Kentucky Bankruptcy Lawyers Blog

Our Louisville bankruptcy attorneys have become increasingly familiar with the oxymoron, "Too broke to go bankrupt."

For those contemplating filing for a Chapter 7 bankruptcy in Louisville (the most common form), generally, the upfront cost is about $1,500. That's the nationwide average, according to the National Bureau of Economic Research.

And the truth is, when you're drowning in debt, who has an extra $1,500 lying around?

What that's going to mean is anywhere between 200,000 to 1 million people who would like to file for bankruptcy this year, but can't, according to a study conducted by three midwestern universities. Those social scientists were originally looking at the number of bankruptcy fillings that shot up after people received their tax returns. However in the course of their research, they found that a large number of people just simply couldn't be afforded.

Now, our Louisville bankruptcy attorneys believe it's important to note that there are steps that can be taken to help you achieve your financial goals, and Chapter 7 bankruptcy is an excellent way to help you regain your financial footing. Consulting with an experienced bankruptcy attorney is the first step to determining what all your options are - so don't just assume that because you don't have $1,500 cash in hand you can't do it. Call us, and we'll be happy to see how we can help.

Bankruptcy costs actually weren't always so high. They went up in 2005 (just before the housing bubble burst) with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act. The idea was to make it so fewer people would file for bankruptcy by upping the requirements of the filling process. That's meant more paperwork and more fees.

To that end, the measure was somewhat successful, but the framers of the act likely didn't anticipate the large number of people who would need bankruptcy help in the wake of The Great Recession. So while the rate of bankruptcies have fallen just a bit since the law was passed (1.3 percent last year, down from 1.4 percent in 2004), the average income of those filing has gone up - a sign of an ill economy.

Some of the added fees include pre-bankruptcy credit counseling, which is required, as well as a pre-discharge debtor education class. Both of these will run, on average, about $85.

There are a lot of reasons why someone might file for Chapter 7 bankruptcy, including a foreclosure, job loss or medical emergency. Some experts, though, are concerned that the price tag of a bankruptcy is going to mean those who are the most vulnerable will be left with fewer options.

But again, we don't want people feeling intimidated about the process. That's why we really encourage folks to contact us, even if they think they may not be afford bankruptcy and especially if they find the new processes thoroughly confusing. Trying to go it alone is generally a mistake, especially given the new requirements. If you make an error, your chances of being allowed to re-file are significantly reduced.

Bankruptcy is a fresh start, not an added burden.

Continue reading "Louisville Bankruptcy Watch: Too Broke for Bankruptcy?" »

Most people would do just about anything for a sick relative: Hold a fundraiser, help pay the bills or make some sacrifices to lend a hand. But some families mired in financial problems pretty much have to go it alone. Especially when it comes to paying for medical care,

Many medical procedures are extremely costly these days, and there seems to be no limit on what hospitals and specialists try to bill for. When it costs $25 for one aspirin, you know we're in trouble. But there is help in the form of filing for bankruptcy in Louisville.

Our Louisville bankruptcy lawyers recognize the great power that our nation's bankruptcy laws have because they allow everyday, average citizens to get help if they have financial problems. And one of the biggest causes of financial problems in the United States is healthcare costs.

Even when people have routine out-patient surgeries, many insurance companies end up paying tens of thousands of dollars on behalf of their policyholders. When a person is diagnosed with a form of cancer or has to get treatment for another complex or potentially fatal illness, it's going to require specialists, many hospital visits, exploratory procedures, expensive medications and other help to try to stop the illness.

Even people who get in car accidents -- a daily occurrence -- can be saddled with amazingly large bills. From broken bones to internal injuries, these conditions must be addressed quickly. That, too, can be costly.

So what happens when insurance stops covering? The hospital starts going after the patient. They send letters, make calls, have collection agencies make calls, and conduct other collections practices. Yes, they offered services, but after catastrophic events, people need time to recover.

Take for example one family in Texas. The Austin American-Statesmen recently profiled a family with three kids who are now $25,000 in debt with medical bills because one of their three children has spina bifida and one kidney. She may soon require spinal surgery and their mother has had heart surgery recently, adding to their medical bills.

The community has reached out, providing presents for Christmas, repairing the family's van that was in need of repair and household repairs that were causing problems. The family is determined to pay off the medical bills, but with additional medical care potentially on the horizon, it could be a rocky road.

Having a major illness "affects everybody's life," the mother said. "It's very isolating for the whole family."

