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Options for overcoming debt

As many Kentucky residents may know, getting out of debt might be complex, and choosing the right venue is important. In some cases, making the decision may be offset by family issues that leave the debtor with few choices.

In one case, a 23-year-old Colorado woman returned from duty with the U.S. Army to find herself in debt. The woman's mother had rented a series of apartments in her daughter's name over a five-year period, leaving the daughter liable for the rent. This caused the young woman to have problems getting a car loan or a cellphone. Complicating this, her motor vehicle was destroyed in a car crash. She lacked gap insurance and was left paying the monthly payments even though the car was totaled. Due to mounting debt, the woman had few choices. She had the option of going to the authorities and telling them about her mother's fraudulent behavior. Another option was to declare bankruptcy.

Debtors are required to do pre-bankruptcy counseling before filing. This offers consumers information about options, including settling with creditors or a plan for debt management. Having knowledge of the different forms of bankruptcy also helps. One of the two principal forms of personal bankruptcy is Chapter 7. Under this chapter, the non-exempt property of a debtor is liquidated with the proceeds being used to repay existing creditors. Most remaining unsecured debt is discharged. Chapter 13 bankruptcy is designed for people who have a reliable source of income. They enter into a debt repayment plan that lasts for a period of between three and five years.

People who are struggling to meet their financial obligations may appreciate the assistance of a bankruptcy attorney. During a discussion of the available forms of debt relief, the attorney can explain the types of obligations that are not able to be discharged and can outline the eligibility and other requirements under each chapter.

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