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Chapter 7 bankruptcy basics

Medical bills, credit card payments, car notes and mortgage payments can all take a toll on an individual. Many times, these expenses overtake the Kentucky consumer's life and makes one feel as if he or she is simply working to pay bills. However, rather than drowning in this sea of debt, over a quarter of a million Americans found a life raft in filing for bankruptcy, with Chapter 7 bankruptcy being the most popular.

Once one decides that Chapter 7 bankruptcy is the appropriate option, the next step is to file the necessary paperwork. When this happens, the judge will name a trustee to be responsible for liquidating the appropriate assets and paying creditors as funds are available. When this happens, an automatic stay goes into effect, and creditors are stopped from being able to attempt any further contact for collection efforts.

While this may sound like a traumatic process, it really is not. Many items are exempt from liquidation, and other items can be reaffirmed and not included in the bankruptcy process. This often allows the individual to retain possession of the home, car and other items needed to work and maintain a comfortable lifestyle.

Many Kentucky residents fear that filing for Chapter 7 bankruptcy will leave them without the resources and credit that they will need going forward. However, while bankruptcy does impact one's credit score, many find that, soon after filing, they begin to receive mortgage, auto loan and credit card offers. An experienced attorney can help one decide if Chapter 7 bankruptcy is the appropriate choice.

Source: mensfitness.com, "5 reasons filing for bankruptcy could save you from life-crushing debt", Damon Trent, April 24, 2017

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