Law Office of Allan E. Dunaway, PLC

Bankruptcy and Financial Literacy Month

Finances can be confusing and with April being Financial Literacy Month, understanding something about bankruptcy is good for everyone, including those who believe they will never have to file a bankruptcy. Various Bankruptcy Acts have been in place since the founding of the Republic, and the current version was enacted in 1978, and significantly amended, most recently in 2005.

The two primary consumer bankruptcy filings are Chapter 7 and Chapter 13. Chapter 7 provides a discharge (elimination) of debts, typically within 6 months or less. Chapter 7 is liquidation, which means you typically have no assets (no house or car) and you do not make any repayments on your debts.

Chapter 13 is essentially a repayment plan, used by debtors who want to keep a home or a car, and they use the Chapter 13 plan to make payments on their secured debts (car and home loans), and may pay a percentage of their disposable income for their unsecured creditors, usually credit card debt.

There is a means test used to determine if you are eligible for Chapter 7. For both Chapter 7 and Chapter 13, credit counseling is mandatory. Since a Chapter 13 may last for five years, understanding how to manage a budget and keep your spending and debt under control is essential, as you cannot refile a Chapter 7 for 10 years after your discharge, and seven years for a Chapter 13.

Bankruptcy is a significant step and one that has lasting consequences. If you are overwhelmed by debt, a bankruptcy can be a financial lifesaver. A bankruptcy attorney can assist with determining which plan is best suited for your financial situation.

Source:, "Know these bankruptcy facts before you file," Andrew Housser, April 15, 2013

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For sound bankruptcy advice you can count on, from a skilled lawyer who truly cares about your future, contact the Louisville Law Office of Allan E. Dunaway, PLC. We have two convenient locations: Louisville, Kentucky, and Jeffersonville, Indiana. Our main office in Louisville is located off the beaten path so you won't have to deal with downtown traffic and can pull right up to our door and walk right in.

Call us at 502-785-1005, or send an email message. Our law firm welcomes the opportunity to serve you in any way we can.

If for some reason personal bankruptcy is not for you, if you do not qualify for the Chapter 7 approach via the "means test" and Chapter 13 reorganization is not the answer, Allan E. Dunaway works hard to inform you of other appropriate means of debt settlement that suits your unique needs.

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