Bankruptcy Chapter 7 Indiana

What’s ahead when it comes to bankruptcy in Indiana?   In fact, what’s going on around our country?  (It’s easy to understand why I, as a debt consolidation lawyer offering Indiana bankruptcy help would be interested in statistics about bankruptcy, but why would you, readers of these Bankruptcy in Indiana articles, care about anybody else’s bankruptcy but your own?)

Well, for a number of reasons.  Remember the “ripple effect” I’m always discussing, the one where a company has financial problems and lays off employees?  Those employees then have no money to buy stuff, so the small business owners in the area are hurt.  Problems – and solutions to problems – are contagious.  Knowing what’s going on around you keeps you prepared to deal with whatever life dishes up. That’s why I think it’s so important for me, in these Bankruptcy in Indiana articles, to stay on top of news from around the globe and to encourage all my colleagues the Bloomington, Anderson, Indianapolis, and Columbus bankruptcy lawyers to read everything they can get their hands on and then share information.

Take the item from the Milwaukee Business Journal, for example, reporting that eastern Wisconsin bankruptcy filings declined by 7% in 2011, while at the same time quoting a local attorney who believes filing personal bankruptcy will increase in 2012, because people remain underemployed and because many homeowners will not be able to arrange mortgage modifications on their homes.

In our own four Zuckerberg bankruptcy law offices, we work hard to help people negotiate mortgage modifications, but the fact remains that Chapter 13 bankruptcy law in Indiana has proven to be a much more effective tool to help stop foreclosure.

A second article out of Washington State also notes that bankruptcy filings appear to have slowed down a little, but that a future jump is expected as bank try to recoup their losses from some of the foreclosures.

The statistics tell us there were 22754 cases filed in Southern District of Indiana in 2011, compared with 27394 the prior year.  But, as someone who’s helped tens of thousands of Indiana debtors make a fresh financial start by filing individual bankruptcy in Indiana, I believe we’re not nearly out of the woods yet.

An Indiana University study says that 46 million Americans are living below the poverty line, and that those numbers will continue to rise.  Although the recession is officially over, the scarcity of well-paying jobs will have the effect of increasing poverty levels.

Predictions won’t help you individually, but what I’m hoping is that knowing how widespread the problems are will help you realize that time is on your side only if you, early on, seek help in exploring different options. No, you may not be ready to actually file personal bankruptcy in Indiana or small business bankruptcy in Indiana, but, are you ready to get your own personal statistics (your “ducks”) in a row, ready to handle whatever the new year brings?

Just two weeks ago, I gave Bankruptcy in Indiana readers a Mark Zuckerberg tip-off – a piece of Indiana bankruptcy information that had to do with a tax break.

I’ve been a debt consolidation lawyer practicing Indiana bankruptcy law for 25 years, but only in the last five of those years has there been this tax break when it comes to foreclosure.  To us in the Zuckerberg bankruptcy law offices, the reason we're interested is that we Indiana bankruptcy attorneys have worked very hard, within the new bankruptcy laws of indiana, to help stop foreclosure on clients' homes.

Knowing how important it is to many single moms and parent couples to keep their children from having to change schools, we do our best to negotiate mortgage modifications.  But, as one of the Columbus bankruptcy lawyers who is my colleague puts it, there’s nothing simple about that process!

The other day I read in USA Today how every government program designed to help Americans keep their homes “has fallen far short of goals.”  HAMP, which was supposed to help 3-4 million people, has resulted in only 800,000 modifications.  One of my Bloomington  bankruptcy lawyer colleagues quoted the Federal Reserve Government officials, who plan on fining mortgage servicers because they’re doing such a poor job. We KNOW they are – our own efforts to help stop foreclosure are being met with lost paperwork and incompetent customer service. Very occasionally, the very fact that an attorney is involved helps hurry things along a bit.

The silver lining, though, is this tax break I’ve referred to.  Yes, Chapter 13 bankruptcy in Indiana can itself help stop foreclosure.  But, even in a worst-case scenario where a foreclosure cannot be prevented, the tax forgiveness which applies to mortgage debt during calendar years 2007-2012 only means that debt discharged through foreclosure (like debt discharged through bankruptcy Chapter 7 in Indiana or under Chapter 13 bankruptcy law) will not be considered taxable income.

In short, because of this temporary “break”, the combination of Indiana personal bankruptcy AND foreclosure in 2012 can increase the level of assets you’re allowed to keep.  The overall goal of bankruptcy in Indiana, remember, is for debtors to have a chance at a fresh financial start!

Not everyone qualifies to file under chapter 13 bankruptcy law in Indiana. But, as BankruptcyAction.com points out, there are several reasons why people choose Chapter 13 over Chapter 7 when given the choice.  As for me, a debt consolidation lawyer offering Indiana bankruptcy help, whenever it’s important for a client to save a home and help stop foreclosure, I choose Chapter 13 bankruptcy as the perfect tool for the job.

Here are just a few of the situations when you as a debtor might opt for Chapter 13:

• You think it’s the “right thing to do”, to make every attempt to pay your own debts – you just need more time.
  
