Filing Chapter 7 13 Bankruptcy Louisville Kentucky

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Bankruptcy Law

The new Chapter 7 and 13 Bankruptcy manual has been updated for step by step planning. 

The top positive changes are:

• You will now be able to repay debts for far less in a Chapter 13.  The old law required most plans to repay 70% and many Chapter 13 cases are now repaying less than 10% to unsecured creditors. 

• If your second mortgage has no equity it may be eliminated in a Chapter 13. 

• If your lender did not properly record the mortgage of car lien you may have an unsecured loan and a free auto.

• You can now keep far more property after the law changes. In Kentucky you can now keep 4 times more real property. 

• Child Support owed to the government can be repaid in a Chapter 13 for far less that what is owed.  To a parent it must be repaid in full and is unaffected by Bankruptcy.

The top negative changes are.  

1. You will need more documents to prove that you qualify see the Bankruptcy Checklist.

   Mandatory Credit Counseling In order to file a Chapter 7 or 13 you must receive about 90 minutes of credit counseling by an approved non profit credit counseling agency.

   Mandatory Debtor Education.  You have to take classes after you file too. 

   If your prior 6 month income averages less than the average for your family size you may file a Chapter 7.   You may still qualify however.  If after deduction for secured expenses and required expenses you cant pay a plan you may still file a Chapter 7.   If you fail both parts of the means test you must file a Chapter 13 you cannot file a Chapter 7.

   If you filed a Chapter 7 you cannot file another Chapter 7 for 8 years, you cannot file a 13 for 4 years. If you filed a Chapter 13 you cannot file another 13 for 2.

   Finance companies used to take your furniture as security under the new law we cannot destroy these liens as easily. 

   Both government and now non government student loans are dischargeable

   Income taxes over 3 years old will be more difficult to discharge

   It becomes fraud to charge over $750 within 90 day the old rule was $1000 in 60 cash advances or luxury goods purchases make this only $500

   Chapter 7 Redemptions (buying your car from the bank) were for the wholesale value now it is the retail value

   Chapter 13’s have to pay the car company back the full amount of the loan or offer a take it or leave it plan to pay less.    Chapter 13 plans if you earn over the average must now be for 5 years and must pay all the left over income.  Plus you must attend a hearing as least 10 days prior to discharge and prove you have no pending debts for fraud or felony charges. 

   Child Support must be paid and up to date or the case will be dismissed or converted. But a debt for Child Support to the government may be paid in a 13 as long as it pays all of the disposable income for 5 years. To a parent it must be paid in full.  

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