Chapter 7 Bankruptcy in Kentucky

CHAPTER 7 BANKRUPTCYin Kentucky

Chapter 7

Chapter 7 results in most debt being discharged, or eliminated,

without the need to repay it

For this reason debtors who qualify typically choose to use chapter 7

THE MEAN TEST

The “Means Test” was introduced by the Bankruptcy Abuse Prevention

and Consumer Protection Act of 2005 (BAPCPA) to prevent abuse of

chapter 7

The means test compares your income to that of other similarly

situated households in your geographic area to determine if

your income falls at, or below, the median

Debtor’s whose income is below the median may file a chapter 7

bankruptcy. Other debtors may qualify under other provisions.

LIQUIDATION AND EXEMPTIONS

Chapter 7 is commonly referred to as a “liquidation” bankruptcy

because the Trustee has the power to seize and sell non-exempt assets,

most debtors who file a chapter 7 bankruptcy are able to protect their assets by using the federal or state

exemptions

In Kentucky, a debtor may choose to use either the federal or state

exemptions, but CANNOT combine them

DISCHARGE AND LIFE AFTER A CHAPTER 7

BANKRUPTCY

A typical chapter 7 bankruptcy only takes about four to six months to

complete

When the bankruptcy is discharged, most debts are

eliminated, meaning the debtor is no longer responsible for paying

them

Most debtors are able to obtain financing for a vehicle or other purchases within the

first year after a chapter 7 discharge

Financing for a mortgage can take longer – typically two years for an

FHA loan and up to four years for a conventional loan

Learn More About Chapter 7 Bankruptcy in Kentucky

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www.mmslawonline.com

Content provided by: Best Legal Practices