Many Kentucky residents struggle with their finances. In some cases, with discipline, hard work and a willingness to negotiate with creditors, they can get caught up on their bills. However, there are some cases in which people simply cannot ever get out of the debt. For these consumers, bankruptcy is an option.
Most people are very hesitant to file for bankruptcy, and there is good reason for this. Bankruptcy involves a lot of paperwork and going to court. In a Chapter 7 bankruptcy, a person's non-exempt assets are sold with the proceeds going to creditors. In a Chapter 13 bankruptcy, debts are paid over a period of three to five years under a court-approved plan. In both cases, a person's credit score can take a significant hit.
Still, there are situations in which an individual or family may benefit from bankruptcy. If debts are significantly higher than any assets or income that a person or couple may have, and negotiations with creditors are working, bankruptcy may be the most sensible way to get a fresh start.
Another situation in which bankruptcy makes sense is when one or both breadwinners are unable to work for an extended period of time. This could be due to illness or disability, or simply economic factors that make it impossible to find a good job. In such situations, bankruptcy may allow a family to keep a roof over their heads and food on the table.
Many people who struggle with serious debt combined with unemployment may benefit from speaking with an experienced bankruptcy attorney. There are several eligibility and other requirements associated with filing for personal bankruptcy that the attorney can point out during a discussion of alternative forms of debt relief.