Do You Need Help Filing For Bankruptcy In Indiana
While you could try to save money and file for bankruptcy on your own, it can be a complex process and it is recommended that you find a local bankruptcy attorney to guide you through it. A lawyer will also represent your interests before the court and negotiate with creditors. An experienced bankruptcy lawyer will know how to work within the bankruptcy process to protect as many of your assets as possible.
Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts , ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law you are researching.
Before Filing A Bankruptcy Petition
Though bankruptcy filings are sometimes the best way to resolve debts, they are not the only alternative. Before deciding if you should file for bankruptcy, consider steps to resolve your debt. Then speak with an attorney to determine if bankruptcy is right for you. Each of these alternatives has its own set of pros and cons and only an attorney can advise you as to the best course of action in your particular case.
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Northern District Of Indiana Requirements
Indiana’s Northern District covers northern Indiana and has offices in South Bend, Fort Wayne, Hammond and Lafayette. The court’s website has a tool to determine where to file your Chapter 7 bankruptcy in Indiana based on your zip code. If you file in the Northern District after a creditor has sued you in state court, local rules require that you give written notice to the state court once your case has been filed.
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When You Can Use Indiana’s Bankruptcy Exemptions
You can file for bankruptcy in Indiana after living there for over 180 days . But before using Indiana’s exemptions, you need to live in Indiana for 730 days before filing for bankruptcy. Otherwise, you’d use the previous state’s exemptions.
For example, suppose you weren’t living in any one state during the two years before filing for bankruptcy. In that case, you’d use the exemptions of the state you lived in for most of the 180 days before the two-year period that immediately preceded your filing. .)
Secured Vs Unsecured Debt
Filing for bankruptcy will let you resolve your debt issues, but not all of your debt will be treated the same way. In most cases, your debts will be given one of two labels: secured or unsecured. How your debt is classified will often dictate what type of bankruptcy you choose and how much of your debt you can discharge.
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The Automatic Stay Protects You From Creditors
When you file for bankruptcy under either Chapter 7 or Chapter 13, the court will issue an automatic stay that should stop all efforts to collect debts from you. The automatic stay is a powerful tool that forces your creditors to work with you in the bankruptcy process by giving them no other options for collecting what you owe them.
The stay stops harassing phone calls, foreclosure actions, and even court cases against you. If one of your creditors knowingly violates the stay and contacts you directly, the judge can impose penalties on the creditor, including paying your attorneys’ fees.
Alternatives To Filing Chapter 7 Bankruptcy
If you are wondering if you should file for bankruptcy, there are many nonprofit consumer credit counseling organizations that have the ability to negotiate more favorable terms with creditors. Its particularly effective with credit-card companies. The repayment program will be managed expertly and fees could be avoided.
Here are some options:
Debt Management Plan Entering into a debt management program can provide relief from interest rates, late fees and penalties from creditors. Under a DMP, which is negotiated by credit counselors, you promise to pay back the full principal over time in an efficiently managed manner.
The debt management program provides an organized monthly payment plan. It provides an opportunity to handle the debt more efficiently than trying to sort it out yourself. By keeping the payments on track, it will be good for your credit score.
Some caveats: There is generally an enrollment and maintenance fee and the DMP is never a guaranteed option. Creditors have no obligation to participate.
Debt Consolidation This option reduces interest rates and combines all of your debts into one manageable monthly payment. Under debt consolidation, you take out a loan, which is used to consolidate and pay off all of your other debts.
Personal Loan for Bad Credit Yes, you can get a personal loan with bad credit, depending on your situation. You can expect high interest rates and should only consider this option if you can truly afford the monthly payment.
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What Is Chapter 7 Business Bankruptcy
Chapter 7 business bankruptcy is designed for businesses that cannot repay their debts because they can no longer maintain operations and earn revenue. The company shuts down so the court-appointed trustee can liquidate its assets and repay the creditors. All directors and employees are dismissed.
The liquidation process is pretty simple. Most Chapter 7 filers owe debts to multiple creditors. Thus, the trustee divides the businesss assets to compensate each creditor for the amount owed. Thanks to federal and state bankruptcy exemption laws, creditors cannot seize certain types of personal assets. For example, you probably wont have to give up full ownership of your home or vehicle under Chapter 7 bankruptcy.
Though all business entities can legally file Chapter 7, most filers are reportedly sole proprietors. This is because only sole proprietors are eligible to receive whats known as a debt discharge after filing Chapter 7. If you are discharged from a business debt, you will no longer be responsible for paying it back, even if the original agreement included a personal guarantee. Thus, the creditor cannot seize your personal assets.
