Written by Attorney Tina Tran.
Updated July 27, 2020
In 2015, MSN Travel named Louisville’s Kentucky Kingdom one of the ten best amusement parks in America. Less than one year earlier, the former Six Flags Park celebrated a hugely successful reopening by selling one hundred thousand season passes. All of this despite a corporate bankruptcy only four years earlier in 2010 that closed the amusement park for four years. If you are considering filing bankruptcy in Louisville, a Chapter 7 bankruptcy can give you a fresh start as well. Just like Kentucky Kingdom, you can take advantage of Kentucky bankruptcy laws to eliminate crippling debt, increase your access to financial products, improve your credit and help you get a better job. Every day, Upsolve hears from former users who used bankruptcy and our service to do just that. But instead of taking four years, most did it in ninety days! How is this possible? Chapter 7 bankruptcy is a legal process to eliminate debts consumers can no longer afford to pay. Along with Chapter 13 bankruptcy, it is the most common type of consumer bankruptcy in the country. Unlike Chapter 13 bankruptcy, which reduces and consolidates your debts into a three to five year repayment plan, and typically requires the assistance of an attorney, Chapter 7 liquidates (sells) your non-exempt property and pays the proceeds to creditors. Both Chapters result in the entry of a court order known as a “discharge.” A discharge is a legal order by the Court that you no longer owe the debt and your creditors can no longer try to collect it. The best part about Chapter 7 is that, according to the US Courts, “most Chapter 7 cases involving individual debtors are no asset cases.” That means none of the debtor’s property is sold. If you are ready for your fresh start, start your Louisville bankruptcy today.
Louisville Bankruptcy Lawyers – Estimated Cost
Bankruptcy attorneys in Louisville cost between $1,100 and $1,200 for a standard Chapter 7 bankruptcy. For more complicated Chapter 7 cases involving individuals who are facing foreclosure or pending lawsuits, the cost can be as high as $2,000 or more. And for individuals with complicated bankruptcies, Upsolve believes hiring an attorney is an excellent investment. But chances are if you had the money to pay what a Louisville bankruptcy lawyer cost, even for a “standard” Chapter 7 bankruptcy, you wouldn’t be reading this guide and might not be filing bankruptcy in Louisville in the first place! Here at Upsolve, we believe no one should be denied their Louisville bankruptcy rights, simply because they can’t afford to hire an attorney. Because, as our CEO and co-founder, Rohan Pavuluri has said, no one should be “too broke to get a fresh start!”
How to File Bankruptcy in Louisville, Kentucky for Free
The key to successfully filing bankruptcy in Louisville is being prepared to assist the Court in processing your Chapter 7 bankruptcy petition as expeditiously as possible, and with as little complications as possible. Upsolve can show you how to file bankruptcy in Louisville in eight simple steps. If you complete each of these steps as outlined below you should receive your Chapter 7 bankruptcy discharge approximately ninety days after you file your petition.
Collect Your Louisville Bankruptcy Documents
To file a Chapter 7 bankruptcy in Louisville you will need to gather many of your everyday financial documents. These documents include your last two months pay stubs, past six months of bank statements, your last two years tax returns and W-2 statements, your monthly mortgage statement or lease agreement, your retirement account or 401k statement, your life insurance policy, the certificate of title to your car and, if applicable, the deed to your home. In addition to these documents, you will need your bills. Your bills include anything you owe or pay on every month such as credit cards, medical bills, utilities, personal loans, car notes, rent payments, gym memberships, cable bills, cell phone bills, groceries and student loan payments. You will list all of these on specific forms in your Chapter 7 bankruptcy forms. You may have to ask your employer, or financial institution, for some of these records. Other records you may have to pick up from county, or city, government offices. Completing the forms for your Chapter 7 bankruptcy in Louisville will go much smoother if you do not start filling them out until you have all these documents, and any other documents related to your current financial situation, available.
