Bankruptcy Indiana

Entrepreneur Magazine suggests business owners bone up on bankruptcy vocabulary in case they end up as either a debtor or a creditor in a bankruptcy case. "Bankruptcy has become an integral part of everybody's business", and part of being prepared is knowing the "lingo".

When it comes to bankruptcy, whether business or personal, it's the local lingo that's important, and a local attorney whose advice you should seek.  That's because, while bankruptcy law comes primarily from Congress and is meant to be uniform across the country, the way the law is interpreted can differ from state to state.  In reality, "bankruptcy law and practice vary significantly from court to court and region to region," as attorney Stephen Elias points out in How To File for Chapter 7 Bankruptcy.

In Indiana, only those  of us bankruptcy attorneys who have passed the test from the American Board of Certification (fifteen across the entire state as of last count) can call ourselves Consumer Bankruptcy Specialists.

The U.S. Courts website offers a Glossary of Bankruptcy Basics, and I'll begin today with one term for each of the letters A through E.

Automatic Stay
This is an injunction from the court that automatically stops lawsuits, foreclosures, garnishments of pay, and all collection activities against the debtor from the moment a bankruptcy is filed.

Bankruptcy Estate
The bankruptcy estate refers to all the property the debtor owns at the time of the filing.

Chapter 13 bankruptcy
This is the type of bankruptcy that includes a 3-5 year debt repayment plan.  Chapter 13 bankruptcy is meant for debtors who have regular income.

Discharge
This term refers to the release or forgiveness of a debt which the court grants to a debtor, usually in a Chapter 7 bankruptcy.

Exempt Property
In a bankruptcy, there are certain kinds of property which are protected from creditors.  (I helped write the exemptions portion of the Indiana bankruptcy law.) certain property cannot be attached by creditors. Exempt property in Indiana includes a car, money in life insurance and in retirement plan accounts, household goods, and clothing.
 
Even with the guidance of an experienced attorney, it helps being familiar with the vocabulary!