Bankruptcy in Kentucky is a legal procedure through which some of the debts of an individual or a business are discharged (excused). You should not view bankruptcy as an opportunity to eliminate your debts just because you don't feel like paying them - it can be a long and difficult process. Bankruptcy is designed to be a last resort to prevent complete financial ruin, while allowing creditors to collect at least some of their debts in an orderly fashion. Filing for bankruptcy can have major negative effects on one's credit score, which will make it more difficult to get loans in the future.
Accordingly, if you are considering bankruptcy as an option, you need to thoroughly examine the costs and benefits. A good Kentucky bankruptcy attorney can advise you as to the pros and cons of bankruptcy, and give his or her expert opinion about whether or not bankruptcy is a good option, based on the facts of your distinct case.
Types of Bankruptcy in Kentucky
Bankruptcy is governed by federal law, so the procedures in filing for bankruptcy in Kentucky will be the same as anywhere else in the United States. There are 2 basic types of bankruptcy that consumers typically use: Chapter 7, and Chapter 13, owing their names to where they are found in the U.S. Bankruptcy Code. Additionally, there is a form of bankruptcy normally used by businesses called Chapter 11. Chapter 11 is available to individuals, but it is rarely the best option for them.
Chapter 7 bankruptcy in Kentucky is sometimes called "liquidation" because it involves the forced sale of some (though certainly not all) of the debtor's assets. The bankruptcy court will appoint a trustee to oversee the appraisal and sale of some of the debtor's property, and the proceeds from the sale will go to the creditors, in their order of priority. Certain types of property are exempt, and do not need to be sold, including houses and insurance policies. Once the property is sold, and the proceeds given to the creditors, the rest of the debt is discharged. When Chapter 13 bankrutpcy is filed, the debt is reorganized instead of discharged. Essentially, the court, the debtor, and the creditors will work out a repayment plan that the debtor can manage, and will result in most of the debt being paid off, hopefully in a reasonable period of time.
Chapter 11 bankruptcy is normally used by businesses. It also involves reorganization of debts, similar to chapter 13 bankruptcy. It requires the debtor company to come up with a reorganization plan, which its creditors must vote on for approval. If it is approved, the company will then be legally obliged to carry it out.
How Can a Kentucky Bankruptcy Lawyer Help?
Making the decision to file for bankruptcy can be very difficult, given the potential consequences. A Kentucky attorney specializing in bankruptcy can advise you of the likely consequences you will face if you file, and help you determine if they are outweighed by the potential benefits.
Interesting Facts About Kentucky
The state of Kentucky is known as "the Bluegrass State". Kentucky is known for its iconic attractions, such as the Kentucky Derby, fine bourbon, and bluegrass music. Located in the eastern south central parts of the U.S., Kentucky has contributed much in the areas of manufacturing, crop production, and professional sports. It used to be a part of Virginia and officially became a state in the year 1792.
Along with three other states, Kentucky is one of the few states that use the word "commonwealth" in their official names. It is also listed among the states that have a state police force. Unlike local police forces, the jurisdiction of the Kentucky State Police extends throughout the entirety of Kentucky. The State Police force enforces Kentucky's laws, which are compiled into the Kentucky Revised Statutes. These were enacted in 1942, and help to organize Kentucky laws.
Kentucky's judicial branch is officially named the Kentucky Court of Justice. It maintains several courts, including the District Courts, Circuit Courts, Court of Appeals, and the Kentucky Supreme Court. Kentucky also operates a few specialty courts such as the Drug Court, which provides alternative approaches to certain drug offenses.
Kentucky lawyers address the various legal needs of the communities they serve in. Lawyers in Kentucky offer assistance in a variety of fields and perform tasks such as document review, answering legal questions, and representing clients in court. A Kentucky attorney can help you obtain the appropriate form of legal relief.