Indeed, and this is where Louisville bankruptcy can help. Rather than forcing every family member to suffer, using these consumer-based laws can really help. Filing for bankruptcy in Louisville can get rid of medical bills.

Imagine having that freedom. Instead of waiting for the calls to stop coming in, a family can let bankruptcy clear their debt and get them in the right direction. There are ways out of the debt and while bankruptcy can't stop the medical issue, it can help stop the debt from adding to the stress of the situation.

Continue reading "Major Medical Bills, Even With Insurance, Can Require Louisville Bankruptcy to Cover" »

Times certainly could be better. There has been some good news in recent weeks, as manufacturers are again hiring in the United States, including in Louisville, where GM has recently shifted some operations, The New York Times reports.

But for many others -- more than 9 percent to be exact -- finding a job hasn't gotten any easier. For some families, a potential solution is to consider Louisville bankruptcy.

Our Louisville bankruptcy lawyers know that job loss is a terrible thing. It hits us in our pride and can cause emotional problems. More practically, it brings financial instability.

Some families can't make payments on bills, they may miss a house payment, credit cards become much more of an everyday tool, and they may even opt to take out a loan. In the meantime, lenders are contacting these families by phone, e-mail and other means. They've probably hired collection agencies, attempting to get any kind of payment possible.

The good news according to Business Journal is that unemployment rates dropped in November in 351 of 372 metropolitan areas, including Louisville, according to recently released statistics. In October, the unemployment rate was 9.8 percent and a month later it was 8.8 percent.

Another report states that Kentucky's unemployment rate overall dipped from 9.6 percent to 9.4 percent from October to November. Both of these are encouraging pieces of news.

The New York Times wrote a piece that looks at manufacturing jobs and the fact that while more American businesses are hiring again, they are bringing in people at much lower rates than in years past, even those represented by powerful unions. The guarantee of work these days has become more important than fighting for big raises or large benefits packages.

The article hits on the fact that General Electric's factory in Louisville is now being used to create new water heaters, a process that previously was being done in China.

These are all encouraging bits of news for our state and local economy, but the bottom line is that more than 9 percent of people are still without work. At 9.4 percent unemployment, that means nearly 408,000 Kentucky residents are out of work, according to 2010 census numbers. So, where does that leave most people?

The bottom line is that filing for bankruptcy in Louisville can be an appealing prospect for some people who are out of work. The process is designed to help people get rid of debt that is making life difficult. Rather than continue struggling with minimum payments and constant reminders of the situation you're in, bankruptcy can solve those issues.

After completing the process, those who file for bankruptcy typically get all or most of their debt cleared away. That means credit card debt, medical bills, other types of loans and other debt can be gone and the process of restoring credit scores and savings accounts can begin.

Continue reading "Although Louisville Jobs Increase, Unemployment is High and Bankruptcy Could Help" »

It's certainly a buyer's market in the real estate world, but what does that mean for those who already have a home and are being hampered by a possible foreclosure?

Proof of the problem can be seen on foreclosure tracking website RealtyTrac, which shows that much of Louisville is in a high foreclosure rate right now. Ten of the 24 ZIP codes are in an area where as few as 1 in every 228 housing units is in foreclosure in Louisville.

Yet, our Louisville bankruptcy lawyers have also noted that at the same time that many residents are dealing with a foreclosure, The Courier-Journal is reporting that the Kentucky Housing Corp. is offering its lowest mortgage rates in 40 years.

The state-chartered housing finance agency is offering borrowers with certain income limits, credit scores and other criteria 30-year, fixed-rate mortgages at 3.375 percent on the low end. The agency provides rates for first-time buyers and those with moderate incomes, but consumers must work with agency-approved lenders.

This all sounds great if you're looking to cash in on the depressed real estate market and get a great deal. But what if you already bought your dream home and ended up with a bad interest rate because it was a seller's market?

Flash forward a few years and now you may have hit a tough stretch financially with someone in your family losing a job, getting hit hard with a major medical bill or having to worry about the rising costs of day-to-day bills? For those with a variable mortgage rate that suddenly has spiked, leading to higher payments, this could be an especially troubling time.

Losing your home to foreclosure is never a good option. In fact, it can be devastating to children who could have their world turned upside down by having to move. If your credit score has taken a hit because of missed payments and other financial troubles, a foreclosure can make matters worse.

