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The ins and outs of filing for Chapter 7 bankruptcy

The prospect of filing for bankruptcy can be destabilizing for the average American citizen. This is partly because, here in Kentucky and elsewhere in the nation, people are not properly educated on what is involved in the process of Chapter 7 bankruptcy filing. The truth is, bankruptcy can represent a fresh start to an individual or business struggling with mounting debt, but it is important to have the right information going into the process.

The first criterion for a successful bankruptcy filing is determining what kind of filing is appropriate. For many people, a Chapter 13 filing, which consolidates debts under a repayment plan, is the preferred option, but for those dealing with extreme debt, Chapter 7 might be the best bet. No matter what kind of filing is selected, the debtor must attend credit counseling before filing.

Once it is clear that Chapter 7 is the way to go, a variety of documents must be provided to the court. This includes schedules of assets, liabilities, income, extenditure and a statement of financial affairs among others. Tax returns will also be required by the court, which will assign a trustee to the debtor once the bankruptcy is filed. This trustee will work with the debtor to determine which debts could be discharged and which must be paid back through asset liquidation.

The process of filing for Chapter 7 bankruptcy can be complicated, even for those well-versed in the process. This is why Kentucky residents can benefit so strongly from the support of an experienced bankruptcy attorney who can guide the debtor through the process effectively. This is the fastest and most efficient way to help the debtor get back on the path to financial stability.

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