Kentucky residents who are looking to file for bankruptcy will generally either select a Chapter 7 or Chapter 13 filing. While a Chapter 7 bankruptcy focuses on eliminating debts, this type of filing is usually unable to prevent foreclosures. Chapter 13 gives people a way of catching up on debts, including secured loans, with a three- to five-year repayment plan, and in some cases the debtor can save the home from foreclosure if regular mortgage payments continue to be made. This process also can protect cosigners from action by creditors.
Kentucky residents who owe consumer debt might be interested to learn what protections they have under the Fair Debt Collection Practices Act. The federal legislation, which is enforced by the Federal Trade Commission, sets forth a set of rules that debt collectors are obligated to follow while attempting to collect an unpaid debt or obtain information about someone who owes a debt.
Paying bills every month can be a routine for residents of Kentucky, but sometimes debt can become overwhelming. When someone is behind in their payments and receives a notification that a lawsuit is being filed against them by a debt collector, an unfortunately common reaction is to fail to show up in court. When someone who is being sued for debt avoids the courtroom, the result is usually a judgement against them.
Debtors in Kentucky may benefit from recent changes made to how medical debts will effect consumers' credit scores in the future. During August 2014, Fair Isaac Corp., better known as FICO, announced its plans to mitigate the impact medical debt has been having on its credit score algorithm. The changes are expected to raise credit scores by 25 points for those consumers whose ratings have been adversely impacted by outstanding medical expenses.