So, why not try to keep your house? One clear way is through a Louisville bankruptcy. Filing for bankruptcy immediately stops foreclosure in its tracks. Whether the family is receiving its first missed payment notice or the house is scheduled to be auctioned off at the courthouse, filing for bankruptcy can stop foreclosure.

What filing does is halt any attempts creditors have made to get money or possessions from you, including wage garnishments and foreclosure. This then allows your Louisville bankruptcy lawyer to use the laws on the books to help you get out of your debt.

Bankruptcy laws are supposed to help the consumer get out of debt after other methods haven't worked. These judges are trained and expected to provide help for everyday people who have gotten stung by high interest rates and a house with an underwater mortgage, meaning it is worth less than what the homeowners is paying on it. It's a bad situation that can be made better with bankruptcy laws that were created to help.

Continue reading "Louisville Bankruptcy Can Help Stop the Rise of Foreclosures" »

As a result of the housing bubble and the poor economy, home foreclosures in Kentucky and Indiana, as well as elsewhere across the country, have become an epidemic. Suffering a foreclosure can have a devastating impact, not only from the obvious hardship of losing one's home, but from the extremely negative impact it can have on one's credit.

Like most negative information, such as repossessions and judgments, foreclosures stay on one's credit report for 7 years. From a credit standpoint, however, a foreclosure is one of the hardest things from which to recover. For someone trying to finance the purchase of another home, a foreclosure is the worst piece of information that can appear on the credit report. In order for someone to qualify for a conventional home mortgage loan who has had a foreclosure on his record, the foreclosure must be more than 7 years old. What makes matters worse is that the 7 years runs from the date the foreclosure sale is complete, that is the date the new purchaser takes title to the property. Because the foreclosure process can drag out for months if not years before a new owner takes title, it can often take much longer than 7 years from the start of a foreclosure before one can obtain a loan.

Filing a Chapter 7 Bankruptcy, on the other hand, actually speeds up the time frame for obtaining new credit. Although the bankruptcy filing itself will stay on one's credit report for up to 7 years, the rules for obtaining a mortgage loan are much more lenient for someone filing Chapter 7 Bankruptcy than they re for someone with a foreclosure on his record. For example, a conventional mortgage loan can be obtained 4 years after a bankruptcy discharge and an FHA or VA loan can be obtained 2 years after the discharge.

Whether or not you are trying to save your home, Bankruptcy may be a better alternative than letting it go into foreclosure.

Consult with a Louisville or Southern Indiana bankruptcy attorney before it is too late to save your credit.

Redemption is a bankruptcy process that is often overlooked and under utilized by many Louisville and Southern Indiana bankruptcy bankruptcy filers. Redemption is the process of paying a lump sum to a creditor in a Chapter 7 Bankruptcy in exchange for a release of its lien on some personal property, such as a car or household items. The money paid to the creditor must equal the fair market value of the property that serves as collateral for the loan.

Here is how the process works. Suppose you own a car with that is worth $2,000 but the loan balance on the car is $6,000. If you Reaffirm the note on the car, you will be paying $6,000 plus interest for a car that is only worth $2,000. Would you buy a $2,000 car for $6,000? I doubt it. But that is in effect what you are doing if you reaffirm. The redemption option, on the other hand, would allow you to pay only what the car is worth. But the kicker is that you have to come up with the money in a lump sum. There are, however, companies that will loan you money to pay off the redemption amount, in effect giving you a new loan with a smaller balance.

The way it works is that the debtor files a motion to redeem the property for 2,000. The creditor then has an opportunity to object. The only basis for objecting would be if the creditor believes that the property is worth more than what the debtor is offering to pay. Most of the time the creditor will not object because it would rather have the money than take the car back and have to sell it. So if the creditor does not object, the court will enter an order allowing the debtor to redeem for 2,000 and the debtor then has 10 days to pay the money. Upon payment of the money, the debtor gets a free and clear title to the car.

This process is also very useful where the debtor has put up items of personal property as collateral with very little re-sale value, but that have value to the debtor. In many instances, the debtor may be able to redeem those items for very nominal amounts because the creditor does not want to have to repossess them.

In order to understand your rights, it is important to consult with an experienced Louisville or Southern Indiana Bankruptcy Attorney.

Two Georgia lawmakers have proposed bills that would allow homeowners to take out money from their retirement accounts, penalty-free, to pay for mortgages, The Atlanta Journal-Constitution reports.

While the lawmakers believe this could help cut into the country's real estate and foreclosure mess, this would simply ruin a person's finances in order to save their house, which has likely taken a large hit in value.

