Bankruptcy Center

Kentucky Bankruptcy Law Information

If you are overburdened with debt and need to consult a Louisville bankruptcy lawyer, Raphael J. Whitford is an experienced bankruptcy attorney who only practices bankruptcy law. Whether you are considering filing for Chapter 7 or Chapter 13 bankruptcy, attorney Raphael J. Whitford will provide you with personal attention and a positive approach to debt counseling. With compassionate service and a commitment to simplifying the legal maze surrounding debt relief and filing bankruptcy in Louisville, bankruptcy lawyer Raphael Whitford offers legal representation to clients in the cities of Louisville, Lexington, and Shelbyville. He also counsels clients in Kentucky Bankruptcy law in the surrounding counties.

For a free consultation, contact a Kentucky bankruptcy law attorney today.

Kentucky Bankruptcy Law - An Overview

Bankruptcy . . . Just the sound of it evokes strong feelings in most people. It's rarely anyone's first choice when trying to cope with overwhelming debt, the decision of filing bankruptcy in Kentucky can be the right one when made with full awareness of all its consequences. Consulting a Louisville bankruptcy lawyer is a vital step in understanding your legal options.

Even the hardest workers and the most diligent bill-payers can find themselves with more debts than they can pay as they become due. In such cases, a Louisville bankruptcy lawyer may provide a solution to what seems like an insurmountable problem. If you or someone you know is facing serious financial challenges, it is very important to seek the counsel of an experienced Kentucky bankruptcy law attorney. Once considered a last resort, Kentucky bankruptcy has evolved into an accepted method of resolving serious financial problems. The bankruptcy lawyer's goals are to help debtors make a fresh start. A skillful Louisville bankruptcy lawyer can guide you through the complicated legal maze of Kentucky bankruptcy law.

Bankruptcy law is primarily federal in origin and therefore varies little from state to state. The United States Constitution grants to Congress the power to establish uniform bankruptcy laws throughout the United States, which ensures consistency and predictability in how bankruptcy proceedings are conducted. The individual states do, however, retain jurisdiction over certain debtor-creditor issues that are not addressed by and do not conflict with federal bankruptcy law, such as which property remains exempt from creditors' claims.

Commercial and Consumer Bankruptcy

Both businesses and individuals may consider discussing bankruptcy with a qualified Louisville Bankruptcy lawyer. Commercial bankruptcy is a remedy available to Louisville businesses that are unable to pay their debts. Options include liquidation bankruptcy, in which many of the business's assets are sold and the proceeds are divided among the creditors, and reorganization bankruptcy or restructuring bankruptcy, in which the business continues to operate according to a plan that allows for at least partial payment to creditors.

Consumer bankruptcy, by contrast, is a method by which Louisville individuals may be able to get out from under insurmountable debt and make a fresh start, albeit with a negative impact on their credit ratings. As in commercial bankruptcy, there are two options: liquidating assets to pay off creditors, and filing a wage-earner plan that allows the debtor to retain more assets while working to pay off his or her debts. An experienced Kentucky bankruptcy law attorney can help you choose the right course of action for your particular situation.

Chapter 7 Liquidation

Bankruptcy law provides two basic forms of relief: (1) liquidation, and (2) rehabilitation, also known as reorganization. Most bankruptcies filed in the United States involve liquidation, which is governed by Chapter 7 of the Bankruptcy Code. To qualify for Chapter 7, an individual debtor in the Louisville has to satisfy a financial means test. In a Chapter 7 liquidation case, a bankruptcy "trustee" collects the debtor's "nonexempt" property (as opposed to the property that the debtor is allowed to keep and that is not subject to the creditors' claims) and converts it into cash. The trustee then distributes the resulting funds among the various creditors according to an order of priority described in the Bankruptcy Code. Not all creditors receive the full amount owed through this process; in fact, some may receive no payment at all. When liquidation and distribution are complete, the Louisville bankruptcy court may discharge any remaining debts of an individual (non-business) debtor. If the debtor is a corporation, it ceases to exist after liquidation and distribution, and there is therefore no reason for further discharge because the creditors cannot seek payment from an entity that no longer exists. Talk to one of our Louisville bankruptcy lawyers to see if liquidation bankruptcy is right for you.

Chapter 11 or 13 Reorganization

In a rehabilitation or reorganization, the option often preferred by the courts, creditors may be provided with a better opportunity to recoup what they are owed. This type of bankruptcy is governed by Chapter 11 or Chapter 13 of the Bankruptcy Code. Chapter 11 generally applies to individual debtors with excessive or complex debts, or to large commercial entities like corporations. Chapter 13, by contrast, generally applies to individual Louisville consumers with smaller debts. Farmers and municipalities may seek reorganization through the Code's special chapters, Chapters 12 and 9, respectively. Reorganization provides debtors with a greater opportunity to retain their assets if they agree to pay off their debts according to a plan approved by the bankruptcy court. If the debtor fails to adhere to the plan, however, the court may still order liquidation.

Whatever the Chapter, the petitioning debtor must first undergo an individual or group briefing regarding credit counseling and budget analysis skills. We advise that you seek a Louisville bankruptcy lawyer for advice and guidance in this process.

"Voluntary" and "Involuntary" Bankruptcies

Most Kentucky bankruptcy law cases are filed by the debtor and are thus considered "voluntary bankruptcies" (although few would "volunteer" to be in this position). Once a bankruptcy petition is filed, the debtor is immediately entitled to relief from creditors through the bankruptcy procedure known as the "automatic stay." The automatic stay freezes all debt-collection activity and forces creditors to allow the Louisville bankruptcy court to determine how payment will be made.

Not all bankruptcy proceedings are voluntary, however. Under Chapters 7 and 11, creditors, too, have the option of filing for relief against the debtor, in which case the proceeding is called an "involuntary bankruptcy." Involuntary bankruptcies are allowed only when certain minimum thresholds are met; for instance, there must be a minimum number of creditors and a minimum amount of debt. The Louisville debtor has the right to file a response to an involuntary petition, after which the court will determine whether the creditors are actually entitled to relief. If the court dismisses an involuntary bankruptcy filing because it has no merit, the creditors may be ordered to pay the debtor's attorneys' fees, damages for any losses the debtor experienced because of the bankruptcy, and even punitive damages to punish the creditors for the frivolous or abusive filing of a petition. An experienced Louisville bankruptcy law lawyer can provide essential advice whether you are a debtor considering voluntary bankruptcy or facing an involuntary bankruptcy proceeding, or a creditor seeking relief through an involuntary bankruptcy.


Kentucky bankruptcy lawyers can help both debtors and creditors overcome obstacles to the repayment of debt. Their experience often extends beyond bankruptcy to include debt repayment and collection options that can circumvent the need for filing bankruptcy in Kentucky. Experienced Louisville bankruptcy lawyers have the knowledge to help their clients get out from under formidable debt.

DISCLAIMER: This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel from a Louisville, Kentucky bankruptcy law attorney for advice on any legal matter.