• You’re behind on your mortgage or car payments and need time to make up the missed payments without late fees and interest making that ever more impossible. This is one piece of bankruptcy information in Indiana I believe is so important to convey to consumers, and that’s why I keep coming back to this idea in these Bankruptcy in Indiana articles.
  
• You have valuable pieces of property (could be a home or it could be other property that is not exempt under bankruptcy Chapter 7 in Indiana).
  
• You filed a Chapter 7 within the past eight years.
  
• You have a big federal tax debt.

All of the Columbus bankruptcy lawyers who are my colleagues, along with the Indiana bankruptcy attorneys who work in the Zuckerberg bankruptcy law offices in Indianapolis, Bloomington, and Anderson, Indiana use Chapter 13 to accomplish things that cannot be accomplished under bankruptcy Chapter 7 in Indiana.  Chapter 13 is sometimes referred to as the “bill consolidation: version of bankruptcy or the “wage earner’s bankruptcy plan”.  Under the new bankruptcy laws of Indiana, one of the main things that Chapter 13 accomplishes is saving homes. 

How does Chapter 13 help stop foreclosure? When you’re behind on house payments, sooner or later (unfortunately it’s usually sooner), your lender or mortgagor is going to take legal action to collect what you owe, or threaten to evict you from the house and take the property back.  If you can file individual bankruptcy in Indiana using Chapter 13 bankruptcy law, and if you do it prior to the sheriff’s sale of your home, the bankruptcy court can cancel your mortgage debt (this is particularly true of a second mortgage or home equity loan) or give you the opportunity to stop the foreclosure and make the missed back payments over time.

Can you see why, over my 25 years practicing Indiana bankruptcy law, I consider myself as part of the Chapter 13 home rescue squad?

Over the 25 years I’ve served as a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I’ve seen many changes in the law, many political figures’ rise and fall, and debates going on in national, state, and local politics. It’s been only in recent months, however, that so much debate has centered around military benefits for U.S. veterans


Every good lawyer for bankruptcy in Indiana has been faced with the realization that serving our country can lead to a fight for veterans’ financial life once they’re back home. Finding well-paid employment and good housing, plus managing debt repayments are all issues for many veterans and their families.

The big debate raging in Congress for the past half year has been about cutting the deficit. Now, even though I’ve actually appeared before Senate subcommittees to discuss bankruptcy law, my intention in this Bankruptcy in Indiana article is not to get involved in politics, but to make readers aware of the very-much-in-the-news debate about military benefits.

As my colleagues the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers all know, there’s been a big increase in the last few years in military foreclosures. This is happening despite many special protections that are in place for active service members and for veterans, including lowering the interest rates on their mortgages and reducing their monthly payment amounts. Our bankruptcy laws make special allowances for veterans, allowing them to have higher incomes and still qualify to file Chapter 7 bankruptcy in Indiana, for example.

The headline issue we’re reading about these days is not about those special benefits, but about thelifetime health care, called TRICARE, now provided to veterans. Due to the budget crunch, there is now talk of having veterans pay more for these health benefits.

Where do I weigh in on all of this? For all these years of practicing Indiana bankruptcy law, I’ve made it a mission to prevent service members from being evicted from their homes, and provide payday loan debt help (that trap is particularly prevalent among service members). I continue to try to guard the financial interests of Indiana Guardsmen and their families.

At the four Zuckerberg bankruptcy law offices, we continue to fight the good fight on behalf of veterans, grateful for the safety net of bankruptcy in Indiana!

Even with thousands of copies of my book “Top Ten Myths About Bankruptcy in Indiana”  circulating around the state, when people have financial troubles, they don’t always think straight, I realize.

So when one of the Anderson bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices there emailed me a newsletter from Palm Harbor, Florida, warning against common mistakes people making before filing bankruptcy, I decided my Bankruptcy in Indiana readers needed a review “lesson”.


Palm Harbor Patch Bankruptcy “No-No” #1: Transferring property to family and friends, expecting to get it back when you’re done with the personal bankruptcy in Indiana. Fact: if you transfer property to anyone, the bankruptcy trustee can go after that person.  What’s more, as all good lawyers for bankruptcy in Indiana know, the “look-back” can go back to the four years leading up to the bankruptcy.

Palm Harbor Patch Bankruptcy “No-No” #2:  Max-ing out all your credit cards right before bankruptcy. If the bankruptcy court realizes you’ve borrowed money with no intention or ability to repay that money, it may hold you responsible for those debts even after the bankruptcy is over!  That principal holds true for bankruptcy Chapter 7 in Indiana, as well as for Chapter 13 bankruptcy law.

Palm Harbor Patch Bankruptcy “No-No” #3: Cashing in your IRA or 401K to pay bills, hoping to avoid filing bankruptcy.  “Your IRA and 401(k) are among one of your most protected assets in a bankruptcy proceeding. In almost all circumstances,” explains Palm Harbor Patch. Your 401(k) is exempt from the bankruptcy estate — you get to keep it after bankruptcy. Your basic IRA is exempt up to $1 million.

There are many common misunderstanding and mistakes, but those are three of the more common no-no’s.  The most important thing is to ask for help – help to stop foreclosure, student loan debt help, payday loan debt help, or help figuring out which type of individual bankruptcy in Indiana best fits your situation. 

