Filing Bankruptcy in Owensboro, Kentucky

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Written by Tina Tran, Esq..  
Updated July 26, 2019

Filing bankruptcy in Owensboro can offer you and your family the opportunity to overcome your financial mistakes of the past. Whether you are considering filing bankruptcy due to financial conditions beyond your control, or because you are simply overwhelmed by your current financial situation, a Chapter 7 bankruptcy in Owensboro can give you and your family a fresh start. Chapter 7 bankruptcy will put an end to upsetting calls from collection companies, harassing you about bills you can’t afford to pay. It also stops any creditor who hasn’t already sued you from suing you after you have filed your Owensboro bankruptcy petition with the Court. Finally, if you successfully complete your Chapter 7 bankruptcy in Owensboro all of your dischargeable debts will be eliminated or “discharged,” and you’ll no longer have to pay any of them. If you own your home but are behind on your mortgage, you can choose to file a Chapter 13 bankruptcy. A Chapter 13 bankruptcy allows you to keep your home, and catch up past due mortgage payments, as part of a court approved repayment plan. The plan combines all of your debts, after reducing most of them, into one regular monthly payment that you will pay directly to the Court for the next three to five years. By far, Chapter 7 is the most popular of the two. Chapter 7 costs less than a Chapter 13 and it’s quicker. Instead of 3 to 5 years, you can receive a discharge in a Chapter 7 bankruptcy in ninety-days. If you don’t own a home, can't afford a lawyer, and the prospect of having to wait three to five years to get clear of crippling debt is a little too long for you, then you can file a Chapter 7 bankruptcy in Owensboro for free. And this Upsolve City Guide has been created to show you how!

Owensboro Bankruptcy Lawyers – Estimated Cost

You don’t have to pay the average Owensboro bankruptcy lawyer cost of $1,100 to $1,200 to file Chapter 7 bankruptcy in Owensboro. While that’s what an average Owensboro bankruptcy lawyer costs, you can file your own Chapter 7 bankruptcy without the aid of an attorney, if you follow the steps outlined in this guide. If you get overwhelmed with trying to prepare for your Owensboro bankruptcy, you can stop and seek legal help at any point along the way. But Upsolve is confident you can do it on your own, if you remember to take your time, take a deep breath, and take advantage of resources like this City Guide. 

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How to File Bankruptcy in Owensboro, Kentucky for Free

Whether you are enjoying Smothers Park, paying your respects at the Shelton Memorial, admiring Owensboro’s downtown sculptures or hanging out with your children at Lazy Dayz Playground, life in Owensboro is truly unique. Upsolve believes you should not be forced to give up that way of life just to make ends meet. If you are ready to take your first steps to financial freedom again, the nine steps outlined below for filing Chapter 7 bankruptcy in Owensboro will show you how. Each step is explained in detail, together with helpful links where you can find the information or forms you will need. We conclude with a discussion of how to deal with your car in your Kentucky bankruptcy and how you can protect your property.


Collect Your Owensboro Bankruptcy Documents

Even if you are still deciding whether to file a Chapter 7 bankruptcy in Owensboro and , whether to hire an attorney, there are some essential documents you will need for your Kentucky bankruptcy that you can start collecting now. These documents can roughly be divided into two categories: your financial records and your bills. The financial records you will need include pay stubs, bank statements, tax returns, a W-2, insurance records, 401k or pension statements, and certificates of title to your car. If you decide to file a Chapter 13, you may also need the recorded deed to your home. The bills you should collect include credit card bills, collection notices, outstanding legal judgments, unpaid medical bills, overdrawn bank accounts, and the name and address of anyone you owe money. Give yourself plenty of time to locate all of these documents in case you need to request copies by mail from your employer or your bank.

Take Credit Counseling

If you’ve been having financial difficulties for a long time, you may have already had one or two less than favorable experiences with credit counseling agencies. If so, you most likely sought their help in trying to get help from your credit card lenders, or other creditors, without much meaningful success. If so, don’t get upset when you find out that you have to take a mandatory pre-petition bankruptcy credit counseling course before you can file a Chapter 7 bankruptcy in Owensboro. Without it, you are not eligible to file bankruptcy. The Bankruptcy Code topics the counseling agencies have to cover and how much they can charge, or their approval to offer the course to folks filing bankruptcy in Owensboro may be revoked. Most credit counseling agencies charge from $15 to $35 for the course and most offer it online, over the telephone or in-person. The agency that administers the course must be approved to do so by your local United States Trustee and must issue you a certificate of completion for you to file with the Court when you finish the course. 