Louisville bankruptcy lawyers would advise a consumer struggling with foreclosure to set up an appointment today and consider the benefits of bankruptcy in Louisville rather than spill their retirement into a house saddled with an upside down mortgage.

Louisville has been hit hard with foreclosures, as foreclosure tracking company Realtytrac reports that on average 1 in 259 housing units is in foreclosure citywide. This puts most of the city in a "high" foreclosure rate, while only three zip codes are in a "low" foreclosure rate. Those areas see 1 in 1,627 housing units in foreclosure.

This city certainly isn't an exception to the housing woes that have hurt our country. But that is no reason for a person to toss away their life savings for a house. Many people who want to keep their house can go through bankruptcy and come through the process in much better financial shape. Under Chapter 13 bankruptcy in Louisville, consumers can set up payment plans over a 3 to 5 year period to payback most of their debt and still keep their houses.

Under this new law, homeowners would have the option of taking money from their retirement portfolios and rather than pay a 10-percent penalty on what they withdraw, they could take it out without penalty to make a housing payment.

The bill sponsors -- Sen. Johnny Isakson and Rep. Tom Graves, both from Georgia -- believe that the bills would allow for a recovery in the real estate market while keeping people in their homes.

Louisville bankruptcy lawyers hope that Americans are smarter than that. Why would a person ruin their future savings -- which are meant to provide food, shelter and medical care -- for a house that has plummeted in value? People would be much wiser to keep their savings, declare bankruptcy. Whether or not they decide to keep the home.

Isakson said he believes that the only way the economy will recover is when the real estate market bounces back. And he thinks that the bill he has proposed will contribute to that by reducing foreclosures and stabilizing home values.

Graves said the bill allows people who have been responsible enough to save in the past, but who have lost their jobs, to not be punished by the tax laws and still pay their mortgages. The tax law now, he said, punishes those who want to put their retirement savings into their home.

Retirement funds are designed to help those who get to an age where they can't work anymore. And if they can't work, they can't earn money. Having a house to live in is critical, but there are alternate housing options available. Retirement savings is required to sustain a bright future even if the present is bleak.

Continue reading "Proposed Law Would Open Retirement Savings To Pay Mortgages, But Louisville Bankruptcy Is Wiser" »

Deficiency judgments are on the rise, as banks continue to look for ways to make up the millions of dollars lost through the glut of foreclosures nationwide, The Wall Street Journal is reporting.

A deficiency judgment is when the bank takes a home through foreclosure and then sells it at auction for less than the loan amount and goes after the original homeowner for the difference. In many cases, this can mean a borrower is saddled with a judgment of $100,000 or more, depending on market value.

Luckily, there is a solution and it's filing for bankruptcy in Louisville. If a person is hit with a big deficiency judgment, they likely can't pay it off if their house just went into foreclosure. Therefore, consulting with an experienced Louisville bankruptcy lawyer can help consumers get out from under not only that debt, but other forms of debt, such as credit card bills, medical bills and other money owed. In other cases, it can protect a consumer from dealing with a bank or a deficiency judgment in the future -- once they have gotten back on their feet financially.

As The Wall Street Journal states, banks are making that more and more difficult these days. As they struggle to generate revenue after the downturn in the real estate market, banks are now going after homeowners with a vengeance.

The news article highlights the case of a man who lost his job and stopped making payments on a vacation house he owned in Florida. After the foreclosure went through last year, he thought it was over.Then he got a call telling him a deficiency judgment had gone through and he owes $193,000 to the bank. The man said he never considered the bank would go after him, but he said he'll be contacting a bankruptcy lawyer to seek protection.

There are 41 states, including Kentucky, that allow deficiency judgments. In Kentucky and Indiana, judgments are allowed after the homeowner fails to answer a foreclosure lawsuit within 20 days after they are served in-hand or by certified mail with the paperwork. Once a deficiency judgment is awarded, the mortgage lender can seize assets like bank accounts to satisfy the balance of the debt and garnish up to 25% of your wages. Only a Chapter 7 or Chapter 13 Bankruptcy filing can stop that from happening.

While lenders don't say which homeowners they target for deficiency judgments, analysts believe they are going after homeowners they believe have the funds to make the payments, but choose not to. Many people have considered a strategic default, meaning they stop making payments because of a decline in value.

Many states, however, allow lenders up to 20 years to go after a homeowner for a deficiency judgment, which gives banks a lot of time.

