Kentucky residents who are struggling to pay their credit card or other types of debt may find that bankruptcy is an effective solution to their problem. If an individual doesn’t have much in the way of assets, he or she may be eligible for Chapter 7 bankruptcy. This could allow a debtor to eliminate some or all of their unsecured debts while having the option to continue making secured debt payments.

While bankruptcy could help a person obtain debt relief, it may also result in a hit to that person’s credit score. In some cases, those who file for Chapter 7 bankruptcy could see their scores go down by as much as 200 points. That could limit an individual’s options when it comes to borrowing after a case is resolved. Therefore, individuals might want to look at other debt relief options prior to deciding that bankruptcy is the way to go.

Although such a bankruptcy will likely remain on a person’s credit report for 10 years, there are ways to reduce the damage sooner. For instance, making payments on a car or home could show lenders that a debtor has learned from past mistakes. In some cases, simply making debt payments of any kind in a timely manner can show lenders that a person is able to handle debt after bankruptcy.

Filing for Chapter 7 bankruptcy may allow an individual to reduce or eliminate his or her debt balances in a short period of time. In some cases, this may happen while paying little or nothing to creditors. An attorney may be able to help guide a person through the process of filing as well as describe the benefits of doing so. For instance, creditors generally cannot contact a debtor or proceed with a lawsuit while cases are pending.