Complete the Bankruptcy Forms

Whatever else you do, when you are collecting your Owensboro bankruptcy documents and looking for a place to take your credit counseling course, don’t neglect to start filling out your bankruptcy forms because that’s the one area where you may be tempted to procrastinate the most. Here are three good reasons you should start completing your bankruptcy forms as soon as possible. 

1.) Your financial information is constantly changing. The longer you delay completing your forms, the more likely it is the information you have collected will become outdated. For example, most Trusteesrequire your last four to six months bank statements. Waiting just two weeks can cause a statement you’ve already obtained to become old and force you to get the yet another one. 

2.) Your credit counseling certificate is only good for 180 days or six months. If you really procrastinate and it expires, you have to pay for and take the credit counseling course again. 

3.) The longer you wait to complete your bankruptcy forms, the more likely it is that creditors start collection proceedings against you such as lawsuits, foreclosures, garnishments or evictions. 

Once you have filed your Chapter 7 bankruptcy in Owensboro, none of these actions can be initiated against you, and if they already started, they have to stop once your Kentucky bankruptcy case is filed. 

Get Your Filing Fee

You must pay a $335 filing fee to file your Chapter 7 bankruptcy in Owensboro with the Court. This fee consists of a $245 case filing fee, a $75 miscellaneous administrative fee and a $15 Trustee surcharge fee. Every Bankruptcy Court must collect this fee regardless of where you file your Chapter 7 bankruptcy petition. If you are filing your petition without an attorney, you will either have to pay the fee in cash or with a cashier’s or certified check payable to “Clerk, US Bankruptcy Court.” If you pay in cash, you must bring exact change as the bankruptcy clerk will not give you change. If you don't have enough money to pay the entire fee at once, you can file a request with the Court to pay the fee in installments. If you can’t afford to pay the fee at all, you can file a request with the Court to have the fee waived. Asking to pay the fee in installments is not unusual and Courts grant these requests routinely. Asking for a fee waiver, on the other hand, is viewed very seriously and you must provide information to the Court on your request form showing that you earn less than 150% of the poverty level and that you can’t afford to pay the fee in installments even after filing bankruptcy in Owensboro. If the Court denies your request for a fee waiver, you will typically be required to pay the fee in installments.

The typical Chapter 7 bankruptcy petition packet consists of all the bankruptcy forms, which come out to about 60 to 100 pages. You will have to print your Chapter 7 bankruptcy forms in order to file your Owensboro bankruptcy with the Court. Upsolve recommends printing the original and, if possible two, but at least one, copy. You will file the original with the Court and keep one copy for yourself. The second copy will most likely be for you as well depending on whether your bankruptcy Trustee asks you to send them a copy of your petition packet, in addition to your supporting documents. In most cities, the Trustee will receive a copy of your petition packet electronically from the Court after a Kentucky bankruptcy is filed and they are assigned to the case. You can contact your Trustee directly when the Court provides you with their name and contact information. Whatever number of copies you choose to print, be sure to only print on one side of each page. If you are unable to print the entire petition at home, the Daviess County Public Library is only a five minute drive from the Owensboro Convention Center on 2020 Frederica Street. Printing is available for $0.10 per page. You can also print remotely using their Mobile Printing Service.

Go to Court to File Your Forms

If you wish to file your Kentucky bankruptcy in person, you will have to take your petition packet to the federal Court in Louisville. The Louisville courthouse is about an hour and forty-five minute drive from downtown Owensboro. The Court is open to the public from 8:30 a.m. to 4:30 p.m., Monday through Friday. The Court is not open on federal holidays. You should plan to arrive early in order to give the bankruptcy clerk time to enter your petition into the Court’s system. Identification is required to enter the courthouse in Louisville, and you must dress appropriately. Halter tops, soiled work clothing, mini-skirts, spandex, athletic wear and hats are not allowed. Don’t forget to bring your filing fee or your request to pay the fee in installments or to have the fee waived. You also have the option of mailing your petition, fee, and requests to the Court at U. S. Bankruptcy Court, 601 West Broadway, Suite 450, Louisville, KY 40202. If you mail your petition packet, you must make sure you have signed every page of your Owensboro bankruptcy forms that require your signature. If you neglect to sign a page your petition packet could be sent back to you unfiled or, if it is filed, flagged as deficient. If your petition is flagged as deficient you will be given limited time to submit the signed pages or your Chapter 7 bankruptcy in Owensboro will be tossed out. You will receive a notice from the bankruptcy clerk with the exact number of days you’ll have depending on which form wasn’t signed.

