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Chapter 7 bankruptcy and counseling requirements

Perhaps one of the most difficult decisions that someone facing financial difficulty will make is the decision to seek help. This help can take on many forms. It may involve taking on even more debt in an attempt to stay financially afloat in hopes of the financial picture changing, or it may involve filing for Chapter 7 bankruptcy within the federal court system in Kentucky.

For some facing financial difficulty, the situation is most likely a short-term one while one is in between employment opportunities. In this case, the idea of incurring more debt to stay afloat may be justified. However, in most cases, this strategy is not a financially prudent one.

Other individuals find that filing bankruptcy is in their best interest. However, once this decision is made, it does take time to go through the process. Regardless of where one lives, the first step in filing for bankruptcy is to participate in pre-bankruptcy counseling. This is a required step, and the counseling must take place with an agency approved within the judicial district where the bankruptcy will be filed. Once this counseling is complete, a certificate must be obtained as proof of completion.

Then, after the bankruptcy is filed, the individual must also complete a debtor education program. This course is designed to assist the individual with money management skills, budgeting and credit management. Like with the pre-bankruptcy counseling, this course must be conducted by an approved agency, and a certificate of completion must be retained as proof.

For many Kentucky residents, filing for Chapter 7 bankruptcy is the appropriate decision. As with many financial decisions, there is not a quick and easy solution. The bankruptcy process is designed to assist the individual in overcoming the current financial problems and hopefully avoiding financial problems in the future. Experienced legal counsel can help guide one through the process.

Source:, "Filing for Bankruptcy: What to Know", Accessed on Feb.11, 2017

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