Bankruptcy Indiana

I'm always reading professional journals on financial planning.  I just never know what valuable information I'll find that can help me advise my Indiana bankruptcy clients. In the April issue of the Journal of Financial Planning, I found the most interesting statistic:
14% of loans between family and friends end up in default, versus 3% of consumer bank loans.

As a certified consumer bankruptcy specialist, of course, my work involves debt management and debt relief.  This statistic bears out what I've found to be true in dealing with thousands of families over the years.  And, whether it's parents endangering their own retirement to help out adult children who've lost their jobs, adult children helping to support their parents or their siblings, I know that what FoxBusiness.com says is very true:
"Family Loans Can Raise More Problems Than They Solve."

FoxBusiness reporters Gail Lieberman and Alan Levine refer to such loans as "social loans", meaning the borrow and the lender know each other.  With credit being tight now, these private loans are growing rapidly.  Not only are these loans rarely secured, they're rarely documented.

Because of this, problems often arise settling estates (such as deciding who owns the home), and sometimes there can be adverse tax consequences as well.  Private lending, of course, is much more flexible than bank lending, and often much cheaper.  But preparing proper paperwork is crucial.  Founder of Circle Lending Ashkeesh Advani told Time Magazine, "Documentation really keeps a loan on track", and adds that with documentation, the default rate is cut in half!

Remember that bankruptcy creditors' meeting I'm always talking about, where the court goes over all the paperwork showing all loans, all assets, and all income?  Unsecured, undocumented personal loans are the least likely to get paid.  (Now it's no giant credit card corporation you're dealing with - it's friends and family who could be hurt.