If someone is in over their head with debt, loan payments, and other financial obligations, bankruptcy may be a good alternative for them because it can discharge most or all of a filer’s debt upon completion. However, the government does not let borrowers out of their commitments without making them jump through a few hoops first.
One such requirement, and the focus of this blog post, is that anyone applying for bankruptcy must first complete credit counseling.
Credit Counseling in Kentucky
Kentucky, like other states in the country, requires that any person filing for bankruptcy go through credit counseling before they apply for bankruptcy. The purpose of credit counseling is to see if, with the proper budgeting assistance, it is feasible for the applicant to get out of debt without declaring bankruptcy. This requirement does not depend on whether a person is seeking a Chapter 7 or Chapter 13 bankruptcy; credit counseling is required in both cases.
The counseling must be through an approved counselor and must be completed within the six months preceding the bankruptcy. The actual counseling process consists of sitting down with an advisor and going over the applicant’s finances to determine a repayment plan, if possible. The credit counselor will also make sure that bankruptcy is a financial requirement, and not a way to avoid paying debts that the borrower does not agree with or feels is illegitimate.
The law requires that all bankruptcy filers go through counseling, not necessarily that the filer adopt the recommended plan. However, a court may inquire why the plan was not followed when looking into the applicant’s bankruptcy application.
Credit counselors generally will charge a modest fee for their services. However, if your income is below 150% of the poverty cut-off, you may qualify for free or reduced-fee counseling.
Once credit counseling has been completed, the counselor will provide the applicant with a certificate of completion, which must be filed no later than 15 days after bankruptcy is filed.
Having an Attorney Help You With the Process
If the Kentucky bankruptcy process seems daunting, it is because it can be. Depending on your specific financial situation, some of the forms are quite long, complex, and can take substantial time to fill out properly. With the assistance of an experienced Kentucky bankruptcy law attorney, you can ensure that you have a knowledgeable guide throughout the process.
Are You Considering Filing for Bankruptcy in Kentucky?
If you are considering filing for bankruptcy in Kentucky, contact the Schwartz Bankruptcy Law Center and speak with a dedicated Kentucky bankruptcy law attorney. At the Schwartz Bankruptcy Law Center, we have years of collective experience helping our clients get out from under oppressive financial debt and getting them on their way to their new life debt-free. Click here, or call 866-366-3328 today to schedule your free initial consultation.
More Blog Posts:
Federal Bankruptcy Court Goes over the Differences Between Chapter 7 and Chapter 13 Bankruptcies, Kentucky Bankruptcy Lawyers Blog, published March 31, 2014.
Federal Court in Western District of Kentucky Refuses to Change Lower Court’s Order that Debt was Dischargeable, Kentucky Bankruptcy Lawyers Blog, published March 25, 2014.