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bankruptcy Archives

Making The Decision To File For Bankruptcy

With a massive amount of debt including loans and credit card payments, many consumers might think that bankruptcy is the solution to getting back on the right financial track. When collectors continue to call and it seems like there is no way to get out from under the umbrella of being in debt, then bankruptcy might be the best option. Most people don't think that bankruptcy would be something that they would need to do, but it can result in a feeling of freedom.

Key steps to take after bankruptcy

In 2016, 766,000 Americans filed for bankruptcy, and there are many reasons why a person could choose to do so. For instance, Kentucky residents could experience a job loss or a medical bill that they can't afford to repay. Those who choose to file for bankruptcy should learn the difference between a Chapter 7 filing and a Chapter 13 filing. In a Chapter 7 case, debts could be discharged without paying much or anything to creditors.

How to improve a credit score after bankruptcy

People in Kentucky who are struggling with debt might hesitate to file for bankruptcy because of fears about being unable to rebuild their credit. However, according to one study by Lending Tree, nearly two-thirds of people who filed for bankruptcy had achieved a credit score of 640 or more after two years.

How a bankruptcy proceeds

People in Kentucky who are struggling with debt may file for Chapter 7 or Chapter 13 bankruptcy based on their income. With Chapter 7, a person's assets are liquidated to pay off creditors although some assets may be considered exempt. With Chapter 13, a person may pay off creditors with a payment plan that last for three or five years.

Credit card debt on the rise

Many people in Kentucky are currently living with some amount of credit card debt. This isn't unusual as many households throughout the U.S. use credit cards to manage their personal finances. However, when credit card debt becomes unmanageable, people may need to seek debt relief options.

How bankruptcy impacts vehicle ownership

An individual going through bankruptcy in Kentucky doesn't necessarily have to give up their vehicle during the proceedings. This may be true even if the lender was otherwise inclined to repossess the car. When a person files for bankruptcy, they receive an automatic stay of repossession or other creditor collection actions. Generally speaking, if the debtor agrees to make payments during the three or five year repayment plan, they can remain in possession of the car.

Learning more about credit card debt balances

Americans had a collective credit card debt balance of more than $1 trillion in 2017. This was according to data from the Federal Reserve. However, that debt isn't necessarily spread evenly throughout the country. A Creditcards.com survey looked to see which cities had the most debt as well as which cities had the highest debt burden. The survey listed the top 25 most populous cities in order of their average debt balance per resident. The data did not include Kentucky.

Possible changes to mortgage modification rule

A growing trend in Chapter 13 bankruptcy cases has affected the way residential mortgages are treated in bankruptcy court. A series of decisions from bankruptcy courts has expanded the application of so-called "cram down" mortgage modifications. Should this trend spread to Kentucky bankruptcy courts, it may have a major effect on debtors who own property.

Experian reports small gains in credit scores across age groups

The consumer credit reporting agency Experian has released its annual State of Credit report. The company's analysis of consumer debt showed small improvements in credit scores in 2017 compared to 2016. The report also highlighted the challenges faced by consumers that some in Kentucky might recognize.

The pros and cons of a hardship withdrawal

Kentucky residents who have an urgent need for emergency cash may be able to take out a 401(k) hardship withdrawal. This may be available to make repairs to a home, pay emergency medical expenses or cover other emergency expenses such as rent or utility bills. To qualify for a loan, individuals cannot have access to other methods of covering those expenses. However, it may not be necessary for an employee to prove this.

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