How To File Bankruptcy for Free in Kentucky

Collect Your Kentucky Bankruptcy Documents

Kentucky bankruptcy laws and procedures require you to file certain documents with the court, whether or not you have an attorney representing you. These include:

• Your last two years of tax returns,

• Your last 60 days of paycheck stubs, and

• A bank statement that covers the filing date.

There are other documents that aren’t required but are very helpful to have.

• Bank statements from the last 6-12 months will help you list your expenses.

• A credit report, which you can get a free copy of every 12 months from each of the three consumer credit reporting agencies, can help you verify your debts and creditors.

• Creditor statements and bills will help you list your debts.

• Letters from collection agencies or other third-party debt collectors are also helpful in listing your debts and creditors.

Take a Credit Counseling Course

Filing Chapter 7 bankruptcy is a serious step and the Bankruptcy Code says you have to take credit counseling before you can actually file. The course usually takes less than two hours and as long as you’re comfortable doing so, you can complete it online. If you’re more comfortable completing this course in person, Goodwill offers the course in the Ashland area, and this nonprofit has in-person options in Florence, Frankfort, and Lexington. Be sure to check before you go to make sure in-person are currently available.

Here are some other important things to know:

• You have to complete the course in the 180 days before you file your case.

• The course isn't free, but you may be able to take it online for as little as $15, or you may be able to have the fee waived altogether.

• You have to take the course from an approved credit counseling provider for Kentucky.

• You need to submit a course certificate to the court along with the rest of the paperwork.

Complete the Bankruptcy Forms

Now that you’ve collected your documents and completed the required credit counseling course, it is time to tackle your bankruptcy forms. These forms are federal, so they’re the same nationwide. All forms are available online for free, and you can access them as fillable PDFs. 

If you’re working with an attorney, they’ll complete the forms based on the information and documents that they collect from you. If you’re filing without an attorney, you’ll have to complete the official forms yourself. In that case, you may be able to use Upsolve’s filing tool to complete your forms. You’ll fill out an online questionnaire, and our software generates the forms based on the information you provide.

Get Your Filing Fee

There is a $338 filing fee for a Chapter 7 bankruptcy. If you can’t afford it, you can request a fee waiver from the court. To qualify for this waiver your income must be less than 150% of the federal poverty guidelines. See the Kentucky Fee Waiver Eligibility table below.

If you need to file quickly but you don’t have the money to pay the full fee, you can make a down payment toward the filing fee and ask to pay the rest in installments. The court will tell you how much the down payment and installments will be. Some filers choose to do this if their wages are being garnished or they’re facing other serious collection actions. That’s because as soon as you file for bankruptcy, an automatic stay goes into effect. This stops wage garnishment and most other collections.

While this is a great benefit, there’s one drawback to paying in installments. If you don’t make your payments as agreed, the court can dismiss your case. So, if you don't have to file quickly, wait until you have the full filing fee so you don’t risk a dismissal later if you’re late with a payment. 

Print Your Bankruptcy Forms

While you can open your Chapter 7 bankruptcy case by filing only the voluntary petition and paying the filing fee, it's better to file all your bankruptcy forms when you open your case. Otherwise, the court may throw out your case if you miss just one of the deadlines for filing the rest of the documents. If that happens, you’ll have to start from scratch and pay the fee again. 

Instead, once you’ve completed the forms, go ahead and print two copies of everything. The Kentucky bankruptcy court will keep the original as your official case documents. The second copy is for you to keep in your own files. 

When you print your forms remember:

• Use regular, white letter-size paper.

• Print in black ink only.

• Don’t print double-sided.

• Sign in all necessary spots.

• Double-check that you have printed everything.

If you use Upsolve to file for bankruptcy, you’ll receive all your forms in a downloadable packet. The places you need to sign will be flagged with a divider.

File Your Forms With Kentucky Bankruptcy Court

Once you’ve printed all your forms and gotten a money order or cashier's check to pay your filing fee (or completed your request to have the filing fee waived or paid in installments), it's time to head to court to officially file your Kentucky bankruptcy. Once at the courthouse, make your way to the clerk’s office. If you bring a second copy of the documents, you can ask the clerk to stamp them with your case number to confirm your case has been filed.

For many people, filing online is a much easier option. Unfortunately, only attorneys are allowed to file online in all jurisdictions at this time. The Western District of Kentucky does allow filing by email, and the Eastern District has implemented virtual filing protocols due to COVID-19. Before you go to court to file your papers, it’s a good idea to check the latest COVID-19 protocols.

Mail Documents to Your Trustee

Upon filing Chapter 7 in Kentucky, the court will assign a bankruptcy trustee to your case. You’ll be provided with the trustee's name and contact information in the court's Notice of Chapter 7 Bankruptcy Case. This is the same document that tells you when and where your creditors' meeting will take place. The trustee's job is to verify the information you provided to the court when you filed for bankruptcy. 

You're required to give your trustee the following documents at least seven days before your meeting of creditors: 

• Your federal income tax return for the last two years, and

• A bank statement that is good through, at the very least, the date you filed for bankruptcy.

Your trustee may also request other documents. If so, you'll need to provide them as well. 

Take a Debtor Education Course

After filing, you’re required to complete a second bankruptcy course. This course is about financial management and debtor education. You need to complete the course and file the certificate of completion with the court within 60 days of your creditor’s meeting. If you don’t, the court won’t enter your discharge, which is the main benefit of filing bankruptcy. It’s the order that gets rid of your unsecured debts. 

Just as with the first credit counseling course, it’s important to make sure that you take it with a company approved by the United States Trustee to offer it in Kentucky. If you liked the company you used for the first course, you can see if it’s approved to offer this one as well. You may even get a discount that way!

Attend Your 341 Meeting

Your 341 meeting (also called the creditors' meeting) is probably the only time you have to go to the courthouse after filing. Keep in mind, all 341 meetings are currently being held via telephone or video conference due to COVID-19. But this hasn’t been adopted as a standard practice. 

The meeting will take place about a month after you file your case. You don't have to do much to prepare for it. As long as you bring your picture ID and appropriate proof of your Social Security number, it will be over before you know it. Creditors can attend the meeting and ask you questions, but that rarely happens. More often than not, the meeting is over after the trustee checks your IDs and asks you some questions about your Kentucky bankruptcy paperwork.

Even though you’re meeting with your trustee and not a judge, you must still arrive on time and dress appropriately.

Dealing with Your Car

Filing Chapter 7 bankruptcy in Kentucky won’t only help get your creditors off your back, it’ll also help you deal with your car in a way that makes sense for you. Consider the following:

• If your car is paid off, then you can keep it as long as it is worth less than the available exemption. In Kentucky, there’s a $2,500 motor vehicle exemption. You can also add to this any portion of Kentucky’s $1,000 wildcard exemption. See more on exemptions below.

• If you’re making payments on your vehicle, your bankruptcy puts you in the driver's seat on what to do about the loan. That doesn't mean that you get to keep your car without paying for it. But it does mean that if your car and your car loan make sense for your budget, you can keep things the same by entering into a reaffirmation agreement. It also means that if your car loan is bad, but you can come up with the money to pay for the vehicle's actual current value, you can just buy it outright by doing something called a redemption. 

• There are options available if your current car is under a lease. 

• If none of the above apply to your situation, you can simply give the car back (voluntary repossession) without having to worry about paying the rest of the loan. You can purchase a new car after bankruptcy.