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Considering a Louisville Chapter 7 Bankruptcy After Lay-Off

Talk of lay-offs for some 1,100 plant workers in Paducah, KY has had the entire region on edge.

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Now, it appears those jobs may be safe, at least for the next two months, according to company officials.

Our Louisville Chapter 7 bankruptcy lawyers know the entire ordeal has caused many Kentuckians to take a critical look at their finances. The one good thing about this scenario is that the workers may at least have a few months to prepare a cushion of savings and possibly to search for a more stable source of employment.

However, we are fully aware that, many times, circumstances don’t allow for adequate preparation of a financial blow. Following an unexpected lay-off or sudden illness, a Chapter 7 bankruptcy can offer a path to financial recovery. Our experienced bankruptcy lawyers know how trying the ordeal of a job loss can be, and we want to help you make the move that will put you on the best possible financial footing moving forward.

In examining whether you are eligible for a Chapter 7 liquidation bankruptcy, the court will conduct what is called a means test, whereby they will look at a myriad of factors, including your income for the last six months. If your income has been relatively high, you may instead have to file for a Chapter 13 repayment plan.

In cases of a layoff, however, a person usually need only wait a couple of months or so in order to be eligible for a Chapter 7 filing.

We understand that even after the loss of your job, your bills aren’t going to stop coming in. This is why these situations can so quickly spiral into a dire situation, especially if you have little or no savings. People end up putting necessary expenses like gas and groceries on credit cards, and soon, that debt has grown out-of-control.

We recommend prioritize expenses. For example, pare it down to the bare essentials. Cover food and medical expenses first, followed by your mortgage or rent, your utilities, car payments, insurance and keeping up with child support payments.

In doing this, you may realize you are going to have another significant expense coming up, such as a major medical procedure. If this is the case, you may want to hold off on filing until after those debts are incurred, as you want to make sure they too will be eligible for discharge.

You do have to be careful with this, and it’s advisable that you meet with a lawyer before making this call. You could actually be denied protection or discharge of these debts if it’s not done correctly. Bankruptcy law holds that anything over $550 in luxury goods made within three months of filing will be considered fraud, which means you could still be liable for that debt.

In the meantime, we are happy to help you hold off your creditors until you can file.

So while a job loss may initially seem like bad fortune, it can also be an opportunity for you to improve your long-term financial security.


If you need to speak to a Kentucky bankruptcy attorney or Louisville foreclosure defense firm, contact the Schwartz Bankruptcy Law Center at 866-270-4495 for a free and confidential consultation to discuss your rights.

Additional Resources:
Paducah nuclear plant avoids layoffs for now, April 3, 2013, Associated Press
More Blog Entries:
Prospective Louisville Bankruptcy Filers Offered Good News, March 27, 2013, Louisville Bankruptcy Lawyer Blog

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