As bankruptcy filings continue to rise in Louisville, Kentucky, it’s crucial for individuals and businesses to understand the costs associated with the process.
In 2023, the fee for filing for bankruptcy as a single person is set to increase to $1,400, while the fee for couples will be $1,600.
While these fees may seem high, it’s important to remember that filing for bankruptcy on taxes can provide a fresh start financially and help alleviate overwhelming debt.
However, that’s not the end of the story. Here, we will explore the role taxes and exemptions play in bankruptcy and give you the information you need to understand the process.
So let’s get started.
Cost of Bankruptcy In Louisville, KY
We understand that the cost of living in Louisville can be tough and that many of our clients need help to keep up with their financial obligations.
Filing for bankruptcy can seem like a daunting and expensive process, but it’s important to know that the cost of filing for bankruptcy in Louisville is set to increase in 2023.
As we mentioned earlier, the fee for a single person will increase to $1,400, while a couple will see a fee of $1,600.
As a result, you will receive the best bankruptcy service and will be able to get a fresh financial start after bankruptcy.
Mandatory Courses Cost in 2023
In addition to the fees associated with filing for bankruptcy, individuals in Louisville, Kentucky, must also budget for the cost of mandatory courses.
These courses, also known as pre-filing and pre-discharge education, are required by the court as part of the bankruptcy process.
Additionally, the courses cover topics such as budgeting, credit counselling, and financial management.
In 2023, the average cost of these courses in Louisville is expected to range from $10 to $50 per course. It’s important to note that there may be additional costs for individuals who are required to take additional courses, such as a debtor education course, as part of their bankruptcy case.
Moreover, it’s also worth noting that some providers may offer discounts or sliding fee scales for low-income individuals. Before enrolling in a course, it is always advisable to check with the provider.
In addition, keep in mind that these costs may seem small, but they can add up, and you should budget for them when filing for bankruptcy.
Role of Taxes and Exemptions in Bankruptcy
According to our previous discussion, taxes and exemptions play a crucial role in the bankruptcy process.
In a Chapter 13 case, debtors are expected to use any excess income, including tax refunds, to pay off their debt.
However, in a Chapter 7 case, debtors can exempt their tax refund using the wildcard exemption, which allows them to keep up to $14,450 if they do not have any real property to use the $28,900 real estate exemption on.
Moreover, when there is no real estate equity, the unused portion of the real estate exemption becomes a wild card exemption of half, which means debtors can keep more of their assets.
What Should Debtors Do?
One important aspect to consider when filing for bankruptcy in Louisville is the debtor’s duty to do their best to repay debt.
However, this is particularly relevant in Chapter 13 bankruptcy, where the debtor is required to pay their excess income to the court.
For example, if a debtor receives a tax refund during their Chapter 13 case, they are expected to pay that refund over to the trustee. It’s worth noting that this is a rule specific to the Western District of Kentucky, and other districts like Eastern Kentucky and Southern Indiana may not have the exact requirement.
Summing Up
Filing for bankruptcy in Louisville, Kentucky, can come with a variety of costs, including the fee to file, mandatory courses, and additional costs depending on the specific circumstances of the case.
It’s important for individuals and businesses to be aware of these costs and budget accordingly. However, it’s worth noting that filing for bankruptcy can provide a fresh start financially and help alleviate overwhelming debt.
If you’re considering filing for bankruptcy in Louisville, it’s essential to consult with an experienced attorney to fully understand the process and the costs involved.
In my 24 years of experience as a bankruptcy attorney, I am well qualified to guide you through the bankruptcy process and assist you in making the best possible financial decisions. If you’re ready to take the first step towards financial freedom, don’t hesitate to book a meeting with me today.