Mail Documents to Your Trustee

When you’ve filed your Kentucky bankruptcy with the Court, you will need to mail a copy of all the required documents to your court-appointed Trustee. The Trustee is the individual assigned by the Court to handle your bankruptcy. In order to do this, your Trustee needs to review certain documents, along with your bankruptcy petition packet, to prepare for your meeting with them. You must mail your documents to your Trustee so that the Trustee receives them no later than 7 days before your scheduled creditors’ meeting. The Court will provide you with the name, address and other contact information of your Trustee when you have filed your petition. This information will be part of the Notice of Filing Chapter 7 Bankruptcy Casethe Court will issue after your Chapter 7 bankruptcy in Owensboro has been filed. You don’t need to send your Trustee a copy of your petition packet unless you have spoken with their office and been told to do so. If you haven’t received any requests from the Trustee’s office, then make sure to send in at least your most recent federal income tax return.

Take Bankruptcy Course 2

After you have met with your Trustee for your creditors’ meeting, nothing much happens while you wait for your Owensboro bankruptcy to be concluded. During this time, you must do two things to make sure your discharge is not delayed. The first thing you must do is make any remaining payments you owe on your installment agreement for the court filing fee. The second thing you must do is complete a second bankruptcy credit counseling course. The second course, known as the Post-Petition Bankruptcy Credit Counseling Course, can be administered by the same agency that did your pre-petition bankruptcy course, assuming they are approved to offer it. The second course will typically cost more than the first course. The agency can charge up to $50 for this course. The second course also takes twice as long as the first course to complete, sometimes up to three hours. If you take the second course online, you will be given a test at the end of the course. You must pass the test to receive your certificate of completion. Finally, be sure to ask the agency if they will file your certificate with the Court. If not, you must file it with the Court yourself as your discharge can’t be entered without it.

Attend Your 341 Meeting

You must meet with your court-appointed Trustee in person before a discharge can be entered and your Owensboro bankruptcy concluded. This meeting is known as a 341 meeting of creditors. You will receive notice of the date, time and location of the meeting from the Court on the Notice of Chapter 7 Bankruptcy Case you will receive shortly after filing bankruptcy in Owensboro. You should bring a signed copy of your petition packet to this meeting along with any of your bankruptcy documents you used to prepare it. You should also bring your personal identification and original social security card. The meeting begins with the Trustee swearing you in and verifying your identity. The Trustee will then ask you some questions about your Kentucky bankruptcy. If the Trustee is missing any documents that you were required to send them, they will request them at the meeting. Finally, the Trustee will give any of your creditors who appear at the meeting a chance to ask you some questions as well, though it’s unlikely any of your creditors will appear. However, if you have indicated that you intend to “reaffirm” or “surrender” a vehicle, the lender may show up to get your signature on the reaffirmation agreement or to arrange to pick up for your vehicle. Whether the Trustee asks you or not, you should any additions, deletions or corrections you have become aware of since filing bankruptcy in Owensboro reveal to the Trustee.

Dealing with Your Car

After filing for bankruptcy in Owensboro as a car owner, you will have to continue making your car payments if you want to keep the car. A car loan is considered a “secured debt” in a Chapter 7 bankruptcy. A secured debt is a debt that is secured or guaranteed by property that has been pledged as collateral. Secured creditors are entitled to any property securing a debt of theirs that is part of a Chapter 7 bankruptcy in Owensboro. Before a creditor can take back the property, you have the right to either “reaffirm” the debt or “redeem the property.” To reaffirm the debt, you must enter into a “reaffirmation agreement” with the lender. A reaffirmation agreement obligates you to keep paying your car loan, even after your Kentucky bankruptcy, in exchange for your lender agreeing not to take the car. To redeem the property, you must pay the lender the market value of the car in one lump sum. If you pay this, the rest of the loan is discharged, and the lender must give you clear title to the car. If you don’t want to reaffirm your car loan, or redeem your car, you can simply “surrender” it to the lender and walk away from the car and the high car payment that has been plaguing you. 