Take Credit Counseling
When you submit your Louisville bankruptcy petition to the Court, you will need to tell the Court whether you received a briefing about credit counseling in the last 6 months. You are required to obtain this briefing, often referred to as a Pre-Bankruptcy Credit Counseling Course, before filing your Chapter 7 bankruptcy in Louisville. The only exceptions are for individuals who are mentally incompetent, have a physical disability that prevents them from taking the course, and for active duty service members in a combat zone. Everyone else must have completed the course before filing for bankruptcy or their case will be thrown out and they will lose the filing fee. Typically, the course takes thirty minutes to an hour to complete, costs $15 to $35 and can be taken online, over the telephone and in person. You must take the course from an approved credit counseling agency such as Apprisen.com that is capable of issuing you a certificate of completion when you finish the course. Apprisen has a local office located on 11492 Bluegrass Parkway, Suite 105, Louisville, KY 40299. If you want to locate other approved credit counseling agencies that offer the course for Kentucky bankruptcy cases, check this list published by the Office of the United States Trustee.
Complete the Bankruptcy Forms
Upsolve suggests that the first thing you do when you start the process of filing bankruptcy in Louisville is collecting your bankruptcy documents because you will use those documents throughout the entire process. The first step where you will use your bankruptcy documents is in completing your bankruptcy forms. Completing all of your bankruptcy forms is the most time consuming part of filing bankruptcy in Louisville. If you have your bankruptcy documents on hand and logically organized when you begin, the process will be much easier. Most of the information requested in your bankruptcy forms will be general financial information and should not cause you any alarm. However, if you are married and filing bankruptcy without your spouse, you may be required to list your spouse’s name on Schedule H, which asks about whether you have any co-debtors. A co-debtor is anyone who is also responsible for any of your debts, like a co-signer for example. For most married individuals this will be their spouse, and you must list them on Schedule H. But listing them will not “add” them to your bankruptcy and will not affect their credit. But it will also not relieve them of their responsibility to pay the debt, even after you receive your discharge. Your discharge protects you, and you alone.
Get Your Filing Fee
Unless you earn less than 150% of the poverty level, you will have to pay a $338 filing fee to the Bankruptcy Court when you file your Chapter 7 bankruptcy in Louisville. The Court does not accept personal checks so payment must be made by cash, cashier's check, certified check or money order made payable to "Clerk, U.S. Bankruptcy Court." If you pay with cash, you must bring the exact amount. The clerk will not give change, or accept more than this amount. If you cannot afford to pay the entire fee at once, you can request to pay the filing fee in installments. Complete the request form and bring it with you when you head to the Court to file your Kentucky bankruptcy. If you do earn less than 150% of the poverty level and are unable to pay the fee in installments, you can request to have the entire fee waived by completing and submitting this application to the Court. This request must also be submitted when you file your Chapter 7 bankruptcy with the Court. If your request for a fee waiver is denied, you will be ordered to pay the filing fee in installments instead.
Print Your Bankruptcy Forms
When you have completed all of your bankruptcy forms you will need to print them. If you have a printer at home, print your original Louisville bankruptcy petition along with one copy. You will sign and file the original with the Court and keep the other copy for yourself. If you do not have a printer at home, the Louisville Free Public Library is located on the corner of W. Broadway and S. 3rd Street at 301 York Street. It is only a four minute walk from the Louisville Palace Theatre and is open from 9:00 a.m. to 9:00 p.m., Monday through Friday, 9:00 a.m. to 5:00 p.m. on Saturday and 1:00 p.m. to 5:00 p.m. on Sunday. You can print documents at the Main Library for $0.10 per page. Whether you print your bankruptcy forms at home or the library, make sure that you only print on one side of the page. Documents printed double-sided are not accepted by the Court.