Attorneys who handle foreclosure defense told the newspaper they have seen a drastic increase in judgments as banks have been urged by shareholders to try to make back the money that has been lost. There is also a secondary market for debt, as investors attempt to get the judgments so they can go after borrowers through debt collection agencies or bankruptcy court.

Continue reading "Kentucky Deficiency Judgments on the Rise, But Louisville Bankruptcy Stops Them" »

Senior citizens are the fastest growing demographic asking for charitable food handouts, according to an article in The Republic. For 5 million older adults, nutritional meals are either inaccessible or unaffordable.

"It comes as a surprise to most people that seniors are going hungry," said Dr. James Ziliak, director of the University of Kentucky's Center for Poverty Research. "People think we conquered hunger with the War on Poverty back in the 1960s."

When you look at the retirement savings of the Baby Boomers (or lack thereof), it becomes clear that growing numbers of senior citizens are having trouble making ends meet. According to the Survey of Consumer Finances, the average household has just $148,000 saved for retirement. Or about three years of modest living expenses.

Louisville bankruptcy attorneys continue to see those in retirement struggle with credit card debt, bad real estate debt and medical bills. Once living on a fixed income, they often have nowhere to hide and nowhere to turn when hit with unexpected expenses.

Tragically, too many turn to more credit card debt, reverse mortgages or outright scams.

In many cases, filing for Chapter 7 bankruptcy in Kentucky can free retirees from the confines of insurmountable debt. With this type of filing, most debts are forgiven. Retirement accounts are protected and filers can often keep their home and vehicle if they choose to do so.

Most retirees have worked hard all their life. They've raised families. And now it's their time. We are committed to helping seniors find the best solutions to their financial situations. Whether it's dealing with foreclosure or the high cost of medical care. We believe no one deserves to live out their Golden Years under the threat of collection agencies and the stress that comes with unmanageable debt.

Because of these financial strains, the number of bankruptcy filings involving those over the age of 65 has doubled in the last 20 years, according to the National Consumer Bankruptcy Project.

Often, the highest barrier for older residents is the negative stigma they associate with bankruptcy. But the truth of the matter is that bankruptcy is one of the strongest consumer protection laws on the books. As living expenses continue to grow, too many seniors are left getting by on the same fixed income year after year. Banks and Wall Street have been taken care of -- it's our senior citizens who are left to struggle.

As a result, AARP now estimates the percentage of older Americans dealing with food insecurity has climbed from 4.7 percent in 2006 to more than 10 percent in 2008.

Only about 4 percent of the U.S. population was over the age of 65 in 1900. Today, about 12 percent of the population -- or 35 million adults -- are senior citizens. As Baby Boomers begin to retire over the next decade, that number will grow to 17 percent by 2020.

This is the generation that always did for everyone else. Who kept themselves to themselves. And who kept problems close to the vest. But if financial problems are ruining your retirement, we encourage you to seek professional advice.

Continue reading "Louisville Bankruptcy Watch: Struggling Seniors Should Seek Solutions" »

On television, credit cards seem so convenient and consequence-free -- just use your card and get "points, "rewards" or "perks."

But what these commercials don't tell the consumer is that along with the perks, rewards or points system are hidden fees and high interest rates that can escalate on a sliding scale through no fault of the consumer. Built-in rate hikes can add as much as 25 percent to the purchase price without the cardholder knowing it.

It's lending practices like these that make credit card companies so much money. It's why they can afford lavish marketing budgets and high-profile actors and celebrities trying to sell consumers on their cards. But it's also why people throughout the state and nation are struggling with credit card debt. These practices have driven many to seek shelter in Louisville bankruptcy laws.

Louisville bankruptcy lawyers have helped countless consumers who are unemployed, downtrodden and looking for answers and help. Bankruptcy laws were created with the consumer in mind. They allow people to discharge mounds of debt that are hounding them and give them a brighter future without creditors calling constantly.

A recent column looks at the nine myths of credit card usage and how to bust them:

Good credit requires a credit card
A credit score isn't built on how much a credit card is used alone. Credit histories take into consideration a lot of spending behaviors, including whether loans are repaid on time.

Credit card debt should be carried
Some people believe this and borrow well beyond their means, which can cause major problems. When fees and interest builds after falling behind on payments, people may not be able to pay it, driving down their credit score.

Paying the minimum will pay off debt
Sure, after you've ended up paying many times more for your purchases than the sticker price. At the rate that the interest is multiplied and carried out against consumers, it can take years and sometimes decades for everything to be paid off. Thousands of dollars in debt can turn into tens of thousands or hundreds of thousands of dollars after interest and fees are applied.

