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Kentucky residents in prison may not be able to file bankruptcy

Bankruptcy can enable someone who is deep in debt to either have their debt discharged or begin a repayment plan. However, not everyone is eligible for this process, and it appears that people in prison are among those who may not be allowed to file. A recent case involved a man who was an incarcerated felon and was denied the ability to file for Chapter 13 bankruptcy by a bankruptcy court.

Although the parents of the individual in question said that they were willing to make payments to the plan required for individuals who file for Chapter 13 bankruptcy, the court determined that eligibility for this type of bankruptcy filing depends on the income of the person doing the filing. Since the person who was filing had an income of only about $14 per month from the Illinois Department of Corrections, it was not sufficient to create a plan.

The court determined that the promised payments from the individual's parents were purely gratuitous, and they did not qualify as income obtained by a person filing for bankruptcy. As a result, the court denied the person's case, although the individual may still be able to file for Chapter 7 bankruptcy.

There are a number of benefits available to people who file for Chapter 13. These fillings can enable someone to prevent or stop a foreclosure or the repossession of other secured property, such as vehicles. However, to be able to file, individuals must meet a variety of criteria, which a lawyer could explain to them. Additionally, people will need to be able to complete a successful repayment plan that normally takes between three and five years to complete.

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