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Posts tagged "Chapter 7 bankruptcy"

Bankruptcy filing for debtors with tax debts

Kentucky individuals who are struggling with debt and considering filing for bankruptcy may not know that past due tax obligations are not always eligible for discharge. A Chapter 13 bankruptcy establishes an arrangement for the debtor to repay all obligations over a period of three to five years in accordance with an approved plan, but Chapter 7 allows the discharge of certain types of debt, including federal tax debt if it meets strict requirements.

The effect of Chapter 7 bankruptcy on a business

Some Kentucky business owners who are unable to pay their debts might be able to keep their business even if they file for Chapter 7 bankruptcy protection. The determining factor in whether a business can stay in operation is the type of business entity. Owners of sole proprietorships are in some cases able to keep their businesses while partnerships, LLCs and corporations are required to liquidate their assets and close their doors permanently.

Understanding the law regarding paying discharged bankruptcy debt

Kentucky residents with overwhelming consumer debt may be interested in repayment options, including those that come after debt is discharged in bankruptcy. Depending on the specifics of the debt, some borrowers may still wish to pay these debts when there is no legal need to do so.

The Chapter 7 bankruptcy process

Kentucky residents who are considering filing for Chapter 7 bankruptcy may have questions about what it involves. Chapter 7 is also known as a liquidation. Unlike in Chapter 13, which involves a repayment plan, certain property and assets of the debtor are sold by the trustee in order to pay a portion of the owed debt. Although debtors may expect to lose some property, there are many categories of property that are exempted under both federal and state law so debtors will not lose everything.

What is the role of the Chapter 7 trustee?

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.

Distinctions between Chapter 7 and Chapter 13 bankruptcy

Kentucky residents struggling with financial challenges and seeking debt relief may be interested to know about how personal bankruptcy might work to help them manage or eliminate debt. The two most common types of individual bankruptcy are Chapter 7 and Chapter 13, which differ from each other in certain key aspects.

Learning the basics of bankruptcy in Kentucky

In 1934, the Supreme Court stated in one of its opinions that bankruptcy represents an opportunity for the honest but unfortunate debtor to get a fresh start without being discouraged by previous debt. There are several different chapters in the Bankruptcy Code that allow individuals, married couples and businesses to get the fresh financial start that they need.

Rebuild credit as soon as possible after bankruptcy

Residents of Kentucky who have gone through Chapter 7 bankruptcy and had their unsecured debts discharged should begin looking for opportunities to rebuild their credit as soon as possible. Although there are some lenders who may not agree to extend credit to an individual who just came out of bankruptcy, there are several products on the market specifically designed for individuals who have completed the bankruptcy process and are looking to restart their credit history.

Debt management strategies

Some Kentucky residents may be interested in the different ways that a consumer might try to manage large debts. Debt settlement and bankruptcy may have different effects on a debtor's credit history, and the strategies may be more or less effective depending on the circumstances of each case. Bankruptcy generally causes the most damage to the debtor's credit report, but the debt settlement process can also be damaging.

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