Creditors can't repossess items bought with an unsecured card
A default on a credit card can be devastating to your credit score, whether you keep the defaulted possessions or not

Credit card accounts that are inactive should be closed
Not necessarily. If you believe you can't resist the urge to use an active line of credit, then maybe. But if you can keep a line of credit open with a zero balance, it shows you don't rush to use the credit you have.

It's OK to go over the credit limit as long as it's paid before the due date
This can hurt your credit score, cost you fees and increase that card's interest rate.

Even if I overuse my credit card, it will die with me
Not true. Credit card companies can go after survivors and the assets you leave behind to get their money back. Your spouse, if he or she survives you and shares a credit card, will be saddled with the debt.

I wouldn't get so many credit card offers if I couldn't afford it
Credit card companies send out offers to just about anyone -- even dead people and children. Don't feel so special. Their plan is to get as many people signed up for their cards as possible and likely only do a cursory look at your credit score before sending you mail.

Bankruptcy is the only option if my credit card debt is massive
There are many solutions to high credit card debt, though Louisville bankruptcy may be your best option. Just beware of credit counselors and other programs that may not end up helping you in the long run.

Continue reading "Credit Card Myths Send Louisville Residents Into Debt, but Bankruptcy Helps" »

Recently released mortgage foreclosure numbers by the foreclosure monitoring website RealtyTrac reveal that Jefferson County and Louisville in particular are facing a difficult time in dealing with houses that are being taken away by banks.

The company's data shows that in some parts of Louisville, 1 in 241 housing units were dealing with some type of foreclosure action in August. On a more detailed level, the 40216 zip code had 57 foreclosure actions, most in the city. The top five Louisville zip codes dealing with foreclosure in August:

• 40216: 57
• 40229: 50
• 40272: 40
• 40211: 37
• 40218/40291: 34

The numbers don't lie -- people are hurting. Whether unexpected medical bills or job loss, many Louisville residents simply can't pay their monthly mortgage payment. Even though they've spent years making payments and love the house they're in, the banks are ruthless and are willing to do just about anything to maximize profits.

But there is help. Filing for bankruptcy in Louisville stops the foreclosure process dead in its tracks. Once a person files for bankruptcy, creditors and lenders are no longer allowed to contact them. Creditors are directed to deal with the bankruptcy court.

Consulting with an experienced Louisville Bankruptcy Lawyer is the first step someone in this position should take. These are difficult financial times and homeowners should get advise on how best to deal with the current economic client in how it relates to their homes.

More data from RealtyTrac for August:

- 4,569 foreclosed homes in Jefferson County, KY
- 1 in every 541 homes are in foreclosure countywide
- 608 foreclosures filed in Louisville alone
- 7,097 foreclosure homes statewide
- The average foreclosure sales price is $84,223

The Dow Jones Newswire is reporting that in the Louisville metro area, houses posted the largest foreclosure discount compared to non-foreclosure homes. RealtyTrac research found that prices here are 54 percent below the average for non-foreclosure homes. This underscores the problem with our real estate market and the fact that things aren't changing any time soon.

When someone files for bankruptcy, creditors can no longer collect, yet homeowners often can stay in their homes while the foreclosure process is ongoing. In many cases, the homeowner can come through the bankruptcy process still keeping assets, such as vehicles that were purchased in advance of filing.

After the process is complete, an eligible bankruptcy client will have debts against them discharged and they can again begin to live life free from creditors hounding, wages being garnished and other harassing tactics taken by lenders and the collection agencies they employ. If you are tired of living in fear and frustration because of your credit problems, consult with an attorney today.

Continue reading "Louisville Still Suffering From Housing Mess, But Bankruptcy Stops Foreclosure" »

A recent CNNMoney story reports that an increasing number of college graduates are filing for bankruptcy, as everyone has been affected by the nation's poor economy.

College graduates are the lifeblood of our country's future. Without bright young people who have spent years developing the skills necessary to be successful, America is going to have problems. Yet, these young adults are coming out of school with mounds of debt from student loans, book loans, housing, living expenses, car payments and credit card debt.

And with the nation's unemployment rate around 9 percent, many of these young people have had difficulty finding work.

But there is help. Filing for bankruptcy in Louisville can discharge many debts and through Chapter 13 bankruptcy can defer payments on student loans if the process is handled by an experienced Kentucky Bankruptcy Lawyer.