At the Zuckerberg bankruptcy law offices, consultations cost nothing.  Mistakes?  Now THOSE can be very expensive!

At the four Zuckerberg bankruptcy law offices, many of the questions we’re asked center around income and credit ratings. People are worried about the effect filing individual bankruptcy in Indiana might have on their credit score.

As a debt consolidation lawyer for 25 years, I've learned that many clients find it hard to believe - income basically isn’t even considered as part of a credit score! Lenders use credit scores, of course, to decide whether to loan money to you, and whether to charge you whatever the standard interest rate is at that time, or to charge more.

The FICO score developed by Fair Isaac program, depends on information Fair Isaac gathers from the three main credit bureaus, Experian, TransUnion, and Equifax. The basic weighting formula is this:

• Payment history accounts for 35% of the rating.
  
• Length of credit history accounts for 15%.
  
• New credit, types of credit used, and debt totals account for 10% each.

As WorldBookandNews.com notes, “Income is not a factor”.

By contrast, as all good bankruptcy attorneys in Indiana know, income is a very big factor when it comes to filing bankruptcy, particularly if you’re filing under Chapter 13 bankruptcy law in Indiana.  In offering bankruptcy services in Indiana, I need to be sure my clients have sufficient regular income coming in to make monthly debt repayments over a three to five year period of time.

Let’s face it – for most people who decide to seek Indiana bankruptcy help, their credit rating has probably already suffered. One of my Columbus bankruptcy lawyer colleagues often shocks clients by saying “Want to fix your credit?  Start with a bankruptcy!”  What she means is that filing personal bankruptcy in Indiana can turn out to be the first step in rebuilding credit, not overnight, to be sure, but over the next few years.

How can that be? Well, to put yourself in a position where you can demonstrate you’ll be able to pay back new loans, you must get rid of some of the debt you already have. Bankruptcy in Indiana helps you do that.  Bankruptcy Chapter 7 in Indiana, if you qualify, is the fastest way to get rid of unsecured debts. But even using the new Chapter 13 bankruptcy laws in Indiana, some of your debt can be forgiven, freeing you to devote your income to getting rid of the rest

Income may not directly affect your credit score, but when it comes right down to it, income is pretty important in rebuilding credit after emerging from bankruptcy in Indiana!

Sharing Indiana bankruptcy information sometimes involves using examples from other states.  And even though the Zuckerberg bankruptcy law offices serve only Hoosier debtors and their families, bankruptcy laws are constantly being refined as different situations come up across the country.

In fact, that’s one of the reasons all good bankruptcy attorneys in Indiana read professional journals.  The other day, one of the Columbus bankruptcy lawyers who is my colleague called my attention to an article in Consumer Bankruptcy News, about a bankruptcy court that dismissed a bankruptcy Chapter 7 case on the grounds that the couple did not qualify to file that kind of bankruptcy.

These debtors owed an awful lot of money - millions of dollars, actually, in unsecured debt.  The issue – they also had a lot of money coming in from their joint medical practice and lived a very high lifestyle (at least, in the judgment of the court). Since my goal in these Bankruptcy in Indiana articles is not only providing Indiana bankruptcy information, but also giving readers a better understanding of the whole idea behind the bankruptcy system, I thought this particular Michigan case would help in that regard.

As a longtime debt consolidation lawyer offering Indiana bankruptcy help, I realized right away that the couple in this real-life story, Dr. M. and Dr. A, had done several things “wrong”, which explains why the bankruptcy court rejected their petition.

• They didn’t disclose all the facts.  For instance, they did not put down in their bankruptcy paperwork that their medical practice provided them with two cars.  They didn’t tell the court about the $1000 per month payments they were making to support their niece.
  
• They didn’t show the court that they were trying to reduce spending. The bankruptcy judge noted that they needed to take steps to reduce their year expenditures, so that the money could go towards paying down their debt. 
  
• They mixed their business affairs with their personal affairs.  The debtors claimed that most of their debt was related to failed real estate investments, and that those were business debts. Therefore, they argued that they shouldn’t be expected to reduce their personal lifestyle to pay those debts.

As a longtime lawyer for small business bankruptcy in Indiana, I find this error in thinking is common.  There is no protection from creditors, no separation when it comes to legal matters (such as bankruptcy in Indiana)  when business owners mix their financial affairs with those of their business.

The court’s recommendation to the couple was that they reduce their personal spending by 50%, file a five year Chapter 11 bankruptcy plan that would pay their creditors at least a significant portion of what was owed.

Filing personal bankruptcy in Indiana is probably on no one’s Favorite Things To Do list, but, under certain circumstances, it might actually make sense to do it twice!

With four Zuckerberg bankruptcy law offices serving 60 different counties, my colleagues the Anderson, Indianapolis, Bloomington, and Columbus bankruptcy lawyers and I encounter all sorts of situations.  So, when does it make sense to file one type of individual bankruptcy in Indiana and then, not too long afterwards, to file another?

To answer that question, we first need to look at the one main purpose for each bankruptcy.  There may be more than one benefit to be gained under the new bankruptcy laws of Indiana, but most debtors who file bankruptcy Chapter 7 do it to get debt ”discharged” or forgiven by the court.

