Kentucky Chapter 7 Bankruptcy Attorney
Overwhelmed by debt? A good Kentucky Chapter 7 Bankruptcy Attorney can help you eliminate debt, increase your net worth, and improve a low credit score.
Filing bankruptcy under Chapter 7 can be a simple process with the help of a skilled bankruptcy lawyer. Essentially, you must:
- gather the documents,
- fill out a simple online intake, and
- prepare an accurate petition with your bankruptcy lawyer.
A bankruptcy code for medical bills, credit card debt, personal loans
Even if you need to file a Chapter 13 to stop a foreclosure, you may want to file a Chapter 7 first. By filing a Chapter 7 first, you eliminate unsecured debt you won’t have to repay in Chapter 13. This is a Chapter 20 strategy. Chapter 7 doesn’t cure or manage mortgage arrears or car loans like Chapter 13 bankruptcy can. However, a Chapter 7 bankruptcy filing with a quality law firm will stop collections calls, creditors from garnishing wages, and collection actions, and you become debt-free.
Key Takeaways
- Chapter 7 can eliminate most unsecured debts, giving you a fresh financial start.
- This is one of the more difficult areas of law. An experienced local bankruptcy attorney is crucial for filing for bankruptcy and protecting your assets.
- Prepare thoroughly for your bankruptcy filing by gathering the necessary documents and being honest about your financial situation.
- Understanding bankruptcy law is essential for navigating the Chapter 7 process and ensuring compliance with all legal requirements.
Understanding Chapter 7 Bankruptcy
Chapter 7 is designed to give individuals a clean slate by discharging most unsecured debts, such as credit card debt, medical bills, and personal loans. The automatic stay is one of the most powerful Federal Court Orders that can be issued. It affects creditors and can punish them whether they actually received notice of your bankruptcy filing or not.
It protects the debtor until the end of the case, when a permanent court order, called a discharge, is issued. During this process, the stay protects the poor but honest debtor, including his home, personal property, and bank accounts. If he wishes to keep his home or car, he will continue to pay his car payments and mortgage on time. Debtors who need to catch up on mortgages or car loans normally need Chapter 13 payment plans.
Filing for Chapter 7, the fast and cheaper bankruptcy
If the Debtor has too many assets, he needs to choose the other assets that need to go. Sacrificing non-essential assets ensures essential assets can be kept. Clients find that Chapter 7 stops creditors and debt problems, offering a fresh start to building financial wealth without overwhelming debt. You no longer receive phone calls from debt collectors or worry about bank or wage garnishments.
The best aspect of Chapter 7 is the automatic stay that goes into effect immediately upon filing. This stay halts most collection activities, giving you breathing room to sort out your financial situation without the constant harassment from creditors. Think of it as hitting the pause button on your financial chaos.
However, Chapter 7 does not discharge all debts. Obligations such as alimony, child support, and certain student loans often remain. Chapter 7 offers significant debt relief, wiping out eligible debts within 4-5 months.
How to Choose the Right Chapter 7 Bankruptcy Attorney
Selecting the right law firm is important. Experience is important, and a bankruptcy lawyer should have filed 5,000 to 10,000 petitions and cases or more. You only learn this area of law by the lawyer personally preparing petitions and going to court thousands of times. If a paralegal prepared the petition the attorney doesn’t know you intimately. If he only shows up at 341 meetings, he doesn’t gain the knowledge. You have to battle in court thousands of times to sharpen these skills.
Attorneys are often forced to choose family or their career, just like a brain surgeon. To keep assets, you need enough income to make secured payments or have an affordable payment plan. Some accounting and tax skills are essential, and an attorney should at least be licensed before the tax court or have at least sat for the CPA exam. Nick is licensed before the US tax court with license #51 in Washington DC. He ran an accounting division for an oil company and sat for the CPA exam but chose to be a lawyer.
Hiring a Chapter 7 Bankruptcy Attorney
The cost of hiring a Chapter 7 bankruptcy attorney can vary depending on the amount of assets and debts and the complexity of the case. Nationwide attorneys normally charge a flat legal fee ranging from $1,000 to $3,000 for consumer cases. These fees are disclosed to the court and approved to ensure they are reasonable, protecting clients from unreasonable charges. The moment you file, the attorney cannot collect for pre-petition work, just like your creditors can’t collect. Therefore, the fees must be paid before filing.
The filing fee for a Chapter 7 bankruptcy in 2025 is $338. This is a $245 filing fee, a $78 administrative fee, and a $15 Trustee charge. The required credit counseling course runs from $0 to $50; the poor can get a waiver.
Steps in Filing Chapter 7 Bankruptcy with a Bankruptcy Lawyer
Filing bankruptcy involves several steps, but a skilled attorney can streamline the process. The first step is gathering necessary documents, such as paycheck stubs, bank statements, tax returns, and current investment and retirement account statements. Once we have these documents and a completed intake, we can prepare the petition with you within 2-3 hours. Emergency petitions are possible, but it is more expensive, and you are not allowing us the time to catch errors.
The instant we submit your bankruptcy petition, an automatic stay goes into effect, halting almost all collection activities against you. About a month after filing, you’ll attend a meeting of creditors. The Trustee will appear, creditors may appear, and there is no judge. You and your bankruptcy lawyer will answer questions about your financial situation and bankruptcy schedules.
Benefits of Hiring a Chapter 7 Bankruptcy Attorney
Hiring a Chapter 7 bankruptcy attorney alleviates the stress associated with the bankruptcy process and offers numerous benefits. These attorneys manage the intricate details of your case, allowing you to focus on rebuilding your financial health. Their expertise ensures all necessary requirements are met, protecting your assets and maximizing exemptions.
