How to File Bankruptcy in Louisville Kentucky
Here in 60 seconds is how to file bankruptcy in Louisville Kentucky. The most important steps in the process you have to take are explained here.
Why we supply documentation to the Bankruptcy court.
Bankruptcy Judges and Trustees will trust you but they verify the facts in your petition from the documents. Bankruptcy Trustees are not going to take your word for it you are poor, have no substantial assets and need help. The documentation you provide proves you didn’t give away a house to your mother just before filing and you earned less than 200,000 last year. Trustees look over your checking account for any expense over 600 dollars and your tax return to prove income, and expenses.
You have to take 2 classes
You have to take Credit Counseling before you file and Debtor Education after your file. If you don’t take the credit counseling class you can’t file. If you don’t take the Debtor Education class you don’t get the final discharge. It costs $335 in filing fees and another 300 in attorney fees to reopen the case later and file it after they close the case.
Accurately file bankruptcy in Louisville Kentucky.
The Trustee and the judge have a job to do. If you make it hard for them, it will be hard for you. The Chapter 7 Trustee makes money two ways. First, he makes 70 dollars from every case he looks over. He can do that in 5 minutes with a good petition. If you file a sloppy petition it may take hours or days.
A Trustee would like to process 10 debtors in court every half hour. He will suspect fraud and investigate your case if you leave out property, debts or have a sloppy petition. It will cause problems every time.
Saving property in Bankruptcy
The second way a Trustee makes money is he occasionally finds property he can sell. He earns a commission of about 25%. This is based on a sliding scale. You have exemptions which allow you to keep a reasonable amount of equity in a car, home, household goods, and tools. It is rare to lose property in bankruptcy.
Losing property most often happens when the bank fails to properly file a mortgage or car lien. If you have a home mortgage or car loan you are supposed to Reaffirm (pay payments) Redeem (purchase the car or boat) or Surrender the property. Redeeming property is an important option if you have negative equity. If you have a bad car deal consider buying a car before you file, surrendering the car or redeeming it.
Chapter 7 or 13
A Chapter 13 can do everything a Chapter 7 can and more. But don’t file a Chapter 13 unless you need the extra tools for special debts. A Chapter 13 takes 3-5 years to complete and costs more than a Chapter 7. Clients who shop for a cheap attorney will often be offered filing as a Chapter 13. This makes it more likely a poor client’s case fails. It is more expensive in the long run and more profitable for these firms who scam the poor and minorities claiming to help them.
A Chapter 13 does have special tools which allow you to manage a foreclosure, tax debts and student loans better. You can catch up the payments on a home or car in a Chapter 13 over 5 years. A Chapter 7 only lasts 4 months so it will only temporarily delay a foreclosure and avoid tax problems. A Chapter 7 will not help catch up a mortgage foreclosure. You can often strip a second mortgage in a Chapter 13 if the second mortgage is unsecured and has no equity. In a Chapter 13 you can lower the interest rate on personal property loans.
When to use a Chapter 13
A Chapter 13 often values a car and only repays the secured portion in a Cramdown. There are many tools a Chapter 13 has, which a Chapter 7 just doesn’t have. A Chapter 13 may be required if you filed a Chapter 7 within the last 8 years because you can only file one Chapter 7 every 8 years and get a discharge. If you earn too much income you may be forced to repay at least part of your debts in a Chapter 13. Chapter 7 it may not be the best choice if you have certain debts that need the Chapter 13 tools for homeowners and persons with long term medical problems, tax or student loan collections.
Managing Non Dischargeable Debts
Non Dischargeable debts (student loans and IRS taxes less than 3 years old) survive a Chapter 7 bankruptcy and go right back to collections as soon as a Chapter 7 is over. You can pay down these debts inside a Chapter 13 while paying little or nothing to unsecured creditors. While the bankruptcy is in progress a temporary court order called the stay stops collections. After the case ends the discharge replaces the stay order.
Non priority Taxes and private student loans may be paid little or nothing. This often makes even the IRS and private student loans give up collecting. The stay does not apply to child support and alimony. But domestic support can be repaid in a Chapter 13, at the expense of credit card and other debts.
Finishing your Bankruptcy
There is probably just one hearing your will go to called the 341/confirmation hearing. At that hearing you must bring your photo id and social security card. If you file in Louisville, be sure you go to the Federal Courthouse at 601 W Broadway on the 5th floor. Every year one or two people show up where you pay traffic tickets in state court or even worse at the Trustee’s office. These hearings only last about 5 minutes with questions about how much your car or home is worth. Look at the page which lists the standard questions.
If you have taken the second class there should be little or nothing left after the 341 hearing to get your discharge for a Chapter 7 case. In a Chapter 13 you will need to make the payments on time, turn in an annual budget and turnover your tax returns annually until you get the discharge. A Chapter 13 can be adjusted if you have problems later. If you become short term disabled, the payments may be temporarily suspended or plan may be modified to make a Chapter 13 affordable.
A life after bankruptcy
You deserve a better life after bankruptcy. The problems should be over. But if you don’t get a 725 credit score or you don’t know how to budget after the discharge, you will go back to pain and suffering. If you repeat bad habits you get the same results. Look at our pages on how to get a 725 or better fico score. Sign up for the free bankruptcy version of financial peace university by Dave Ramsey on our website.
Our bankruptcy manual is about 60 pages plus the appendix. It takes about 3 hours to read. The average person will save $8,000 – $10,000 just by learning and reading how to file bankruptcy in Louisville Kentucky. Bankruptcy is where you work with a qualified experienced attorney to get the benefits. You get more out of it if you understand how it works. If you have questions or need to file come see us when you need to file bankruptcy in Louisville Kentucky