However, debtors could file bankruptcy just for the “stay of it”.  One immediate effect of filing bankruptcy is the Automatic Stay, which halts all legal and debt collection actions, buying time for debtors to catch their breath, to plan and strategize.  In fact, after 25 years as a debt consolidation lawyer offering Indiana bankruptcy help, I can tell you that all my clients report that the relief they feel when the harassing phone calls and letters stop is enormous.

When I talk about two bankruptcy filings by the same debtor, that usually means bankruptcy Chapter 7 first, then, after that’s concluded, filing under Chapter 13 bankruptcy law in Indiana.

What’s the point of the “double”? Debts over certain limits can disqualify a person for Chapter 13 bankruptcy.  Yet only Chapter 13 can help stop foreclosure.

Here’s where having an experienced attorney on your side can make a big difference, fitting the tactic to the situation.  Through Chapter 7, unsecured debts can be discharged, bringing debt levels down enough to qualify for a Chapter 13.  That, in turn, could allow for a longer-term solution to the mortgage problem. 

This is where the TV announcer would warn viewers “not to try this at home”. It takes very detailed knowledge of both the debtor’s situation and of Indiana bankruptcy law to suit the two-bankruptcy strategy to the individual situation.

Given the right circumstances, two can in fact be better than one!

Since I’m a debt consolidation lawyer, clients will often ask for my help with their financial affairs.  That’s true even if they aren’t planning to file personal bankruptcy in Indiana.  Quite often, though, I find it necessary to issue an important caution:

If you get to the point where filing individual bankruptcy in Indiana does appear to be your only viable option, you’d better avoid borrowing money for six months before you file.

It’s counter-intuitive, I know.  People don’t want to get to the point of filing bankruptcy, so they keep trying to keep their financial “boat” afloat by using credit cards to pay for everyday expenses and even get to the point of needing payday loan debt help.

The problem is (and every good bankruptcy attorney in Indiana knows this one well) – in most cases, debt incurred during the six months preceding a bankruptcy filing can be excluded from being discharged or forgiven through bankruptcy (if the creditor can prove fraud).

Obviously there are extenuating circumstances.  One of the Columbus bankruptcy lawyers in the Zuckerberg bankruptcy law offices recently worked with a single mom who’d bought a new washer and a new bed for a child.  Two months later, the mother lost her job.  She became so stressed out that she fell and broke a bone.  Now she had medical costs she couldn’t handle. She couldn’t make the minimum payments on the credit card she’d used for the washer and some of the hospital bills. However, the debt she incurred through the purchase of the washer and the payments to the hospital were allowed to be included in her bankruptcy (since at the time of the purchase there was no fraudulent intent - the mom didn't know she would lose her job or fall!).

The point I’m trying to drive home to Bankruptcy in Indiana readers is how crucial it is to seek the help of an experienced Indiana lawyer for bankruptcy at the first signs of financial trouble. 

That way, if filing either bankruptcy Chapter 7 or filing under Chapter 13 bankruptcy law is in the cards, you won’t have sabotaged your own case by making borrowing mistakes!

Often, in these Mark Zuckerberg Bankruptcy in Indiana articles, I refer to the “bankruptcy court” or the “bankruptcy judge”. 

Truth is, though, that of the tens of thousands of people to whom I’ve offered Indiana bankruptcy help over the past 25 years, only a handful ever got to see a bankruptcy judge or “go to court” in the way we see in criminal cases on TV.  As all my colleagues in the four Zuckerberg bankruptcy law offices will confirm, most of your contact is with your Indiana lawyer for bankruptcy.

As your Indiana bankruptcy attorney, after I’ve helped you complete your financial statements and you’ve signed them, I submit those to the court on your behalf.  The only time you yourself would expect to be anywhere near an actual courtroom is at the bankruptcy creditors’ meeting, which might not even be held at the courthouse itself. (I’ll be explaining more about what happens at the creditors’ meeting in my next article.)

I can assure you, based on my experience as a debt consolidation lawyer offering bankruptcy services in Indiana, that even at the creditors’ meeting itself, you will not be facing a judge. Instead, the meeting is run by a trustee.  If you’re filing bankruptcy Chapter 7 in Indiana, the person in charge is called an Interim Trustee; if you’re filing under Chapter 13 bankruptcy law in Indiana, there will be a Standing Trustee.

The trustee is going to be in charge regardless of whether you're filing because you need payday loan debt help, help to stop foreclosure, help with medical debt, or even student loan debt help.  I will be working with you to prepare the petition, but the process itself is very standard.

The trustee is generally an attorney from the local community, working under the supervision of a U.S. Trustee connected with that region.  As an Indianapolis lawyer for bankruptcy, for example, I work within the Southern Indiana Bankruptcy District.
Once your bankruptcy petition has been approved, the trustee will be managing and overseeing the process.  You no longer need to deal with your creditors, who will be notified that you’ve filed personal bankruptcy in Indiana, and that they are to halt all collection efforts against you.  All that is handled by the trustee.

So, with whom can you expect to “hobnob” during the process of filing bankruptcy in Indiana? Briefly, with the bankruptcy trustee who is managing your case.  Most of the time, you’ll be dealing with an Indiana lawyer for bankruptcy like me!

