Kentucky Chapter 12 Hardship Discharge is an option for individuals facing extreme financial hardship who are unable to pay their creditors. It allows them to discharge most or all of their unsecured debts and obtain a fresh start financially. In order to qualify for this type of bankruptcy relief, the debtor must prove that they are unable to pay their debts due to their current financial circumstances. This option is only available to those who have experienced significant financial hardship as a result of unemployment, medical expenses, or other events, and cannot pay their debts in a reasonable amount of time. There are two types of Kentucky Chapter 12 Hardship Discharge: Total Hardship Discharge and Partial Hardship Discharge. A Total Hardship Discharge will discharge all the debtor’s unsecured debts, while a Partial Hardship Discharge will only discharge some debts.
Kentucky Chapter 12 Hardship Discharge
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FAQ
Terminology can get confusing because "hardship" and "dependency" discharges are often both loosely labeled "hardship." Specifically, a hardship discharge is when the financial needs of family member(s) require more than the military member can provide while remaining in the military.
Chapter 12 is designed for "family farmers" or "family fishermen" with "regular annual income." It enables financially distressed family farmers and fishermen to propose and carry out a plan to repay all or part of their debts.
Effective April 1, 2022, a family farmer may file for chapter 12 bankruptcy with aggregate debts of less than $11,097,350. The previous chapter 12 bankruptcy debt cap was $10,000,000. With these changes, more individuals will now be eligible to seek relief under chapter 12 and chapter 13 bankruptcy.
A Chapter 12 case will be closed once the debtor has completed their required payments to the trustee. The court will grant a discharge that frees the debtor from liability for most debts not covered by the repayment plan.
Debt Repayment ? Chapter 12 allows debtors to cram down debts ? pay the current market value of a property instead of the whole debt ? on almost all secured debt. Conversely, in a Chapter 11 case, you will make all required payments in the reorganization plan until you get a discharge.
Advantages of Chapter 12 Bankruptcy No means test or credit counseling requirement like those in a Chapter 7 case. Assets are not at risk of liquidation. Monthly payments can accommodate seasonal earning trends and do not need to be equal. No anti-modification provision on home mortgages.
Perhaps most significantly, chapter 13 offers individuals an opportunity to save their homes from foreclosure. By filing under this chapter, individuals can stop foreclosure proceedings and may cure delinquent mortgage payments over time.
The Chapter 12 Discharge Those creditors who were provided for in full or in part under the plan may no longer initiate or continue any legal or other action against the debtor to collect the discharged obligations. Certain categories of debts are not discharged in chapter 12 proceedings. 11 U.S.C.