According to a survey of 50,000 respondents from 2006 to 2010, the rate of college graduates who have filed for bankruptcy has risen 20 percent. Non-college graduates make up the majority of debtors -- 70 percent.

But the study found that while bankruptcy filings have increased in that time frame, which is no surprise, the number of people making more than $60,000 a year who are filing for bankruptcy has also increased. In 2006, only 5.5 percent of debtors made that much, but in 2010, more than 9 percent of bankruptcy filers made more than $60,000 a year.

Most of those who filed for bankruptcy were married couples, while based on race, Asian-American filings doubled and Hispanic filers increased slightly. African-American filers dropped from 15.4 percent in 2006 to 11.3 percent in 2010.

There has been legislation proposed in Washington D.C. that would allow for student loans to be discharged as part of bankruptcy proceedings. As the law is currently written, student loans can't be discharged unless the student is physically unable to work and the loans are an "undue hardship."

That can sometimes be difficult to prove, so the new legislation, if it passes, would be a tremendous help to those who have tens of thousands or hundreds of thousands of dollars in student loan debt and no job to show for it. Too many of these students are falling prey to predatory loan companies writing for-profit commercial loans.

These are tough times financially and citizens are being forced to look at all means avaialable in order to help get them out of debt.

What those in this position in Louisville should consider is bankruptcy. Filing for bankruptcy can enable consumers to get rid of debt that has been mounting for years and get them back on track financially. If college graduates, who are more likely to find work, are filing for bankruptcy in record numbers, those without an education could possibly be in a more difficult position. Starting your career buried in debt is no way to live life.

Everyone is affected by the poor economy and bankruptcy can work for just about everyone. But it is a complex area of law that should be navigated by an experienced Louisville Bankruptcy Lawyer.

Continue reading "Bankruptcy Among Kentucky College Grads is Growing" »

Kentucky foreclosures have affected 38,000 children, according to a report that found the state's poverty and economic woes have led to one of the worst child-health rankings in the nation.

Our Louisville bankruptcy attorneys note it is the latest report on the impact of the struggling economy on our young people. We recently reported on our Kentucky Bankruptcy Lawyers Blog about the high number of students struggling to pay student loans.

Meanwhile, recent reports indicate the average family is able to save only 16 percent of a child's college education, down from 24 percent just a few short years ago. And the U.S. Department of Labor is reporting teens are having trouble finding jobs -- in part because under-employed adults are filling positions often occupied by our youngest workers.

The most recent report ranked Kentucky 41st in overall child well-being. Twenty-six percent of children were living in poverty -- the third-highest in the nation. Only four states had more households where one parent was unemployed. Families are being squeezed financially from every direction. No parent wants a child to feel the impact of financial problems. If you are struggling with bad mortgage debt, real estate debt or credit card debt, we encourage you to get proactive and meet with a Kentucky bankruptcy attorney to discuss your options.

Kentucky residents are seeking Chapter 7 bankruptcy protection in record numbers -- and with good reason. A bankruptcy filing can stop foreclosure, stop garnishment of wages or other collection efforts -- even stop phone calls and other creditor harassment. You and your attorney can then decide the best course of action to secure your financial future. In many cases, you can keep your home or car if it makes financial sense to do so. Most retirement accounts are also protected from seizure.

Chapter 13 Bankruptcy in Louisville is another option. It allows a consumer to establish a repayment plan over 3 to 5 years; most unsecured debts that remain unpaid are forgiven at the end of the plan. Large assets, such as houses, brokerage accounts and family businesses are not impacted.

Filing for bankruptcy can be particularly beneficial for residents dealing with mortgage foreclosure. It will stop the foreclosure process and allow you to remain in the home rent free through the conclusion of your case.

The 38,000 children dealing with foreclosure in Kentucky was less than the national average -- but even that was not good news. Pollsters say that's likely because so many families have already lost their home to foreclosure, combined with the fact that the state has always had a high number of renters.

Business First reports 1 in every 2,312 homes are in foreclosure in Kentucky.

Continue reading "Louisville Bankruptcy Can Provide a Fresh Start for Families, Children" »

Now that the country's debt ceiling crisis has been averted, for now, it's time to take a look at individual American's debt ceilings with tips provided by Forbes.com.

Consumer debt in Louisville can be difficult to tackle. Mounting credit card bills, unexpected medical bills and widespread job loss as a result of the weakened U.S. economy are all reasons people consider bankruptcy. But consulting with an experienced Louisville Bankruptcy Lawyer to go over all possible options should be the first step to financial freedom.

