Bankruptcy FAQs

Offering Personal Attention and a Positive Approach to Debt Relief in the Louisville Area

1. What are the recent changes in Kentucky Bankruptcy laws?

New bankruptcy laws went into effect in late 2005 which made major changes to the bankruptcy law. The new laws add complexity and many new requirements for filing under both Chapter 7 and Chapter 13, including providing detailed information on income to the bankruptcy court. In addition, everyone who files a bankruptcy in Louisville must participate in a credit counseling session in order to file a bankruptcy petition and complete an education course in order to be discharged from a bankruptcy. Despite the new laws, bankruptcy relief is still available for most everyone who needs protection from creditors and an opportunity for a FRESH START. Talk to a Louisville Bankruptcy Lawyer about your options.

2. What is Bankruptcy?

Bankruptcy is a federal law enacted by congress, designed to help consumers and businesses who are having financial difficulties and unable to pay their debts. Bankruptcy is Court ordered protection from creditors and an opportunity to either eliminate or restructure most debts. Bankruptcy stops harassment from creditors and bill collectors. We advise you consult a Louisville bankruptcy lawyer if you want to know if bankruptcy is right for you.

3. What is the difference between Chapter 7, Chapter 13 and Chapter 11 Bankruptcy?

Chapter 7 eliminates or "discharges" most debts. Most credit card debt, lines of credit, bank loans, medical bills and past due accounts are discharged in Chapter 7. Chapter 7 bankruptcy is called the "fresh start" approach to financial recovery. Chapter 7 offers protection from harassing creditors. It stops credits from garnishing wages and attaching bank accounts. Chapter 7 allows you to keep your personal and real property, within limits. Chapter 7 is an affordable, honest alternative to your financial problems.

Chapter 13 bankruptcy provides for a re-organization or consolidation of debt through reduced, affordable payments budgeted to income and living expenses. Chapter 13 stops foreclosures by allowing you to pay past due mortgage payments over a period of three to five years. Chapter 13 may allow you to restructure auto loans so that payments are more affordable. In addition, income tax debt may be re-structured. Chapter 13 bankruptcy also applies to small businesses. It allows you to continue operating your business during the re-organization period.

Chapter 11 bankruptcy is similar to Chapter 13 but is geared toward larger businesses and corporations.

Ultimately, all chapters of bankruptcy law have their benefits and detriments, and what is right for you will depend heavily on your current financial situation. A Louisville bankruptcy lawyer can guide you through your options, help you make the right decision.

4. Will Bankruptcy stop creditor harassment and phone calls from bill collectors?

Yes. Bankruptcy is a court-ordered protection which prevents your creditors and bill collectors from contacting you in any manner. Thomas Burns is a Louisville bankruptcy lawyer with the knowledge and experience to protect your rights, and use the law to keep bill collectors off your back.

5. Will I lose any property if I file for Bankruptcy?

Everyone who files for bankruptcy is allowed to keep and maintain a certain amount of property, including personal possessions, auto, bank accounts, retirement accounts and real estate. This property is said to be "Exempted" from the Bankruptcy. The vast majority of people who file for bankruptcy keep all of their property. A Louisville bankruptcy lawyer can help ensure that you keep most or all of your property, and help you do know what risk losing before you even file.

6. I am behind on my car payment or house payments, can Bankruptcy help me?

Yes, Chapter 13 is the solution. Chapter 13 allows you to keep your car and/or house. It allows you to repay past due mortgage payments and car loans over a three to five year period. This payment is made by you to a Chapter 13 Trustee who in turn pays the creditors. Chapter 13 stops repossessions and foreclosures. Talk to a Louisville bankruptcy lawyer about how Chapter 13 can protect your property.

7. I have past due Taxes, can Bankruptcy help me?

Yes, once again Chapter 13 is the solution. Chapter 13 stops garnishments and levies by the IRS. In most cases tax debt can be re-structured or eliminated in the Chapter 13 proceeding.

For a free consultation with a Louisville Bankruptcy lawyer, Contact Raphael J. Whitford today.