Bankruptcy Indiana

Two law school professors have concluded that the bankruptcy system in our country is far from functioning as effectively and helpfully as might be. Ronald Mann of Columbia University Law School and Katherine Porter of the University of Iowa College of Law have written a paper on the subject, called Saving Up For Bankruptcy, and many of the things Mann and Porter talk about are things I wrestle with every day as an Indiana bankruptcy attorney and debt consolidation lawyer.

The main problem that Mann and Porter find is that "only a few of those for whom bankruptcy would be economically valuable ever choose to file."  Through interviewing industry professionals (attorneys, trustees, and judges) and through gathering data from judicial filing records, the two professors try to answer two questions:

• What distinguishes those who file from those who don't?
• What determines the timing of when people file bankruptcy?

Mann and Porter found out two very interesting things:

• Creditor collection activity does not force people into filing an immediate bankruptcy. Harassment from creditors wears people down over time, "like water dripping on a stone".
• The primary factor that affects the date on which people file is whether they have saved up enough money to pay the attorney and filing fees.

Based upon these findings, the two professors have two recommendations for changing the system:

• Collection calls need to be stopped through a "do not call list" -type mechanism. This would eliminate many of the costs of debt collection and take the needless pressure off the debtors. Excessive collection efforts, according to the authors, lead to inappropriate filings, not well-thought out courses of action by debtors.
• Low-income, low asset filers (the ones who really need the bankruptcy remedy) would have access to a simplified administrative process without the costs of the full court process that is the only option available today.

Until such time as this kind of recommendation can find its way into law, I continue to offer Indiana bankruptcy help. I caution all my Indiana bankruptcy clients and blog readers about creditors who call…and call…and call.  Under the new bankruptcy laws in Indiana, you have rights.  What's more, in this state you're allowed to record a telephone conversation so long as one party gives consent (that could be you!).  So, if you believe a debt collector is violating the Fair Debt Collection Practices Act, you can use a recording device on your telephone to gather evidence you can turn in to the Indiana Attorney General's office.

My own experience in providing Indiana bankruptcy help for the past almost twenty-five years bears out what Mann and Porter say about clients waiting to file because they need to save up money for bankruptcy filing fees (approximately $3,800 for Chapter 13 and approximately $350 for Chapter 7).  Like them, I notice a bankruptcy filing "peak" around the time people receive tax refunds.

Saving Up For Bankruptcy is certainly a thought-provoking paper.  Bankruptcy law has evolved over the years since 1815, when it was first established. As a certified consumer bankruptcy specialist, I have been involved in some of the changes in Indiana bankruptcy laws over the years. But, until the new bankruptcy laws in Indiana change again, all I can do is keep helping Indiana bankruptcy clients navigate the existing bankruptcy system.  The Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who are my colleagues help me offer the most up-to-date information and Indiana bankruptcy services,  one client at a time.