Lexington, KY Chapter 7 Lawyer
Times are tough all over. If you’re in a really tight financial position, you may need a Lexington, KY, Chapter 7 lawyer. When prices are rising and your income is not keeping pace, it is easy to rack up credit card balances and other debts. There are solutions, and you don’t have to go it alone.
Are you, your family or small business in dire straits? Does your debt load seem overwhelming? Is your paycheck spent before you receive it? If so, your next best step is to talk to a Chapter 7 attorney and explore your options. Relief through a Chapter 7 bankruptcy filing may be a viable option and a way to make a fresh start.
For more than 30 years, the Chapter 7 lawyers at Bunch & Brock Law Firm in Lexington, Kentucky, have helped clients who are overcome by financial problems. While bankruptcy can seem discouraging, it can also be the first step on a much brighter journey. Attorneys at our firm take a personalized approach to both you and your situation, helping to determine whether filing for Chapter 7 is the right choice. For an initial consultation about your situation, call us at (859) 254-5522. It’s time to start planning for your future.
What is Chapter 7 Bankruptcy?
Chapter 7 is the most common form of bankruptcy protection for individuals. Also utilized by small-business owners, Chapter 7 is known as “liquidation bankruptcy.” When you file for Chapter 7, a portion of your property may be liquidated – or sold — to pay down your debt. Following the sale of your property (and the use of those proceeds to pay secured debt), most or all of your unsecured debts will be discharged.
You may be allowed to retain possession of any property classified as “exempt” under bankruptcy laws; these assets can include clothing, cars, equipment used for work (like tools) and household furnishings. The purpose of a Chapter 7 bankruptcy is to reposition a person for a fresh start by lifting the burden of debts. The thought is that with a fresh beginning, a person can get on their feet and once again be on solid financial footing. If you do not own a great deal of property, your possessions may all be exempt, qualifying you for a “no asset” case.
Am I Eligible for Chapter 7?
Not everyone in Kentucky is eligible for Chapter 7 bankruptcy protection. Your income and debt will be subjected to something called a “means test” to determine whether you qualify. Chapter 7 is generally for people whose total income is below the median income in Kentucky; but if your income is higher, you may still qualify if your basic monthly expenses are exceptionally high.
If you are not eligible for Chapter 7, filing for Chapter 13 bankruptcy may be an option. Chapter 13 “reorganization” bankruptcy helps you repay a portion of your debt and allows you to keep most of your assets, including your home.
How Long Will a Chapter 7 Bankruptcy Stay on My Credit Record?
Chapter 7 bankruptcy will stay on your credit record for 10 years. This means that getting a loan or credit card at a reasonable rate of interest during this period will be very difficult, because your credit report will show a bankruptcy to potential lenders. However, this may be a small price to pay for the chance to begin again financially.
Chapter 13 bankruptcy stays on a person’s credit record for 7 years after the completion of the repayment plan.
Get Help from a Lexington, Kentucky Chapter 7 Attorney
To discuss your options for debt relief, contact Bunch & Brock today.
Will Filing for Chapter 7 Bankruptcy Erase My Debts?
Our bankruptcy lawyers for Chapter 7 often hear this question. Filing for bankruptcy does not discharge all debt. It can eliminate credit card debt, medical bills and unsecured loans, though. You will remain responsible for other debts, including child support, spousal support obligations, student loans and most unpaid taxes. If you have questions about how bankruptcy would affect your situation specifically, feel free to give us a call at (859) 254-552 for an initial conversation.
Why Is Chapter 7 Called a “Fresh Start” Bankruptcy?
It is easy to get caught in a whirlpool of debt that seems to increase every month, leaving you overwhelmed and underwater. Chapter 7 is often referred to as a “fresh start” because the process puts an end to fees, penalties and bounced checks, while halting creditor harassment and pending lawsuits. Chapter 7 releases unpaid debt and allows you a chance to regroup and start over, hopefully wiser from past mistakes and ready for a successful new beginning.