Go to Court to File Your Forms
Upsolve cannot file your Louisville bankruptcy for you. Whether you complete all your bankruptcy forms on your own or use Upsolve to help you, you will still have to submit them to the Court. The United States Bankruptcy Court for the Western District of Kentucky handles all bankruptcies for individuals residing in Louisville and Jefferson County. The Court is located on the corner of Broadway and 6th Street at 601 W. Broadway, Suite 450, Louisville, Kentucky, a mere four minute drive from the Mohammad Ali Center. The Court is open from 8:30 a.m. to 4:30 p.m. Monday through Friday. You should bring your original, signed Louisville bankruptcy forms and your filing fee, or your request to pay the filing fee installments (or to have it waived). If you arrive after 4:00 p.m., your bankruptcy petition may not be filed until the next day and you will not be given a case number. Dress appropriately. Halter tops, soiled work clothing, mini-skirts, spandex, athletic wear, and hats are not appropriate and should be avoided if possible. You should also expect to pass through security and must have a picture ID.
Mail Documents to Your Trustee
At least seven days before your creditors’ meeting your Trustee must receive, at a minimum, a copy of your most recent federal income tax return. The Trustee is an individual appointed by the Court, usually an attorney, to review your financial situation and handle your Kentucky bankruptcy case for the Court. Your Trustee may also request some of the supporting documents you used to prepare your Louisville bankruptcy schedules and statements. Most Trustees will not require a copy of your schedules and statements because they get it from the Court, electronically. They also do not generally require copies of your bills; instead, be prepared to submit bank statements and similar documents. A copy of all documents requested by your Trustee must be mailed to them directly. Your Trustee’s name and address will be provided to you on Form 309a, the Notice of Chapter 7 Bankruptcy Case. If you do not get this form when you file your bankruptcy petition, you will get it shortly thereafter by mail. If you are unsure of what you are required to send to your Trustee, then do not hesitate to call their office and ask.
Take Bankruptcy Course 2
The Bankruptcy Code requires you to take a second credit counseling course after your Louisville bankruptcy case is filed. This course must be completed no later than 60 days after the date set for your creditors’ meeting. The second bankruptcy counseling course, also known as the Post-Petition Bankruptcy Credit Counseling Course, takes anywhere from two to three hours to complete. It may also be taken online, over the telephone or in person. But if you take the course online you must pass a test at the end of the course. You must score at least 70% on the test or the credit counseling provider must call you and personally administer the test to you. Because of this, the course costs more than the pre-petition bankruptcy course, with the cost ranging from $35 to $50. You must file your certificate of completion with the Court after you finish the course, so the Court knows you are ready to have your discharge entered in your Kentucky bankruptcy case.
Attend Your 341 Meeting
Before you receive your discharge, you will have an opportunity to meet with your court-appointed Trustee and discuss your Louisville bankruptcy case in person. This meeting is known as the 341 meeting of creditors or simply the creditors’ meeting. The 341 meeting of creditors is a brief, semi-formal meeting between you, your Trustee and any of your creditors who choose to appear to discuss your case. Most creditors usually never show up, so in all likelihood it will only be you and your Trustee. The Trustee will swear you in and verify your identity, with either your driver’s license, state identification card or passport. They also have to verify your social security number, so make sure to bring your original social security card. They will spend the next ten minutes or so asking you specific questions about your situation, such as where you work, where you live, whether you rent or own your home, and whether anyone owes you any money. You will probably have answered most of these questions already in your bankruptcy forms, but the Trustee is required to personally verify certain information contained in the forms. If, while answering the Trustee’s questions, you realize that something you put on your forms is no longer accurate, do not be afraid to let the Trustee know. Having to update information you provided over a month ago is not unusual and you will not be penalized for having to change an answer. Intentionally failing to correct an answer, however, even though you know it’s incorrect, is a serious transgression.
