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Exemptions and Chapter 7 bankruptcy

Filing for bankruptcy could be the best financial decision that a Kentucky resident makes. Although the decision often brings with it a certain degree of uncertainty and emotional concerns, it provides the individual with the financial relief needed to start over financially. For many, Chapter 7 bankruptcy is the solution to what has become an overwhelming financial dilemma.

Under Chapter 7 bankruptcy, the majority -- and, in some cases, all -- of the individual's debts are discharged. This means that they go away and repayment is no longer required. However, along with this type of bankruptcy, the individual may be required to liquidate certain assets to help offset some of these debts.

One of the areas of uncertainty for many individuals revolves around exactly what property they will give up and what property they will be able to keep. In Kentucky, the homestead exemption helps to protect the family home from being taken during the bankruptcy process. However, if there is a mortgage on the home and it is not being reaffirmed in the process, the exemption may not apply. There are also exemptions for vehicles up to a certain dollar amount, unless used as collateral to secure a loan. Other exemptions cover personal property such as clothing, jewelry, burial plots and more.

Chapter 7 bankruptcy can provide much needed financial relief for a Kentucky resident. While it is possible that some assets will be used to offset outstanding debt, the goal is to help the individual be able to start over financially and live a productive life. An experienced bankruptcy attorney can help guide one through the necessary steps.

Source: legalconsumer.com, "Kentucky Bankruptcy Exemption Laws", Accessed on June 12, 2017

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