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Chapter 13 bankruptcy -- advantages and disadvantages

Like most things, each form of bankruptcy has its advantages and disadvantages. A careful analysis of these, along with guidance from one's legal advisor, can help in determining the best choice for a particular situation. Many Kentucky residents find that filing for Chapter 13 bankruptcy is the appropriate option.

First of all, as long as the individual has the financial resources and can make the designated payments under a court-approved bankruptcy payment plan, the individual can actually keep all property. Although the debts on these items are not discharged, they can be lowered as a part of the repayment plan. This can apply to both exempt and non-exempt property.

Perhaps the greatest advantage of Chapter 13 bankruptcy is that the individual's home is typically protected from foreclosure proceedings as long as the individual adheres to the terms of the repayment plan. Additionally, creditors are prevented from calling and/or attempting to collect debts once the bankruptcy has been filed.  Plus, even though there are some debts that cannot be discharged, Chapter 13 bankruptcy can afford the individual an extended time period under which to pay these debts.

There are numerous advantages to Chapter 13 bankruptcy, but the individual does need to keep in mind that a repayment plan will need to be created. This repayment plan will last for 3-5 years and will require the use of the individual's disposable income during this time period. The decision as to which form of bankruptcy to file is unique to each Kentucky resident. One's legal counsel can be invaluable in determining the appropriate choice.

Source: kentuckybankruptcy.info, "Kentucky Chapter 7 Bankruptcy or Kentucky Chapter 13 Bankruptcy?", Accessed on April 17, 2017

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