Discharges are not available to corporations, LLCs, and partnerships. When owners of these business entities sign a personal guarantee on a loan, filing for Chapter 7 wont protect them from having their personal assets seized if they cant pay off the debt.
Chapter : An Overview
How does the Means Test work?
The Means Test is the method to see if you qualify to file a Chapter 7 case based on your household income. Chapter 7 is intended for low-income people who cannot afford a payment plan.
In order to file under Chapter 7, you either need to show that your household is below your states median income or- that your expenses exceed your income to the point where it justifies a bankruptcy case. So, what does that mean exactly?
- You make below your states Median Income. This calculates any regular income coming into the house . So, if your household income for the past six months is below the states median income , you will likely qualify for a Chapter 7 case.
Above Median Income? Theres a chance you could still qualify!
- Your expenses far exceed income. If youre above the Median Income, you can employ the Means Test to see if you can still qualify. Here you will calculate how much you have left over at the end of the month. If your expenses are far more than your income each month, you could still qualify for Chapter 7.
However, if there is enough disposable income at the end of the month you could be pushed into a Chapter 13.
Which Goes First: Divorce or Bankruptcy?
It depends. Deciding when to file will depend on multiple factors particularly whether you want to file with you or without your spouse. Below well discuss some of the things to consider when deciding whether to seek divorce or bankruptcy first.
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Sawin & Shea Indianapolis Bankruptcy Attorneys
Filing for bankruptcy is not the end. Its the beginning of a new financial life for you. The Indiana bankruptcy attorneys at Sawin & Shea can help you get rid of the overwhelming debt and advise you on life after bankruptcy. We are here for you during this life-changing process. Please do not hesitate to call us today at 317-759-1483 or send an email for a free consultation. We are ready to help.
What Is Business Bankruptcy
The type of bankruptcy that most people think of when they hear this word is Chapter 7. Filing for Chapter 7 bankruptcy usually results in liquidation. Business assets are distributed to creditors, so the business shuts down. This is the most common and least favorable type.
On the other hand, Chapter 11 and Chapter 13 do not share this reputation. These two usually result in the reorganization or consolidation of the businesss debts. Plenty of companies have filed for Chapter 11 or Chapter 13 while maintaining operations and are even alive and kicking today.
The type of bankruptcy you file for depends on your businesss debt and overall financial health.
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Bifurcation Of Marital Status
Bifurcation means that both parties in a divorce can legally declared as a single person while the other issues in their divorce are still being worked out. It does not affect things such as child custody, visitation, child support, alimony or other contentious issues that may have stalled or become major sticking points that are keeping the divorce from being finalized. These issues are set aside and decided separately at a later date.
Bifurcation of marital status is allowed in Indiana, but state law requires that both parties file a joint motion to bifurcate a marriage.
How Your Chapter 13 Payment Plan Works
Your Chapter 13 Bankruptcy plan will propose an amount that you will pay back to creditors and will state the amount of time in which you will pay back the amount. The amount that you will propose to pay back to creditors can range from 0% to 100%. Once your bankruptcy case is filed the first plan payment is due 30 days after the case is filed. The trustee appointed to your bankruptcy case will distribute payment to your creditors.
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Why Was Chapter 13 Added To The Bankruptcy Code
Congress added chapter 13 to the Bankruptcy Code in an effort to help debtors protect their assets from liquidation under chapter 7 and to insure that available bankruptcy proceedings would provide debtors with a fresh start after the bankruptcy process. Bank One, Chicago, NA v Flowers, 183 Bankr 509, 514 .
What Does The Indiana Homestead Exemption Protect
The Indiana homestead exemption protects a certain amount of equity in your home. An individual can exempt up to $19,300 in real estate or personal property that is used as your place of residence . Also, if the debtor owns any interest in a piece of real estate that is held as a tenant by the entirety that property is exempt . Tenant by the entirety ownership is reserved for married couples and it protects any equity in the home from debts owed by only one spouse.
Indiana does not have a specific motor vehicle exemption, but an individuals vehicle can be protected under other state exemptions. Indiana allows debtors to use Indianas Wildcard exemption to protect equity in their car, truck, van, or any other vehicle they own. The Indiana Wildcard exemption permits a debtor to protect any non-residential real estate or tangible property of their choosing up to a value of $10,250.
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How Do I Start Bankruptcy In Indiana
Before you can file for bankruptcy, you will be required to take a credit counseling course. The course is designed to help you assess whether you can pay back your debts outside of bankruptcy. Additionally, if you are filing under Chapter 13, you may be required to prepare a repayment plan to submit to the court. When you file for bankruptcy, you must include a certificate showing you completed the course within 180 days of filing.
