Bankruptcy. What is it & What are the Costs?
The American dream is hallmarked by accomplishments like getting married, having and raising children, working a high-paying job, and living in an objectively nice house bordered by a white picket fence. Succeeding in life, however, almost always requires you to take risks that can effectively derail life as you know it if such opportunities fail to bear fruit.
While virtually nobody foresees such complications, they happen far more frequently than most people believe.
There are many reasons you can quickly go from living a lavish life like the one described above to needing to file bankruptcy. Things like failing to maintain on-time, in-full payments on your home’s mortgage, racking up tens of thousands of dollars in credit card debt can result in being forced to file bankruptcy.
What is Bankruptcy?
Despite popular belief, bankruptcy is not the same thing as being flat-out broke. Rather, people consider filing bankruptcy in a court of law when they are unable to reasonably pay back debts they’ve accumulated.
In other words, bankruptcy is the process whereby an individual, a married couple, or a business undergoes hearings in a federal court – in the United States, bankruptcy declarations are heard by federal courts, rather than state or local courts of law – that hears nothing but bankruptcy cases to effectively tell creditors, “I am unable to pay what I owe you.”
Bankrupt persons, couples, and businesses are legally protected by the United States federal government so that creditors cannot seek recourse for what such bankrupt people or businesses owe them. The only debt that courts can force filers to pay back in full is student loans.
While bankruptcy is a relatively simple concept to understand, calculating bankruptcy costs with respect to declaring the inability to pay back debts in the Commonwealth of Kentucky isn’t so cut and dried.
Bankruptcy Costs
First, let’s understand the distinction between Chapter 7 – “straight” bankruptcy – and Chapter 13 – “reorganization” bankruptcy.
Chapter 7 filings involve swapping assets for the discharge of debts. If you are trying to hold on to your assets Chapter 7 probably isn’t right for you. This type of bankruptcy proceeding is mandated by the Commonwealth of Kentucky to cost just $306.
Chapter 13 filings create a plan where you agree to pay back debts. As long as you don’t default on the payment plan outlined in court, you’re able to keep your property. We recommend you only consider Chapter 13 if you’re not too far behind on payments, otherwise Chapter 7 is a more appropriate option. Chapter 13 filings cost just $281 in Kentucky.
*Below is a list of fees associated with filing bankruptcy in Kenton County Kentucky in 2018.
| What you’re paying for | Cost |
|---|---|
| Chapter 7 filing fee | $335 |
| Chapter 13 filing fee | $310 |
About our firm, W. Ron Adams Law, PSC
Our office, located in Erlanger, KY is located in the northern most portion of Kentucky, just 15 minutes south of Cincinnati. We have more than 30 years worth of experience under our belt, and have happily served more than 8,000 clients since 1987.