Kentucky law protects citizens who owe debt to credit card companies from being sued by collections agencies after a period of years has passed. This is meant to protect residents from being forced to defend themselves in a court of law after a long time has passed and their ability to produce exonerating evidence is impaired.
Kentucky residents who have unsecured debt like medical bills or maxed out credit cards may want to learn about the 1099-C form. The 1099-C 'cancellation of debt" form is an IRS document that is sent to individuals after some types of debts are either canceled or forgiven. Although former debtors may think they owe nothing once a debt is resolved, they might owe something to the IRS during tax season.
When a Kentucky resident files a petition for Chapter 7 bankruptcy, the U.S. trustee appoints the case to an impartial trustee who liquidates the nonexempt assets of the debtor. If all of the assets are exempt or subject to valid and approved security interests, they are not distributed to unsecured creditors, and the trustee usually submits a no asset report to the court.