Frequently Asked Bankruptcy Questions in Kentucky and Indiana
Answers from experienced bankruptcy attorneys in Louisville
Levy Law Office is committed to providing knowledgeable legal advice to individuals and families struggling with debt in the Louisville area, serving people in Kentucky and southern Indiana. When we first meet clients with debt problems, we find that many of them do not understand their legal rights or are unaware of the tools at their disposal. By answering some common questions, we want to arm you with the information you need to take effective action. Some of the most frequently asked questions we receive about bankruptcy are these:
- How do Chapter 7 bankruptcy and Chapter 13 bankruptcy differ?
- Are all of my debts eligible to be discharged in Chapter 7 bankruptcy?
- Will I lose access to funds in my retirement accounts?
- Can I still collect Social Security benefits?
- How do my creditors know that I have filed for bankruptcy?
- What is wage garnishment?
- Do any restrictions exist on wage garnishment?
Contact skilled Louisville attorneys to address all of your debt concerns
Levy Law Office represents clients in Louisville and the surrounding areas in a complete range of bankruptcy and other debt-relief matters. Please call 502-495-3027 or contact us online to schedule a meeting.
Chapter 7 bankruptcy gathers most of a person’s assets and liquidates, or sells, them to generate funds to pay creditors a portion of what they are owed. Under this process, debts are then discharged. In a Chapter 13 proceeding, someone with a steady income who is unable to make their current payments is given a schedule to repay what they owe over three or five years. In both instances, creditors are prevented from pursuing collections without court authorization.
A Chapter 7 bankruptcy disposition will discharge many of the most common types of debt — such as credit card debt and medical bills — that burden Indiana and Kentucky residents. However, some categories of debt remain, such as student loans, child support, and taxes. We can look at your situation and explain exactly how the relevant laws affect you.
In nearly every case, retirement accounts and pension benefits are exempt from bankruptcy proceedings, so funds in 401(k) plans, IRAs and other accounts will usually not be affected.
Social Security benefits are not included in the means testing required for Chapter 7 bankruptcy. If you are collecting payments and seek to establish a Chapter 13 repayment plan, Levy Law Office can advise you as to how that income is calculated in Kentucky and Indiana.
When someone files for bankruptcy, the court notifies each listed creditor with information on the proceeding and the name of the trustee. This halts any actions they have been taking against you.
Wage garnishment, which is established by a court order, directs an employer to withhold a portion of one’s paycheck as part of a debt repayment plan. The court has the withheld funds sent to a creditor until the debt is satisfied.
Yes, limits are usually placed on wage garnishment orders so that an excessive amount is not kept from the wage earner. Usually a garnishment would not exceed 25 percent of disposable income.