At the Zuckerberg bankruptcy law offices, we’re all about people and about numbers, in just that order.  While statistics can sometimes be of help to me in understanding trends and in predicting how a bankruptcy Chapter 7 petition is likely to be received by the court, the  truth is each couple, each individual, each small business is unique.

I think the main reason it’s important for me to share statistics about individual bankruptcy in Indiana is so that clients won’t feel they’re the only ones that are going through financial difficulties.  The reason that’s important, in turn (I’ve learned over 25 years of practicing Indiana bankruptcy law), is so you’ll stop wasting energy on “shame and blame” and get down to business.  You’ll move forward, I hope, with the decisions that will lead you towards that fresh financial start you need and deserve.

“Who” statistics:
Statistics published by the Administration Office of the United States Courts show that debtors who file personal bankruptcy represent all age groups, from under 20 years old to seniors, with the majority being in their 40’s. In my own 25-year long practice of Indiana bankruptcy law, I’ve helped tens of thousands of debtors, with many being older, some much older than 50.

“Why the problem” statistics:
Yahoo!Finance lists the “top 5 reasons people go bankrupt”:

• Medical expenses
• Job loss
• Excess use of credit
• Divorce or separation
• Unexpected expenses, including theft, accidents, natural disasters

Actually, these same reasons account for many instances of small business bankruptcy in Indiana, I’ve found.
http://finance.yahoo.com/news/pf_article_109143.html

“Why the people” statistics:
NewJerseybankruptcycenter.com lists more top reasons people choose to file:

• To help stop foreclosure
• To prevent repossession of a car
• To restore utilities or prevent shutoff
• To provide student loan debt help
• To stop wage garnishment
• To deal with a lawsuit

Bankruptcy statistics are not the happiest of numbers, that’s for sure, although this year’s numbers are looking somewhat better than last years in the Southern Bankruptcy District of Indiana (in which I, along with my Anderson, Indianapolis, Bloomington, and Columbus bankruptcy lawyer colleagues practice). Overall bankruptcy in Indiana decreased 14% this year, making us #7 in the nation in overall 2011 filings, #6 in the nation for filing  bankruptcy Chapter 7 in Indiana.

There may be solace in statistics in that you’re hardly alone.  The only numbers that matter, though, are your numbers, and the only thing that matters is turning negatives into positives – for you – in filing personal bankruptcy in Indiana!.
 

If you’re a handyman (or woman), you know how important it is to use the right tool for the right job. Chapter 13 bankruptcy law in Indiana is a tool designed to help stop foreclosure.

Do you go straight for that tool at the very first sign of a problem keeping up with your mortgage? Of course not.  This is my 25th year as a debt consolidation lawyer offering Indiana bankruptcy help.  You can be sure that, especially in recent years, every one of the Indiana bankruptcy attorneys who works in the Zuckerberg bankruptcy law offices tries negotiation first. 

In fact, ever since the beginning of the housing downturn, we’ve all become experts in negotiating mortgage modifications.  When that process has proven unsuccessful (with most of the problems being on the creditors’ end, not ours!), it’s only then we reach for the blockbuster tool which Chapter 13 bankruptcy represents.

Just like bankruptcy Chapter 7 Indiana, filing under Chapter 13 bankruptcy law immediately triggers the Automatic Stay, putting a halt to almost all collections efforts and legal actions against you (child support , tax and legal obligations are examples of exceptions to this rule).

The reasons Chapter 13 is the perfect tool to help stop foreclosure, and the reason that I, a longtime bankruptcy lawyer in Indiana always explore this possibility with clients who want to file personal bankruptcy in Indiana  include:

Chapter 13, as Bankruptcy action.com explains, consists of a debt repayment plan.  In most cases, foreclosure is put off while the homeowner works out a plan to catch up with the back payments over time (three to five years).

One other aspect of Indiana bankruptcy imformation it's important to share is that other, unsecured, debts can be discharged (forgiven) under Chapter 13 bankruptcy law, freeing up money to keep up the payments on the mortgage.

If there is a second mortgage or home equity loan, but the home is “underwater”, meaning there’s more money owed than the home is worth on the market, the second mortgage might be discharged through bankruptcy.   As the Bloomington and Columbus bankruptcy lawyers who work with me point out, that takes a lot of pressure off the homeowner!

If you’re a handyman, knowing your neighbor has a problem and knowing you’ve got just the right tool to help him fix that problem, you’d want to tell him or her, right? You can readily understand, then, why an Indianapolis lawyer for bankruptcy like me wants to pass along this information about Chapter 13 bankruptcy – the perfect tool to help stop foreclosure!

“While other businesses struggle to stay afloat, the debt-settlement industry is flourishing,” notes SmartMoney.com. It should come as no surprise to regular Bankruptcy in Indiana readers that, as a debt consolidation lawyer, I’d say all that flourishing comes at the expense of people who can least afford the additional pain and financial worry.

As bankruptcy attorneys in Indiana, all the lawyers who work in all four Zuckerberg bankruptcy law offices see the aftermath of what SmartMoney correctly calls the “hefty price” of debt settlements, with fees often running into thousands of dollars.  In fact, SmartMoney cites an example of someone with a $50,000 debt load who was charged as much as $10,000 in fees. “Those fees need to be paid before the consumer can start paying off the settlement itself,” points out the reporter. 

