What Happens When You File for Bankruptcy? | Paducah, KY

What Happens When You File for Bankruptcy in Paducah, KY?

Get your life back to normal when you know what happens after filing for bankruptcy 

Are you struggling with debt and feeling overwhelmed by the financial strain? Bankruptcy is a big decision to make, but if you are dealing with unmanageable debt, filing for bankruptcy may be your best option. 

Although bankruptcy can feel intimidating, it has helped millions of Americans escape crushing debts and rebuild their financial futures. 

This article will discuss what happens when you file for bankruptcy in Paducah, KY, so you can know what to expect should you decide to move forward. 

 

What is Bankruptcy?

Bankruptcy is a legal process that helps individuals and businesses with severe financial issues find relief from their debt. Understanding the many types of bankruptcies is crucial since each offers different relief depending on the individual or business needs.  

Bankruptcy can help struggling debtors postpone collection or even eliminate certain types of debt, allowing them to make a fresh start. Knowing when bankruptcy might be appropriate is essential, and consulting with an experienced bankruptcy lawyer to discuss your situation is wise. Do not let yourself become overwhelmed by financial challenges – bankruptcy could be the relief you need. 

 

Who Declares Bankruptcy?

Bankruptcy is burdensome for anyone to face, yet it happens more often than one would think. All types of people from different classes and walks of life declare bankruptcy, including entrepreneurs and small business owners, corporate executives, wage earners, and retirees. 

Many declare bankruptcy due to mismanagement of funds or expenses too large to cover with their income or sources of liquid capital. Other contributors include medical bills, investment losses, foreclosure on real property, fraud or theft by an employer or partner, gambling losses, or multiple life changes such as divorce or job loss. 

Regardless of why someone declares bankruptcy, unfortunately, it can take its toll on a person’s financial well-being forever.

 

Will I Lose My Property When I File For a Bankruptcy? 

When you think of bankruptcy, it is natural to worry about what might happen to your property – will it all be gone after filing? The answer, thankfully, is no. You can keep your property when you file for bankruptcy in most cases. 

Depending on the type of bankruptcy, you may be able to use an exemption to protect specific possessions from liquidation. If your property falls within a particular value range, you can typically keep it during and after the process. 

Bankruptcy does not have to mean the complete loss of your possessions. With proper legal advice, you can often retain the things most important to you in the filing process.

 

What Will Happen To My Credit If I File for Bankruptcy? 

When someone declares bankruptcy, it can have a lasting impact on their credit score. Credit scores consider all your financial missteps and determine your overall financial trustworthiness

Bankruptcy is usually considered one of the most severe forms of financial misbehavior, which will likely cause a tremendous decline in your credit score. Depending on the type of bankruptcy filed, there could be even more long-term implications for someone’s credit score. For instance, Chapter 7 bankruptcy can stay on a person’s record for up to 10 years. 

That makes it particularly difficult for individuals to try to improve their overall finances by taking out loans or applying for mortgages down the line when their credit rating may still reflect bankruptcy. It is critical to consult with a bankruptcy lawyer if you are considering filing for bankruptcy, so you fully understand what the consequences could be for your credit.

 

Will Bankruptcy Affect My Employment?

When considering filing for bankruptcy, it is necessary to understand how this can impact your job or future employment. Depending on the type of bankruptcy you enter into, it may be reported on background checks, indicating to potential employers that you have had financial difficulties. 

Declaring bankruptcy can also limit your access to specific professional licenses depending on the field you are entering. Furthermore, many jobs require security clearances, and bankruptcy may lead to additional questions and delays in obtaining clearance. 

While bankruptcy could affect your job or future employment opportunities, some benefits come with filing, such as taking control of your finances and alleviating debt.

If you are worried about your employment, our knowledgeable bankruptcy attorneys in Paducah, KY, are here to provide you with comprehensive information about bankruptcy. 

 

Chapter 7 Bankruptcy

Under a Chapter 7 bankruptcy, the court assigns a trustee to evaluate a person’s assets and determine if any are exempt from being sold to benefit creditors. A filer can typically retain their primary residence, car, and some personal items such as clothing, furniture, and appliances. 

Any proceeds or remaining value of a non-exempt property is distributed among creditors. However, certain exceptions exist for certain debts, such as student loans or child support payments, that would be unaffected by the bankruptcy filing process. 

In addition, individuals may have to surrender equity gained from real estate beyond the designated exemption limits to satisfy the terms of the bankruptcy agreement. The situation can be complex and varies based on your specific state regulations and assets, so it is best to consult with a bankruptcy attorney before taking action.

 

Chapter 13

When considering a Chapter 13 bankruptcy, one of the most commonly asked questions is whether your property will be at risk. It can be disconcerting to contemplate, but the simple answer is no. Chapter 13 bankruptcy allows you to restructure your debts and keep your property so long as you can make payments according to the approved plan. 

Under this form of bankruptcy, if any of your creditors hold a valid lien against your property, you would need to continue making payments on that debt as agreed in the repayment plan. If you satisfy all of the terms in the plan, all remaining discharged debts will be settled, and you will no longer owe them. 

So when considering Chapter 13 bankruptcy, you can keep your property safe with some effort and determination.

 

Planning to File for Bankruptcy? Call our Kentucky Bankruptcy Attorneys Now! 

Filing for bankruptcy is challenging, and you must have accurate knowledge and guidance. At Farmer & Wright PLLC, our skilled bankruptcy lawyers are here to help. We ensure to guide you and provide you with the information you need.

We know that bankruptcy is a complicated and lengthy process. If you have questions like what happens when you file for bankruptcy in Paducah, KY, you can always count on our team. Contact us today for more information! We also offer legal services on personal injury and disability claims

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