Bankruptcy Indiana

In The Two-Income Trap, Harvard Law School professor and bankruptcy authority Elizabeth Warren, together with co-author Amelia Warren Tyagi, write about guilt-free default in bankruptcy.

Now, there’s a question that comes up all the time in the course of my work as an Indianapolis bankruptcy attorney and debt consolidation lawyer – Is there such a thing as guilt-free default? My associates who work as my Columbus bankruptcy lawyers and those who work in the Anderson and Bloomington Mark Zuckerberg bankruptcy law offices deal with this issue every day of the week  as well:
 

• What about all my bills that will never get repaid?
• These companies lent me money, so aren’t I obligated to pay them back?? (This is where all the self-blame and guild rear their heads…)

I’ve been offering Indiana bankruptcy help for almost twenty-five years and dealing with personal bankruptcy in Indiana, so these are no new questions for me, but I like the way Warren and Tyagi handle this issue in ther book, by offering a few reassurances and a warning.
 

• Lenders (credit card companies and banks) took a calculated risk when they lent you money.  Every lender hopes to make money on every loan, but they know a certain percentage of loans will default. “The interest charges and penalty fees are designed to cover those risks.”
• Debtors have no need to worry about never being able to obtain credit again.  “Within six months of filing for bankruptcy, 84% of families surveyed received unsolicited offers for new credit.

• “Whatever you do, don’t reassume any old debts that were discharged by the courts.” According to Warren and Tyagi, one in four families signs on to reassume debts that were discharged by the bankruptcy court, mostly out of fear of having purchased goods repossessed.

So, if your debts have been discharged under the new bankruptcy laws of Indiana, you might ask, What about the guilt? If you borrowed money, aren’t you morally (even if no longer legally) obligated to pay it back?

Maybe, say Warren and Tyagi.  “If everyone had stayed healthy and you hadn’t lost your job, you would have paid your debts… But that didn’t happen.”  You were obligated, yes, they explain.  But you’re also obligated to keep a roof over your head and your family’s head, put food on the table, and get the medical care you need. 

The bankruptcy safety net was created to give honest debtors like you a chance to rebuild. Elizabeth Warren and Amelia Tyagi agree:  “Give yourself the best odds of getting exactly what you need from the bankruptcy judge – a fresh start!”