Filing for personal bankruptcy can come with many benefits for Kentucky consumers who are looking to get a handle on their debt. However, it is important to spend time prior to filing learning the process of doing so and what it entails. For instance, debtors are required to disclose all of their debts to the bankruptcy court. They should also be disclosed to the bankruptcy trustee as well as to the debtor’s attorney.
There is a lot of paperwork that must be completed and filed as part of the bankruptcy process. Debtors must take a credit counseling course prior to doing so, and they must show proof that they completed it. Failure to do so could result in a case being dismissed or otherwise delayed. Debtors must also be sure to fully list their debts and assets as part of a bankruptcy filing.
Ideally, individuals looking to file will do so quickly as it allows them to begin rebuilding their credit. Filing for bankruptcy is something that debtors may need to disclose for the rest of their lives. This is true even though the bankruptcy will fall off of their credit report in seven or 10 years. In many cases, a person will need to disclose a bankruptcy when applying for a job or a loan.
In a Chapter 7 case, assets are liquidated with the money raised being used to pay off creditors. State and federal law may exempt certain assets from being liquidated, and if the amount raised is less than what a debtor owes, the balance will likely be discharged. An attorney can explain the possible benefits of bankruptcy such as obtaining at least a temporary stay of creditor contact.