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Bankruptcy court bars woman from discharging future debts

Many people who file for bankruptcy in Kentucky hope to get some or all of their unpaid debts discharged. Debtors can file for bankruptcy and have arrears discharged multiple times in their life. However, there are rare cases when a court will bar future discharges of debt for people who have misused the bankruptcy system.

A woman in Kansas who wanted to dismiss her bankruptcy case will no longer be eligible for a discharge. On Dec. 9, the U.S. Bankruptcy Court for the District of Kansas found that the woman had mishandled a $25,000 employment law settlement while she was going through the Chapter 13 bankruptcy process. Though the woman's bankruptcy plan did not allow her to dispose of assets without the court's permission, the woman spent $25,000 without court approval. Afterwards, the woman filed a motion to dismiss her bankruptcy case.

When the Kansas woman sought to dismiss her Chapter 13 bankruptcy case, she was in her fifth bankruptcy filing. The court also found that the woman had communicated plans to file for bankruptcy for a sixth time. While the court could not deny the woman's petition to dismiss her bankruptcy case, the court did invoke its power to bar future discharges of debt.

Most people do not plan to file for bankruptcy multiple times. After going through the bankruptcy process once, a former debtor may look forward to enjoying a fresh financial start without any new credit problems. An attorney may be able to help a person who is overwhelmed by debt to determine whether bankruptcy is the best solution to their debt problems.

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