The purpose of this form is to show creditors the dire financial situation that the debtor is in so as to induce the creditors to compromise or write off the debt due.
The Kentucky Debtor's Affidavit of Financial Status to Induce Creditor to Compromise or Write off the Debt which is Past Due — Assets and Liabilities is a legal document that enables individuals in Kentucky to provide a comprehensive overview of their financial situation, specifically pertaining to their assets and liabilities. This affidavit serves as a valuable tool for debtors looking to negotiate with creditors to settle their unpaid debts. The importance of the Debtor's Affidavit of Financial Status lies in its ability to provide creditors with a detailed snapshot of the debtor's financial health and capabilities. By disclosing the debtor's assets and liabilities, the affidavit provides creditors with a transparent understanding of the debtor's ability to repay the past-due debt. This, in turn, influences the creditor's decision to either write off or compromise on the outstanding debt amount. The following are key elements typically included in the Kentucky Debtor's Affidavit of Financial Status to Induce Creditor to Compromise or Write off the Debt which is Past Due — Assets and Liabilities: 1. Personal Information: The affidavit begins by capturing essential personal details of the debtor, such as their full name, contact information, and address. 2. Description of Assets: Debtors are required to provide a comprehensive list of their assets, including but not limited to real estate properties, vehicles, bank accounts, investments, personal belongings, and any other significant assets owned. 3. Assessment and Valuation of Assets: For each asset listed, the debtor must include an estimated current value and any encumbrances or liens associated with them. This helps the creditor understand the liquidity and value of the debtor's assets. 4. Description of Liabilities: Debtors are required to disclose all outstanding debts they are currently obligated to repay, such as credit card debts, loans, mortgage payments, medical bills, and any other debts accrued. 5. Monthly Income and Expenses: The affidavit includes an overview of the debtor's monthly income from all sources, such as employment, business revenue, government assistance, and investments. Additionally, debtors must detail their monthly expenses, including rent/mortgage payments, utilities, transportation, groceries, medical expenses, and any other significant monthly financial obligations. 6. Explanation of Financial Hardship: Debtors are often required to provide a narrative outlining the circumstances leading to their financial hardship, including any unforeseen events such as job loss, medical emergencies, or other significant life events that impacted their ability to honor their financial obligations. It is important to note that there might be variations or alternative versions of the Kentucky Debtor's Affidavit of Financial Status, as different circumstances may warrant different document requirements.
