Many different types of debts can be discharged in a Kentucky bankruptcy. Almost every type of unsecured debt such as personal loans, medical bills and credit card balances can be addressed in both Chapter 7 and Chapter 13 proceedings. Secured debts such as mortgages and auto loans are also likely to be discharged in a Chapter 13 case. A few types of debts, such as back taxes, fines and child support, cannot be discharged.

Student loan debt is also unlikely to be discharged in a bankruptcy case. Instead, a borrower will probably need to switch to an income-based repayment plan. While both Chapter 7 and Chapter 13 bankruptcies can help a person get rid of debt, these methods are not necessarily created equal. Chapter 7 proceedings involve liquidating nonexempt assets and using the money to pay creditors. Liquidation bankruptcies are generally only available to those who have a low income. It may also not be the best choice for those with property.

In a Chapter 13 case, debtors generally retain property if they keep up with their plan payments. Furthermore, debtors who have cosigners may want to consider a Chapter 13 proceeding. This is because creditors cannot contact cosigners while a Chapter 13 case is ongoing.

Prior to filing for bankruptcy, it might be a good idea to have the help of an attorney. Legal counsel could provide more insight into why a Chapter 13 bankruptcy may meet the needs of an individual debtor. Benefits of this type of bankruptcy include the ability repay creditors over three or five years. This may help a person get caught up on past due bills in an affordable manner.