Bankruptcy Indiana

Before making as big a decision as filing bankruptcy, I find, people want to know what to expect.  A good portion of my time spent offering bankruptcy services and debt help in Indiana is answering people's questions.

The other day, in USA Today's "Money" section, there was a headline that read, "How many ingredients are in this scoop (of ice cream)? The answer may be surprisingly simple."  The article went on to predict that, in 2010, companies that offer products with the fewest number of ingredients will win big.  "Consumers these days not only want to know what's in the stuff they eat and drink - they want to know what's not.

Even though I've been a debt consolidation lawyer and consumer bankruptcy specialist in Indiana for two and a half decades, I always remind myself that, to clients who are turning to me for help, the bankruptcy process is all new and probably a bit frightening. Besides offering student loan debt help and payday loan help, just offering Indiana bankruptcy information can be an important service in and of itself!

So, how many ingredients are there, in, for example a bankruptcy in Indianapolis?
Here, too, the number of ingredients is fewer than you might suppose.

DEBTS
One of the crucial first steps in the bankruptcy process is filling out paperwork detailing all your debts.  The name of the creditor and the outstanding balance must  be included for each debt.  

Your debts fall into two basic categories: secured and unsecured.  Secured debts have specific property tied to the loan.  Loans on cars, boats, motorcycles, and real estate are the most common types of secured debt.  Unsecured debt consists of money you owe to a creditor, but there is no lien on any specific property. Credit card debt and medical bills are the most common forms of unsecured debt.

Even though unsecured creditors can't take back a specific asset if you're not making your payments, there are certain unsecured debt that needs to take priority.  If you can pay anything, these are the unsecured loans that should come first.  That's because very bad things can happen very quickly if you don't. 

Don't pay rent?  You can be evicted from your apartment or rental house.  Don't pay child support? The state of Indiana can garnish your wages.  Don't pay federal income taxes?  The IRS can put a lien on your property, including money in your bank account, and garnish your wages as well.  Don't pay student loans? You stand to lose wages, lose financial aid, and lose eligibility for professional licenses.

ASSETS
What do you own?  Which assets are collateral for loans (meaning the creditor can take that asset from you)?

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.) Exempt property in Indiana includes a car, money in life insurance and in retirement plan accounts, household goods, and clothing and essentially most, if not all other personal property. 

INCOME
One really important factor in any bankruptcy is how much income you have. The bankruptcy court will need to know your average annual income (based on the last six months).  That amount will be measured against the median income in the state of Indiana, and also compared to the bills you need to pay, in determining if you're eligible to file bankruptcy, and what type of bankruptcy you can file.

What's in a bankruptcy?  As you can see, the answer is surprisingly simple - debts, assets, income.  But, just as assembling ingredients isn't all there is to making good ice cream, things are not quite that simple with bankruptcy.  If your goal is to get relief from your debts while still keeping all or most of your remaining property, allow a board-certified consumer bankruptcy specialist handle the complexities, while you "simply" focus on
making a fresh financial start!