After 25 years offering Indiana bankruptcy help, including bankruptcy Chapter 7 in Indiana, Chapter 13 bankruptcy and small business bankruptcy in Indiana, I’ve seen more than my share of clients who, after paying those hundreds and even thousands of dollars in fees, were unable to complete the debt settlement program and ended up filing personal bankruptcy in Indiana anyway (which would have been the less costly and quicker solution from the start!).

By way of providing importantIndiana bankruptcy information, I wanted to share one very important judgment SmartMoney offered:  Besides the loss of money and time, debt settlement entails a real risk.

“Since debt settlement companies instruct consumers to stop paying their bills while they’re saving for a settlement, their balances continue to swell with interest and late fees and credit scores plummet.  In order to get paid, creditors may even sue.”

One of my Columbus bankruptcy attorney colleagues becomes especially enraged on behalf of her clients when she learns that they’ve been charged debt settlement fees without the banks or credit card companies who are their creditors having promised to settle anything!

“Debt settlement is sometimes confused with debt consolidation, in which borrowers are offered one big loan to pay off their smaller debts,” says Money.msn.com. “But debt settlement is a different animal.  Instead of offering a loan or repayment plan, debt settlement companies typically advise their clients to stop paying their bills and instead save up cash, which the company then will use to negotiate lump-sum settlements,” continues Money.msn.

As I’ve seen over and over again in my Indiana bankruptcy law practice, the creditors are not holding their breath or waiting politely for that settlement negotiation to take place.  In the true story highlighted by Money.msn, for example, the debtor was receiving what he called “brutal calls” every 15 minutes!

The fact is, only bankruptcy comes with an Automatic Stay.  Only bankruptcy stops those brutal phone calls cold and halts legal actions against a debtor.  Whether it’s bankruptcy Chapter 7 in Indiana or Chapter 13 bankruptcy law in Indiana we’re talking about, the bottom line is that only bankruptcy buys time to breathe!

Far too often, debt settlement does nothing but make matters worse!  Whether you need help to stop foreclosure or just help to stop creditors from calling or your wages from being garnished, individual bankruptcy in Indiana is the best tool for making a fresh financial start!

“In business, virtue is not always rewarded,” begins the article in the Chronicle Herald, referring to the American Airlines bankruptcy, and to the fact that AMR had tried hard to remain solvent when most of the other airlines had long ago filed bankruptcy. After 25 years as a debt consolidation lawyer offering bankruptcy services in Indiana, I can tell you – that statement about virtue not always being rewarded is true of life in general! 

As we in the four Zuckerberg bankruptcy law offices continue to offer Indiana bankruptcy help in tens of thousands of different situations, it’s abundantly clear that life isn’t always fair.  Whether we’re helping couples or individuals through bankruptcy Chapter 7 in Indiana, using the new chapter 13 bankruptcy laws in Indiana, or helping small businesses file bankruptcy in Indiana – we see it again and again: Effort and virtue do not always bring the desired results.

As one of my Columbus bankruptcy lawyer colleagues often points out to her clients, we deal with small businesses and with individuals, helping them confront debt issues.  We help stop foreclosure through Chapter 13 bankruptcy law in Indiana, help small businesses gain control over their expenses, even offer payday loan debt help and student loan debt help.  What’s so ironic is that in just about every situation, the people face the same type of credit crunch that American Airlines faced.  But unlike the giants who are in the news, with analysts reporting on each financial move, the “little guys” often suffer in silence, hoping for some kind of turnaround that never comes.

What I really liked about the Chronicle Herald article was the headline: “Bankruptcy may help airline return to blue skies of profit.”  The reporter explained that AMR’s plan is to replace its aging fleet with newer aircraft that are cheaper to run.  “Indeed, by allowing AMR to shake off some of its liabilities and cut its future costs, it will be in a better position to pay for those shiny new planes.”

I use examples of large corporate bankruptcies to show how the bankruptcy process “buys time” for a debtor company to restructure.  The whole idea behind Indiana bankruptcy law is to help debtors get back on their feet and have a chance at a fresh financial start. You might say the purpose of bankruptcy in Indiana is to lead to “blue skies of profit”!

Imagine my surprise to see a Yahoo!Finance.com piece titled “The Return of Debtors’ Prisons”. Why, just one year ago, in a long and detailed Bankruptcy in Indiana article, I explained that debtors’ prisons were federally abolished in the United States in the 1800’s! 

What’s even more startling, as my colleague the Columbus bankruptcy lawyer likes to reassure her clients, the right to bankruptcy was considered so basic and fundamental, it was written into our Constitution!

I’m often asked by clients who are considering filing personal bankruptcy in Indiana - are debtors’ prisons dead or aren’t they? As an Indiana lawyer with twenty five years of experience, one who actually helped write bankruptcy exemptions law in this state, I think I’m well qualified to answer that question.

• purposely evade child support or alimony
  
• defraud other citizens
  
• cheat the IRS (Here’s the one I want to focus on in today’s Bankruptcy in Indiana article) fail to appear at a court-ordered hearing.

