Steps To Filing Bankruptcy


After the recession and credit crunch of 2007, a huge number of home owners are finding themselves knee deep in debt. Inflation and the gloomy economy have affected the debtors very much and in order to avoid too much debt, many are thinking of opting for bankruptcy, when other debt relief options are not working for them. The number of people who are filing for insolvency has never been so high. If you are one of them, and want to know 'how to file bankruptcy', this article will provide you with the essential details.

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As filing for insolvency was rampant, the New Federal Bankruptcy Laws were introduced to have a check on the number of debtors filing insolvency. So, the norms pertaining to file insolvency have been made a bit stringent. As per the new bankruptcy law, which came into effect from 17th October, 2005, prior to filing for bankruptcy it is mandatory to take a credit counseling session. The credit counselor should be approved by the US Trustee. It is better to consult and take help of a reliable bankruptcy lawyer, to make the process simplified.

There are mainly 2 types of consumer bankruptcies- Chapter 7 and Chapter 13. In case of Chapter 7, filing bankruptcy, Louisville, KY laws need a person to meet the requirements as follows:

1. Passing the Means Test- This is taken to determine whether or not a person has any way to repay his debt. If it is declared that he has no other option to pay his creditors, but, there is enough money to maintain a reasonable living, he can file for Chapter 7.

2. Turning over non-exempt property- The non-exempt properties like, expensive vehicle, second home, jewelry, antique collections, etc, will be turned over to a trustee, who will sell it and pay off a portion of the dues.

In case of Chapter 13, filing bankruptcy, Louisville, KY laws need a person to meet the requirements as follows:

1. The person has to undergo credit counseling for 180 days before filing.

2. His secured debts must not exceed $1,010,650 and unsecured debts must be less than $336,900.

3. He should not fail to appear before the court during the last 180 days.

For filing bankruptcy, Louisville, KY, a person has to first consult with an approved attorney. After that he has to decide on the type of bankruptcy. Then he has to make a detailed list of his debts and assets. After he clears the Means Test, the person can fill out the bankruptcy form and deliver it to the court.


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