If you file for bankruptcy using an attorney, he or she will normally file on your behalf. However, if you are filing on your own , you will start by downloading the correct forms for your bankruptcy court.
If you are unsure as to whether you reside in Indiana’s northern or southern district you can search for âU.S. Bankruptcy Courts” in the federal court finder to locate the correct district.
Qualifying For Bankruptcy In Indiana
If you’ve never filed for bankruptcy before, you’ll meet the initial requirement. Otherwise, check whether enough time has passed to allow you to file again. The waiting period varies depending on the chapter previously filed and the chapter you plan to file. Find out how long you’ll need to wait if your situation involves multiple bankruptcy filings.
You’ll also need to meet specific chapter qualifications.
You’ll qualify for Chapter 7 bankruptcy if your family’s gross income is lower than the median income for the same size family in your state. Add all gross income earned during the last six months and multiply it by two. Compare the figure to the income charts on the U.S. Trustee’s website .
Want an easy way to do this online? Use the Quick Median Income Test. If you find that you make too much, you still might qualify after taking the second part of the “means test.” If, after subtracting expenses, you don’t have enough remaining to pay into a Chapter 13 plan, you’ll qualify for Chapter 7.
Qualifying for Chapter 13 can be an expensive proposition because the extra benefits come at a hefty price, and many people can’t afford the monthly payment. To qualify, you’ll pay the larger of:
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Chapter 7 Vs Chapter 13 Bankruptcy
Almost every personal bankruptcy is filed under either Chapter 7 or Chapter 13 of the Bankruptcy Code. Filing for either will help you resolve your debt problems, but each chapter does it differently. Which one you should choose is often driven by your financial situation and whether you want to keep your assets.
Chapter 7 bankruptcy is often called a âliquidation bankruptcy” because if you file under that chapter you must turn over most of the assets that are not protected by an exemption to a bankruptcy trustee appointed by the court. The trustee will then sell your property to repay your creditors. In return for giving up your non-exempt assets, the court will usually discharge nearly all of your debts. To file under Chapter 7, your income must be below certain levels.
Chapter 13 will let you reorganize your debts so that you can pay them off over three to five years under a court-approved repayment plan. To file under Chapter 13, you need to show the court that you have enough income to make the payments under your plan.
The court can force your creditors to accept your Chapter 13 repayment plan and even force them to accept less than they are owed. If they have a choice, homeowners usually choose to file under Chapter 13 because they can usually keep their homes.
Bankruptcy News For Vanderburgh County In
- Sh*t Happens… That’s Why There’s Bankruptcy Most Americans are just one catastrophic event away from financial ruin. Sometimes a life event happens to us…. And it can overwhelm us with debt. But, fortunately, that doesn’t mean your life is ruined forever. In fact, that’s exactly why bankruptcy law was created!
- From Adversary proceeding to Wage garnishment
- Means Test Calculator for Vanderburgh County The Means Test Calculator is an automated version of the official three-part test form. Just choose your zip code, and the calculator applies the relevant state median income and county living standards, based on the number of persons in your household, your marital status and what county you live in.
- Means Test FAQ The bankruptcy means test was added to US bankruptcy law in 2005 as part of the credt-card-industry sponsored bankruptcy law to weed out so-called “bankruptcy-abusers” — hence the language about a “presumption of abuse” .
- Line by Line Help for the Bankruptcy Means Test The official position of the U.S. Trustee’s office of how to interpret issues arising in each line of the means test.
- The US government makes PDF bankruptcy forms available for free. We’ll tell you which ones you need and links to download them.
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Pensions Iras 401ks And Retirement Plans
All pensions, IRAs, 401Ks and retirement plans are treated as marital property in Indiana and subject to equitable distribution laws.
It may be possible to keep the entire amount of your pension is exchange for giving up the rights to other high-value assets, such as a home. You need to consider that an equitable distribution may not always result in a 50-50 split.
Legally splitting pensions and other retirement funds is a multiple step process. After the divorce decree or dissolution of marriage has been issued, an attorney or a specialized firm must create a qualified domestic relations order, more commonly referred to as a QDRO.
The QDRO must be approved by the courts and then it can be submitted to the plan administrator who must also approve it. This establishes that a spouse can be considered an alternate payee, and the retirement vehicle is then divided according to the specifics contained in the QDRO.
Want to get a QDRO online? Weve got you covered! We highly recommend you look at QDRO Counsel to facilitate drafting your QDRO online.