As we in the four Zuckerberg bankruptcy law offices work to help stop foreclosure, offer payday loan debt help and student loan debt help, we’re constantly reassuring clients that Indiana follows Federal Debt Collection law.

And what Federal Debt Collection law makes clear is that borrowers must have been notified of any hearing or lawsuit and then have failed to respond before a judge is allowed to issue an arrest warrant.

So, while debtors’ Prison itself is legal in a number of states, as a debtor, you have rights.  To help you protect those rights are:

• the Better Business Bureau
  
• the Indiana Attorney General
  
• the Federal Trade Commission

The filing of bankruptcy in Indiana (whether Bankruptcy Chapter 7 in Indiana or Chapter 13 bankruptcy law in Indiana) stops virtually all collection and legal proceedings pending against you, including lawsuits and hearings.  The only exceptions are criminal proceedings and alimony and child support collections.

But I repeat myself….  No prison for honest debtors!

As any good bankruptcy attorney in Indiana would agree, the road to providing student loan debt help has been more like a roundabout than an avenue.

That’s because student loans are one form of debt that, under current federal law, cannot be discharged through filing personal bankruptcy in Indiana.  Instead, over the 25 years I’ve practiced Indiana bankruptcy law, I’ve worked to get debtors’ other non-secured loans discharged, thus freeing up cash that could go towards paying on student loan debt.

Student loans are unsecured loans. With a student loan there is no collateral, so, in an effort to prevent graduates from simply walking away from their student loans, the government made a big change in the law back in 1998, making it extremely difficult to have a student loan discharged in bankruptcy.

Apparently there’s someone else who thinks a more direct fix might be a better idea.  In fact, House Representative Hansen Clarke feels so strongly about student loan debt, he stated it’s “made a mockery of the American dream.” Clarke has proposed that student loan debt should be discharged in bankruptcy.

As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I liked Clarke’s answer when a reporter asked “Won’t there be an upsurge in bankruptcy if people could discharge their student loans?”

Clarke’s response: Forgiving student loans is a way to create jobs in our economy.  (This is exactly what we in the Zuckerberg bankruptcy law offices have been saying!) College grads, explained Clarke, can’t buy and furnish homes or start businesses, because they’re so burdened by student loan debt.  “It’s helping people who are working right now keep their money so they can spend it,” he added.

One of my Columbus bankruptcy lawyer colleagues echoed the sentiment:  “Wouldn’t it be a good solution if bankruptcy Chapter 7 in Indiana could include student loan debt help?” she asks.

The Veterans’ Day parade is over, along with the free meals for veterans from area restaurants and the playing of the “Armed Forces Medley” at concerts and business gatherings. The challenges facing veterans when it comes to finding jobs – now, that’s another story, as every bankruptcy attorney in Indiana well knows.

“As servicemembers return from Iraq and Afghanistan, they face a tough job market,” reports
Marisol Bello of USA Today. 

I was discussing this very issue the other day with the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices.  I realized that we’re all encountering veterans who, because of lack of a steady income, have reached the point where they need help filing bankruptcy Chapter 7 in Indiana, or even need payday loan debt help. 

The Indianapolis Star reported that homelessness takes a heavier toll on vets, who, once they become homeless, are more likely to stay homeless for longer periods than non-veterans.  Veterans are also more likely to suffer from serious health conditions. As a longtime Indianapolis lawyer for bankruptcy who offers Indiana bankruptcy information, I was happy to learn that the Senate has approved a bill that offers tax credits to businesses that hire unemployed veterans and also provides dollars for retraining older unemployed veterans.

Of the three leading causes for individual bankruptcy in Indiana - divorce, medical bills, and joblessness - the latter two hit veterans especially hard.  Often, veterans of the military suffer from medical conditions and even physical or mental disability, presenting an extra challenge when it comes to employment, along with extra medical costs.

In my Bankruptcy in Indiana articles, I’ve highlighted some of the special exceptions provided for service members in the new bankruptcy laws of Indiana, as well as special programs our own Lilly Endowment put in place four years ago to help returning Indiana veterans.

Handling medical costs, finding well-paying employment, finding good housing, and managing debt repayment are issues for all the clients of any lawyer for bankruptcy in Indiana.  But veterans deserve extra assistance making a fresh financial start after serving our country!

To all the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices, Alabama is a long ways from home in terms of practicing Indiana bankruptcy law.

On the other hand, a recent piece of news out of Alabama was of great interest to us, because when, only weeks ago,Alabama County filed for bankruptcy court protection, it marked what Yahoo! News called “the biggest municipal bankruptcy in U.S. history”.

Municipal bankruptcy is actually a topic I’ve been mentioning in these Bankruptcy in Indiana articles, despite the fact that, in all the years I’ve been a bankruptcy attorney in Indiana, the new bankruptcy laws of Indiana have made no provision for a city or a town or county to file bankruptcy.

My work, which involves individual bankruptcy in Indiana and small business bankruptcy in Indiana , is different in that, when a city or town files bankruptcy, it may or may not sell assets to pay debts. The point of the municipal bankruptcy is that it allows time for the municipality to continue to provide services to the extent possible while trying to sort out the debts they have and work with a bankruptcy judge to find ways to settle these debts. For example, Chicago bankruptcy attorney James Chatz said the filing allows all sides to have a moment of calm and then try to reach an agreement. In the meantime, Jefferson County can continue to run its operations and pay its bills.

