sold, and the funds transferred to the creditors, the dischargeable debt is absolved. Some types of debt, however, can't be excused in Chapter 7 Bankruptcy in Fort Wright, Kentucky. These include student loans, criminal fines, and taxes, among others. If most of your debt can't be excused, Chapter 7 might not be the best choice for you.

Chapter 13 Bankruptcy in Fort Wright, Kentucky

Chapter 13 Bankruptcy in Fort Wright, Kentucky differs considerably from Chapter 7. It might be a better option than Chapter 7, depending on the facts of your case. Chapter 13 bankruptcy does not discharge debt. Instead, it restructures it. This involves the bankruptcy court coming up with a new payment plan that supersedes the terms of the arrangements that gave rise to the debt in the first place. This results in an adjusted payment plan that the debtor should find manageable, if he or she can make a few sacrifices.

Which Type of Consumer Bankruptcy Should I File in Fort Wright, Kentucky

Which Bankruptcy type to file under depends heavily on the facts of each distinct 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.

Whatever your situation, you should speak with a local Fort Wright, Kentucky bankruptcy attorney. Your lawyer will be able to advise you of your options and their likely results, which will help you make a more educated decision.