Dealing with Your Car
When you start filling out your Louisville bankruptcy forms, several forms will ask you to provide information about your car. The first of these is Schedule A/B where you will list all your assets. Your car is considered an asset and you must list your car and how much it is worth. The next form that will require information about your car is Schedule C, where you must list your car if you wish to claim an exemption for it. An exemption spares your car from being sold in bankruptcy. You can only claim an exemption for your car if you own your car or are buying, not leasing, it. If you are leasing your car, then you must list it on Schedule G as an executory contract instead. An executory contract, usually a lease, is a contract that is still open and in the process of being fulfilled. If you are still making payments on the loan, or have a lease for your car, then you must also list it on the Statement of Intentions. This form asks you what you intend to do with your car, as part of the bankruptcy. You have three options. The first option is to surrender the car or give it back and eliminate your obligation to pay the balance left on the loan or lease. The second option is to redeem the car. To redeem the car means you pay the entire market value of the car to the lender, in exchange for them giving you a clean title to the car. If you are able to redeem the car, any balance owed on your loan, above its market value, will be discharged as part of your bankruptcy. The final, and most common, option is to reaffirm the loan on the car by signing a reaffirmation agreement. A reaffirmation agreement is an agreement between you and the lender. You agree to keep paying your loan on the car and give up your right to have it discharged in bankruptcy; the lender agrees to let you keep the car. You are not required to enter into a reaffirmation agreement, and if you don’t have a lawyer, the Court has to approve the reaffirmation agreement. Most Courts approve reaffirmation agreements, as long as they are convinced you have entered into it voluntarily and can afford to make the payments after your Chapter 7 bankruptcy in Louisville is done.
Kentucky Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Louisville
Kentucky Means Test
While you have a right to file a Louisville bankruptcy, what type of bankruptcy you can file depends largely on how much money you make and the size of your family. This is because of something known as the Kentucky bankruptcy Means Test. The Kentucky bankruptcy Means Test is a mathematical calculation that compares your average household income based on the last six months, and your family size, to the median income for a family of the same size in the Bluegrass State. If your income is greater than the median, then something known as a “presumption of abuse” exists in your case. A presumption of abuse means that it looks like you earn enough money to be able to pay your bills, at least if you don’t consider your expenses. If this presumption of abuse arises in your case, you will need to complete some additional and somewhat complex calculations to see if you can overcome the presumption. If you are not able to overcome the presumption, you should consult with an attorney for assistance, as there are many nuances to the Kentucky bankruptcy Means Test.
Median Income Levels for Kentucky
Kentucky Median Income Standards for Means Test for Cases Filed On or After May 1, 2021
|Household Size||Monthly Income||Annual Income|
Poverty Levels for Kentucky
Kentucky Fee Waiver Eligibility for Cases Filed On or After May 1, 2021
Eligible for fee waiver when under 150% the poverty level.
|Household Size||State Poverty Level||Fee Waiver Limit (150% PL)|
Kentucky Bankruptcy Forms
Understanding all of the Kentucky bankruptcy forms that are needed for your Louisville bankruptcy case is very important. We already discussed filling out the forms and the requirement that the information you provide be accurate and complete. We also discussed having all of the bankruptcy documents you will need to complete the forms when you begin. In addition to the standard Kentucky bankruptcy forms that are included in any Chapter 7 bankruptcy petition, there are also certain local forms that you may need to file with the Court before your Kentucky bankruptcy case is finished. For example, if you have to add or change information on a form after filing bankruptcy in Louisville, you will need to do what is known as an “amendment.” An amendment either changes, adds, or removes information from a form that has already been submitted to the Court. In addition to the updated, or amended, form you must submit this local form to the Court.
Kentucky allows individuals filing a Louisville bankruptcy to choose between federal bankruptcy exemptions and Kentucky bankruptcy exemptions. Exemptions are rules that protect specific pieces of your property up to a specific value. For example, in Kentucky any alimony or child support you receive is exempt as long as it is reasonable for you and your dependent’s support. Exemptions are important because any property that is not exempt in a Chapter 7 bankruptcy can be sold by the Trustee to pay creditors. Fortunately, Kentucky bankruptcy exemptions are usually generous enough that most individuals will be able to exempt all of their property. And if the Kentucky bankruptcy exemptions are not enough to protect your assets in your Chapter 7 bankruptcy in Louisville, you can use the federal bankruptcy exemptions instead which are even more generous.