Bankruptcy is a legal process by which a person is able to resolve his debts within a reasonable time, through the division of assets amongst his creditors. After full repayment he gets an opportunity to start afresh. A person can opt for filing bankruptcy as an individual, on behalf of his business or other type of organization. There are two main types of consumer insolvency. To know which type would be the best, a person should consult with an experienced bankruptcy attorney. Louisville, KY is a place where one can find many reputed law firms.
To file for insolvency, a person has to consult a bankruptcy attorney. Louisville, KY lawyers ask for the detailed documents of bank statements, credit bills, debt notices, loan papers, and tax returns. The attorney analyzes the borrower’s financial condition and advises him to choose the most suitable type of bankruptcy. The two main objectives of bankruptcy are:
1. To pay the creditors as much as possible from bankruptcy estate, without burdening the debtor too much.
2. To give the debtor a chance of starting afresh.
The 2 most common types of bankruptcy are mentioned below:
1.Chapter 7: A person can file for this type of bankruptcy if he has very low income and wants to liquidate his assets, for paying off his debts. All his non-exempt properties will be sold and liquidated. A trustee will be appointed to supervise the property. He also has to surrender some of his assets to the trustee, and the latter will sell those to pay the creditors. However, depending on the Kentucky law a borrower may be allowed to retain some of his personal properties.
2.Chapter 13: A person can file for this type if his income is more than the state’s median income and he wants to retain his property.
The debtor will be allowed to opt for a debt management program, so that he can repay debts within 3 to 5 years. A trustee, appointed by the court will collect the payments and distribute that amongst the creditors. The debtor will have to pay a charge to the trustee.
If you are thinking of declaring yourself insolvent and need a bankruptcy attorney, Louisville KY, Spalding & Spalding Law Office is the best in getting out of debt problems. Log on to their website Spaldingbankruptcyattorneyslouisville.com for more information.