Unlike the federal government, average Joes and Janes can't simply raise their own debt ceiling. So, how does one tackle living beyond their own means? Forbes.com provides some solutions:

See if you can refinance debt with a lower interest rate: Interest rates are near record lows and while the government can borrow money fairly cheaply, personal credit cards aren't necessarily the same way. Sometimes a person can transfer high rate balances to credit cards with low or zero interest rates for at least a period of time. Balance transfer fees and other hidden costs could apply, so beware.

Borrowing from your home equity and retirement plan are also options, but they each have positives and negatives. Home equity loans tend to be tax-deductible, but they require good credit and some equity. Retirement plan loans don't require a credit check and the interest goes back into your account, but money won't be growing for your retirement and you may owe taxes, according to Forbes.com.

Find out where the money is going and try to cut back: The news has been full of politicians saying the country needs to cut back on wasteful spending. While little actually usually gets cut, it makes for good news clips.

But for the average citizen, cuts may be necessary. Forbes suggests looking at three months of bank and credit card statements. If there's not enough fat to cut, a person may have to prioritize spending. Eating out less and going to the movies less may be options to consider.

Start paying down debt: If you're able to free up savings each month, putting it toward debt with the highest interest rates and making the minimum payments on the rest may be a good strategy. But if someone is struggling to make even minimum payments, a payment plan with creditors may be an option. Bankruptcy is also an option.

Stick to a "balanced budget amendment:" Consider not borrowing except for things that can appreciate, like a home, or things that can provide more income, like education or a car for work. Avoid credit card debt, continue tracking spending and don't go over budget.

While these are sound financial tips, they won't work for everyone. Many people are so overwhelmed with debt that they can't come up with a budget or come up with a system to balance their bills. For those people, considering bankruptcy in Louisville may be an option to explore. Filing for bankruptcy immediately stops creditors from calling and can provide a fresh start financially that many people covet.

Continue reading "Tips to Deal With a Kentucky Resident's Debt Ceiling" »

SURRENDERING YOUR HOME IN BANKRUPTCY: PART 2

One of the hardest decisions a family has to make is deciding to surrender their home in a bankruptcy proceeding. Often times, this means allowing a home to go through the foreclosure process and discharging their mortgage obligations in a Chapter 7 bankruptcy. Many homeowners are concerned about the foreclosure process and their obligations to their mortgage company once their bankruptcy process is complete.

Often times, when a person chooses to surrender their home in bankruptcy, he is in the middle of the foreclosure process. Filing a bankruptcy petition creates an automatic stay, which puts an immediate halt to the foreclosure process. The mortgage company may then choose to either file a motion with the court to re-start the foreclosure process (called a motion to terminate the automatic stay) during the 90 days of the Chapter 7 process or wait until the Chapter 7 is discharged to initiate the process again. Either way, foreclosure is a long, legal process and it often takes anywhere from four to eight months for the house to be sold at the foreclosure sale. Regardless of when the bankruptcy is complete, the home still belongs to the homeowner until the home is sold at the commissioner's sale.

It is generally to the homeowner's advantage to remain in their home until the home is sold for two reasons:
1- the debtor has the ability to live "rent free" for a significant period of time and save money for moving expenses, etc.
2- generally a homeowner is still responsible for upkeep and maintenance on the property (cutting the grass, etc) until it is re-sold, so it is easier to remain in the property to ensure that regular lawn maintenance is done, and avoid citations from the city.

Once the debtors receive their discharge at the conclusion of the bankruptcy case, their personal liability on the mortgage debt is eliminated. However, the property still legally belongs to them until the foreclosure sale is complete and a new purchaser has taken title as a result of a commissioner's sale.

If you do choose to remain in the property after the foreclosure has begun, which you have a legal right to do right up until the commissioner's sale has concluded, it is important that you pay your homeowners insurance to ensure that your belongings are properly insured. If your insurance is in escrow, you will want to contact your insurance company directly to find out how far in advance the mortgage company has paid the premiums. In addition, if you live in a condominium or a neighborhood that has homeowners dues, many of these associations will expect for you to pay any association dues that were due after the filing of your bankruptcy case if you were living in the home and taking advantage of the benefits of the association, such as trash disposal, utilities, or use of a pool or workout facility.

If you have questions about your rights and responsibilities during and after a foreclosure proceedings has begun, consult with a competent legal adviser.