One of my Columbus bankruptcy lawyer colleagues hit the nail on the head when she observed that it will be very interesting to watch as the Alabama County bankruptcy case unfolds.  As the Huffington Post states, “The biggest civic bankruptcy in American history could leave residents of Alabama's most populous county paying astronomical rates for public services performed by a skeleton crew of county workers. Or it could simply mean tightening the belt another few notches, depending how much of Jefferson County's $4.15 billion debt will have to be paid. It's even possible that, just as companies have benefited from bankruptcy, that the county surrounding Birmingham will emerge stronger for it.”

As a longtime debt consolidation lawyer offering Indiana bankruptcy help, largely through
bankruptcy Chapter 7 in Indiana and through Chapter 13 bankruptcy law in Indiana, I’m very interested in what happens in Alabama. If the bankruptcy process proves to be a successful remedy to the problems there, other municipalities may be encouraged to file as well, including, potentially, law changes allowing for municipal bankruptcy in Indiana.

Will what happens in Alabama stay in Alabama?  This Indianapolis lawyer for bankruptcy is interested to see….

The city of Vallejo, California has just emerged from a three year bankruptcy process.  As I’ve been telling my Bankruptcy in Indiana readers, when a city or county files bankruptcy, it’s not the same as individual bankruptcy in Indiana.  Yet, it many ways, it’s similar.

It’s actually one of the differences that I want to discuss today.  I was showing my Columbus bankruptcy lawyer colleagues an article published in the Huffington Post, saying that Vallejo’s Chapter 9 bankruptcy proceedings had “cast a stigma on the city”.  Real estate agents were required to disclose the city’s status to buyers, and investment advisors needed to point out the bankruptcy status to bond investors.  The national media were writing stories about Vallejo as a caution for other cash-strapped cities.  In short, it seemed as if “everybody knew”!

Now in all of the twenty five years I’ve been a debt consolidation lawyer offering Indiana bankruptcy information, the one fear that keeps coming up concerning personal bankruptcy in Indiana is that “everybody will know!”  But unlike the case in municipal bankruptcy, the usual situation is that nobody but you, your lawyer for bankruptcy in Indiana, the bankruptcy judge, and your credit card companies will know.
 
And as far as bankruptcy being a “stigma”, take it from me, Mark Zuckerbeerg, someone who has brought Indiana bankruptcy help to literally tens of thousands of individuals – the new bankruptcy laws of Indiana are based on a system created by your U.S. congress specifically to help stop foreclosure and to help good, honest, hard-working people make a fresh financial start.

It’s all the tension and the worry and the collection efforts that are the stigma; bankruptcy is the beginning of the beginning.  A municipality’s’ Chapter 9 bankruptcy may be the stuff of news, but, in the case of bankruptcy Chapter 7 in Indiana or Chapter 13 bankruptcy law in Indiana, it’s not news-making when you’re one of many thousands making a new financial start!

Leaves are falling, temperatures are dropping, and, as all good bankruptcy attorneys in Indiana know, numbers are changing. As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, by now I’m used to these twice-yearly shifts.

There are actually a number of ways in which the new numbers (in effect for cases filed under Indiana bankruptcy law on or after November 1 of this year) affect the planning I do with clients.

First, let’s talk about the means test, which is a sort of measuring stick the courts use to determine who’s eligible to file under the new bankruptcy laws in Indiana, and for what type of bankruptcy each debtor qualifies. As one of my Columbus bankruptcy lawyer colleagues always points out, the numbers are not the same in every state.

In Indiana, a one-person household can have income up to $39,987, with anything above that amount meaning that person can be disqualified from seeking relief under bankruptcy Chapter 7 in Indiana. A two-person household, by comparison, is allowed to have up to $49,669 in income, while a four-person household may have up to $67,296 and still file a Chapter 7. For every extra person in the household above four, $7,500 is added to the allowable income number.

The counting continues beyond income dollars, however, and gets far more detailed, using different numbers depending on which Indiana county the debtors live in. Depending upon family size, there is a dollar figure for how much money may be kept each month by the debtor for the mortgage or rent payment, for non-mortgage expenses, and for car-related expenses.

The four Zuckerberg bankruptcy law offices are located in Indianapolis, Columbus, Bloomington, and Anderson, serving 60 different counties, so knowing the precise numbers becomes very important to us as we offer Indiana bankruptcy help.

So, for example, in Marion County the monthly allowance for mortgage or rent (for a one-person household) is $777, while in Shelby County it’s $743. The monthly non-mortgage allowance in Brown County is $417, as compared to $384 in Marion County. The financial standards are broken down into even finer categories for food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous. Health care expenses have allowances that are different for those under or over age 65.

Whether my clients need payday loan debt help, student loan debt help, help to stop foreclosure on their home, or are considering filing small business bankruptcy in Indiana – I need to be counting heads and dollars. And, whether my clients are filing bankruptcy Chapter 7 in Indiana or filing under Chapter 13 bankruptcy law – I need to be counting income and expenses. In the end, it all boils down to numbers and people!