How Does Liquidation Work?
When you file for Chapter 7 bankruptcy, a Trustee is assigned to your case. The Trustee will determine which of your assets are exempt from bankruptcy liquidation and which can be sold to pay down your debts. Nonexempt property will then be collected and sold, with the proceeds distributed to unsecured creditors. Once the money is gone, any remaining debts are permanently discharged.
In many cases, liquidation does not have a significant impact. Federal and state exemptions protect most of your property from the liquidation process and you may end up losing very little (if anything). Unless you own some very valuable non-essential items like a boat or luxury vehicles that can be sold and the proceeds distributed to creditors, you may not have to worry about losing the majority of your household possessions.
Tip from a Lexington, Kentucky Chapter 7 Lawyer: What Not to Do Before Bankruptcy
Don’t Wait too Long
If you think you might be heading for bankruptcy, it’s best to avoid delaying the inevitable. Many people make the mistake of waiting too long, until many of their assets and resources are depleted. You can often protect the property you have, including your house, car and retirement funds, through bankruptcy assistance. Rather than hiding from creditors or worrying incessantly, reach out to an experienced Chapter 7 attorney and take the first steps toward a new tomorrow. Call us at (859) 254-5522.
Don’t File for Divorce Until After the Proceeding
You should also avoid filing for divorce, if possible, before you enter bankruptcy proceedings. To prevent unnecessary complications and losses, it is best to wait until bankruptcy is complete before moving forward with a marital dissolution. If you think about it, this makes sense. Juggling bankruptcy proceedings and divorce proceedings at the same time would not only be highly stressful for everyone involved but also creates significant confusion over joint assets and shared debts. If it’s emotionally possible and both parties in a marriage are willing, it is best to complete the bankruptcy before filing for divorce.
Don’t Take on New Debt
If you think you might file for bankruptcy within a few months, don’t make the mistake of taking on new debt for non-necessities. Excessive charges and new loans may be looked upon as fraudulent in nature by the court, and you may lose the bankruptcy protection option. Similarly, do not attempt to transfer or hide assets pre-bankruptcy, because this can lead to a dismissal and even criminal charges. Courts look more favorably on bankruptcy petitioners who appear honest, sincere and willing to change their spending behaviors going forward.
How Much Does It Cost to Hire a Chapter 7 Attorney?
Various law firms have different fee structures, but generally attorney’s and filing fees for Chapter 7 bankruptcies can range from $1,500 to $3,000. In many cases, a Chapter 7 attorney will request a “retainer” up front, which is a portion of the total cost, and then the remainder of the cost is paid off during a specified period of time. To speak confidentially to a Chapter 7 attorney at Bunch & Brock and get more detailed information about the cost of filing for bankruptcy, call us at (859) 254-552.
Will I Be Able to Keep My Pension and Social Security After Bankruptcy?
Generally, your Social Security is safe during a Chapter 7 bankruptcy, so that concern can be set aside and should not be a reason for avoiding a fresh start. (The only caveat to this is: If you have Social Security benefits in a checking or savings account prior to filing for bankruptcy, or have received a lump sum payment, you may put these funds at risk if you have commingled them with non-Social Security money.) For the most part, 401(k)s, IRAs, defined-benefit pensions, and other qualified retirement accounts are protected in Chapter 7 bankruptcy. However, for some accounts the protected amount may be capped.
Contact a Lexington, Kentucky Chapter 7 Lawyer at Bunch & Brock
The longer you wait to explore your bankruptcy options, the more stress and worry you will endure. In many cases, the attorneys at Bunch & Brock can offer immediate relief and renewed optimism for a successful future. Contact Bunch & Brock today at (859) 254-5522 to learn about your options for a fresh financial start. Our Lexington, Kentucky Chapter 7 lawyers are here to help you move forward with your life.