Experienced bankruptcy lawyers are adept at navigating the complexities of bankruptcy courts, ensuring that your case is handled efficiently and effectively. Experienced bankruptcy lawyers are skilled in safeguarding clients’ belongings from being seized during the bankruptcy process. They can negotiate with lenders to find solutions that protect your home if you’re behind on mortgage payments. Protecting your assets in bankruptcy is best achieved by hiring a local bankruptcy lawyer familiar with state-specific laws and regulations.
Bankruptcy attorneys play a crucial role in navigating complex bankruptcy laws, ensuring compliance, and optimizing the bankruptcy court process. They can relieve financial stress by providing both short-term and long-term debt relief options, helping you achieve a fresh start.
Qualify for Chapter 7 Bankruptcy
To qualify for filing Chapter 7, individuals must pass a means test that first compares their income to the state median income. However, if your income does not allow a reasonable Chapter 13 plan payment after deducting reasonable and necessary expenses, you can still pass the second part of the means test. About 95% of debtors qualify for Chapter 7.
You can get only one discharge every 8 years, measured from the date of filing for Chapter 7 in the first case to the second filing for Chapter 7.
People with high business debt and veterans can be exempt from taking the means test. If you fail to qualify for Chapter 7, your attorney may recommend a Chapter 13 bankruptcy with a small plan payment.
What to Expect During Your Initial Consultation
Your initial consultation with a law firm is typically free and lasts around 60 minutes. We inquire about your assets, debts, and income to understand your financial situation and determine if bankruptcy is a viable option. During your consultation, the lawyer will explain how bankruptcy law applies to your specific situation and what steps you need to take next. We also determine whether we can work with a client to achieve the results they need or desire.
Having a rough estimate of your asset values, debts, and income helps provide a more accurate assessment. Bringing copies of required documents, such as paycheck stubs, bank statements, and tax returns, can significantly aid the free consultation. You should know what your home and car trade-in value is worth, and a credit report helps to locate and list most of the debts. This preparation ensures that your attorney has all the information needed to provide the best advice for your situation.
Preparing for Your Bankruptcy Filing
Specific documentation is required to ensure proper processing of the Chapter 7 bankruptcy petition. You’ll need to collect the prior six months’ worth of paycheck stubs and bank statements, the last two years of tax returns, and mortgage and retirement account statements.
In addition to paycheck stubs and bank statements, you should gather documentation related to other unsecured debt, such as credit card balances and medical bills.
After filing, we provide this documentation, such as paycheck stubs, tax returns, and a course completion certificate for debtor education, to the Trustee. The bankruptcy Trustee may request further documents related to your financial situation, especially if the petition is unclear.
Non-Dischargeable Debts
While Chapter 7 bankruptcy can eliminate many types of debt, there are some debts that are non-dischargeable. These debts include:
- Income Tax debts: The IRS and state taxes are discharged if they were timely and properly filed and are over 3 years old. Property and trust taxes are not discharged.
- Student loans: Student loans are generally non-dischargeable unless you prove that paying them would cause undue hardship.
- Child support and alimony: These debts are non-dischargeable, they are not delayed or affected by the filing.
- Debts incurred through fraud or deceit: If you incurred debt through fraudulent means, such as writing bad checks or making false statements on a credit application, you may not be able to discharge those debts in bankruptcy. If they fail to file an objection, they are often discharged
Keeping Your Home in Chapter 7 Bankruptcy
One of the most common concerns people have when filing for Chapter 7 bankruptcy is whether they will be able to keep their home. The good news is that, in most cases, you can keep your home in Chapter 7 bankruptcy as long as the equity is less than the state exemption (27,900 per person on the deed in Kentucky). If you have too many assets or too much in assets, filing for bankruptcy may require you to spend down property, which is non-essential. If you have not been keeping up a home, spending nonexempt assets to pay for a new roof or furnace does not increase the value and equity of a home.
In Chapter 7 bankruptcy, the Trustee can sell assets to pay off creditors if you have too much equity, but this is rare. Bankruptcy exemptions allow you to protect a reasonable amount of equity in your home from creditors. A car loan or mortgage can still be repossessed or foreclosed if the payments, taxes, or insurance are not maintained.
Life After Chapter 7 Bankruptcy
Following the approval of a bankruptcy petition, most unsecured debt is eliminated. The entire Chapter 7 bankruptcy process generally takes just a few months to complete, providing a stop to the phone calls. Filing for Chapter 7 or 13 requires a budget. Pay your debts on time after the discharge, and your credit will improve. Not paying on time means your credit will suffer for not paying. Creating a comprehensive budget is the initial step in rebuilding your financial health after Chapter 13 or 7.
Discharged debts should no longer be reported as defaults. Instead, they should be reported as closed accounts. This alone immediately improves most debtors’ credit. Paying on time after the discharge will also help.
Common Mistakes to Avoid When Filing Chapter 7 Bankruptcy
The bargain you make is that you must disclose all your assets and debts and use your best efforts to repay. Hiding assets causes problems.
- It can cause you to lose your debt discharge.
- Non disclosure or a fraudulent transfer also means you lose the right to exempt and keep an asset.
Another common mistake is charging up debt shortly before filing. That debt may or may not survive bankruptcy. Making payments to preferred creditors just before filing can be reversed by the bankruptcy Trustee.
If you want to qualify for Chapter 7, Call Nick Thompson, the bankruptcy lawyer.
If you need to qualify for Chapter 7, call Nick at 503-635-0905. A Chapter 13 bankruptcy may not be your best option. If you qualify for Chapter 7, it may be easier and cheaper to stop creditors and obtain a fresh start.