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Kentucky Bankruptcy Means Test, Bankruptcy Forms, and Exemptions for Owensboro

Kentucky Means Test

Upsolve CEO and co-founder, Rohan Pavuluri, describes bankruptcy as, “a powerful poverty fighting tool.” This is because filing for bankruptcy in Owensboro can rescue you from a financial crisis before it gets worse, allowing you to preserve the assets you have worked so hard to acquire, without being forced into poverty. Because of this, not everyone who would like to file a Chapter 7 bankruptcy can do so. The Kentucky bankruptcy Means Test is a gauge used by the federal government to determine if your household earns enough income to be able to pay your bills. It does this by comparing your household income with the median income of a similarly sized family in Kentucky. If you earn more than they do, then something known as a “presumption of abuse” arises. It's possible to overcome a presumption of abuse by using a formula developed by the federal government to reduce your income by certain allowable expenses. If this formula is not enough to qualify you for a Chapter 7 bankruptcy in Owensboro, waiting a few months may make all the difference you need, especially if your household income recently decreased significantly. This is because the Kentucky bankruptcy Means Test only considers your household income for the six months before filing bankruptcy in Owensboro. As the months when your income was too high fall outside of that window, your average household income will go down and get closer to the limit, hopefully close enough to overcome any remaining presumption. Just remember, you can always file a Chapter 13 bankruptcy even if you make too much money for a Chapter 7 bankruptcy in Owensboro if your situation will not allow you to wait until you are eligible to file under Chapter 7.

Median Income Levels for Kentucky

Kentucky Median Income Standards for Means Test for Cases Filed On or After May 1, 2020
Household SizeMonthly IncomeAnnual Income
1$3,716.17$44,594.00
2$4,688.08$56,257.00
3$5,561.00$66,732.00
4$6,676.25$80,115.00
5$7,426.25$89,115.00
6$8,176.25$98,115.00
7$8,926.25$107,115.00
8$9,676.25$116,115.00
9$10,426.25$125,115.00
10$11,176.25$134,115.00

Poverty Levels for Kentucky

Kentucky Fee Waiver Eligibility for Cases Filed On or After May 1, 2020
Eligible for fee waiver when under 150% the poverty level.
Household SizeState Poverty LevelFee Waiver Limit (150% PL)
1$1,063.33$1,595.00
2$1,436.67$2,155.00
3$1,810.00$2,715.00
4$2,183.33$3,275.00
5$2,556.67$3,835.00
6$2,930.00$4,395.00
7$3,303.33$4,955.00
8$3,676.67$5,515.00
9$4,050.00$6,075.00
10$4,423.33$6,635.00

Kentucky Bankruptcy Forms

The office of the United States Courts makes all the Kentucky bankruptcy forms you will need available at its website. The forms are listed in alpha-numeric order according to their form number. The most important thing to remember when completing each of your forms is to take your time and answer each question fully and truthfully. When you have completed your Owensboro bankruptcy petition packet and printed your Kentucky bankruptcy forms, you can perform a quick check on your petition by reviewing Form 106Sum – Summary of Your Assets and Liabilities. This form summarizes your assets, your liabilities, and your income and expenses. Quickly look over the summary. If any of the amounts seem too high or too low, double check that section. Often individuals will list the same debt twice or provide the name and address of a creditor but forget to include the amount owed that creditor. These types of mistakes are usually easy to catch, especially if it’s a large amount. For example, if you had a $10,000 medical bill charged off but your total liabilities in Part 2 of Form 106Sum is $9,500, then you obviously forgot to include the charge off. Simple precautions like this before you file Kentucky bankruptcy forms, can save you time, money and frustration after filing bankruptcy in Owensboro.

Kentucky Exemptions

All of the property you disclosed to the Court on Schedule B in your Owensboro bankruptcy petition must be claimed as “exempt” for you to keep it. Exemptions are specific laws that determine what property you can keep when you file bankruptcy in Owensboro and how much of it you can keep. Typically, the law will list a category of assets and the total value covered by the exemption in the category. For example, instead of stating that you can keep one couch and one table; the law states you may keep up to $3,000 in household furnishings. Meaning, you could keep as many couches and tables as you own, as long as you don’t go over $3,000. In fact, in Kentucky before seizing any of your property, the person doing the taking is required to get the property appraised by two impartial people. One of these individuals is picked by them and one is picked by you! Still, most individuals who file bankruptcy in Owensboro choose not to rely on Kentucky bankruptcy exemptions, which can be somewhat limited, and prefer to use the federal federal bankruptcy exemptions, which are much more generous, instead.

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Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations. It's one of the greatest civil rights injustices of our time that low-income families can’t access their basic rights when they can’t afford to pay for help. Combining direct services and advocacy, we’re fighting this injustice.

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