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Understanding and surviving Chapter 7 bankruptcy

Bankruptcy is the legal process of relieving debt, which is used by both businesses and consumers in Kentucky to handle unmanageable debts that have accrued. A Chapter 7 filing is referred to as a liquidation bankruptcy. However, it is important to understand how this process works before proceeding, ideally with the support of an experienced attorney.

Possibly the most important part of bankruptcy is what debts can and cannot be discharged by the court. Typically, the court can discharge what is called "unsecured debt," which can include credit cards, medical bills and even personal loans. However, not all debt can be forgiven in this way. Most student loans, alimony payments and most tax debt cannot be discharged.

Declaring bankruptcy is a major financial decision, because it admittedly does influence an individual's credit rating. Generally speaking, a bankruptcy filing stays on one's credit record for up to 10 years. Initially, it may be more difficult to qualify for loans, credit and other forms of lending. However, when all is said and done, escaping from the burden of debt can be well worth any potential fallout. In fact, one's credit can recover more quickly than many think, even leading to the possibility of qualifying for a new mortgage within a few years

Chapter 7 filing is no small task to undertake, as it can be quite a complicated process. This is why Kentucky residents facing the prospect of bankruptcy can benefit strongly from the support of an attorney to lead them through the process. With the help of a seasoned expert, the indebted individual can escape the trap of constant debt and once again achieve financial stability.

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