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Is Bankruptcy Right for You?

Financial troubles may happen to anyone, from individuals wearing a blue collar to the man or woman in the corner office. And despite stereotypes, these troubles aren’t always the result of irresponsible spending or a lack of financial awareness. As the saying goes, bad things sometimes happen to good people. Whether it is because of excessive medical bills, a layoff, a divorce, or sometimes simply unforeseen expenses, at times the budget doesn’t balance. When this is the case, one option to explore is bankruptcy. The decision to file for bankruptcy is a serious one. It will impact your future in both positive and negative ways, so it is important to also consider other potential options for debt relief. In many cases, bankruptcy is the best option: a chance for a fresh financial start and, more importantly, hope for getting the finances of your business or your personal life back under control.

Let Bunch & Brock Help

If you are considering bankruptcy as an option, contact Bunch & Brock, Attorneys at Law, in Lexington, Kentucky, as soon as possible. With more than 35 years of experience, we can assist you in putting your finances back on track. Although lawyers at our firm primarily focus on helping clients through the bankruptcy process, they also offer sound advice concerning other alternatives. We will evaluate all of your options and help you find what’s best for you and your specific circumstances. If you have questions or would like to set up an appointment,  contact us online or call us at 859.254.5522.

What is Bankruptcy?

Bankruptcy is a legal tool that allows individuals or businesses to find relief from excessive debt. By filing a petition, individuals or consumers may ask the court for relief in the form of discharge of specific debts or a plan to restructure debt in order to begin anew.

Types of Bankruptcy

There are several different types of bankruptcy that serve different purposes, depending on the situation of the business or individual. Bunch * Brock will help you decide whether bankruptcy is the right choice for you and which type could help you achieve your financial goals.

  • Chapter 7 Bankruptcy: This is most common form of bankruptcy. It allows some, if not all, debts to be discharged. A discharge means that the debts no longer exist and no longer have to be paid. During a Chapter 7 bankruptcy, non-exempt assets are sold and the proceeds used to pay off creditors. The remainder of the debt, if the assets do not pay them off completely, are generally dissolved.
  • Chapter 13 Bankruptcy: Chapter 13 is best for individuals or businesses that have a steady income, temporary financial problems, and a desire to repay some of the debt. In this type of bankruptcy, debt may be negotiated, and a plan is submitted to the court allowing the individual or business to restructure the debt. If the court approves the plan and it is successfully completed, the debts covered by the plan are discharged.
  • Chapter 12 Bankruptcy: This is one of the rarer forms of bankruptcy, but it is occasionally utilized in Kentucky. It is available only to family farmers. There are special qualification requirements for family farmers relating to the income, assets and debts of those engaged in farming.

Common Bankruptcy Demographics

Far from the stereotype of the individual or business that files for bankruptcy, studies and statistics show the reality is quite different. The majority of filings are done by middle-aged individuals with a high school education and an income of more than $30,000.

Common Causes of Bankruptcy

The causes of bankruptcy are numerous, but some are more common than others. Medical expenses, for example, are responsible for roughly 60 percent of bankruptcies, although the number that has gone down since the introduction of the Affordable Care Act. Other causes of bankruptcy include:

  • Loss of Income
  • Employment Loss
  • Debt
  • Divorce or Separation
  • Unexpected Expenses
  • Student Loans.

Credit Counseling Services/Other Options

Bankruptcy is not the only possible solution to financial straits. There are several out there, including credit counseling. Credit counseling services work with your creditors to negotiate a reduced-interest payment plan. For a fixed period of time, you will make a set monthly payment to the service. They then distribute your payments to your creditors.

Before choosing a credit counseling service, do plenty of research. Make certain the service you decide to use has a reputable history; unfortunately, some unscrupulous companies take advantage of people experiencing financial distress.

If you are considering filing bankruptcy, contact Bunch & Brock, Attorneys at Law in Lexington, Ky. as soon as possible. With more than 35 years of experience., Bunch & Brock has the knowledge, resources and experience to assist you with your legal needs. If you have legal questions or would like to set up an appointment, contact us online or call us today at 859.254.5522

Lexington, KY Attorney Matt Bunch

Attorney Matthew Bunch

Matt handles complicated bankruptcies and debt restructuring in Chapters 11 and 13 for both individuals and companies. He has also negotiated with multiple creditors on behalf of his clients to avoid bankruptcy. Matt is the firm’s lead litigator and handles contract disputes, certain personal injury claims and general litigation. [ attorney bio ]


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