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Turning tax refund into Chapter 7 bankruptcy relief

The mortgage needs to be paid, the car loan is due, credit cards are past due and medical bills are adding up. Then, there are the everyday expenses such as food and gas. All of this takes money; money which many Kentucky residents find harder and harder to come by. Chapter 7 bankruptcy is often the solution to the problem; however, even this solution requires some money to be able to implement.

Spring is one of the prime seasons for filing bankruptcy. The reason for this is that along with spring showers come spring's income tax return refunds. For those who have paid in more than is owed throughout the year, this money is returned in the form of a refund check. Rather than using this money to pay off bills, some individuals find it more beneficial to use this money to have these bills discharged by means of Chapter 7 bankruptcy.

In deciding whether it is more beneficial to continue struggling and paying on debt or to file bankruptcy, the individual needs to look at the overall picture. How long will it take to pay off the debt? Is the debt greater than 50% of the individual's income? Depending on the answers to these questions, bankruptcy may be the appropriate choice.

Many Kentucky residents struggle with debt. Having the funds to pay debt along with everyday living expenses just doesn't always seem possible. For many, the income tax return appears to be the solution to the short term financial dilemma. Yet, by using this money to file for Chapter 7 bankruptcy, the individual may have discovered a long term solution to financial problems.

Source: sfgate.com, "When a tax refund means bankruptcy", March 30, 2017

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