Bankruptcy Indiana

To answer today's blog reader's question, I need to review Chapter 13 bankruptcy law in Indiana.  Under Chapter 13, sometimes referred to as the "wage earner bankruptcy plan", certain debts can be discharged by the bankruptcy court.  Then, for the remaining debt, a plan is approved by the court for the debtor to make payments over a three to five year period of time. As a debt consolidation lawyer offering bankruptcy services in Indiana, I can tell you that means (assuming the debtor lives up to the terms of the plan) no assets are "taken away".

When the court is considering the Chapter 13 plan that the debtor filed (all the Indianapolis, Anderson, Bloomington, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices can confirm that a big part of the work for all of us is helping  clients collect all the information and then preparing the paperwork for the bankruptcy plans), the judge considers the income the debtor has coming in each month, plus what living expenses there are, to arrive at how much money can be available to support the debt repayments.

If it looks as if there won't be enough money left after paying expenses to repay the debts in monthly installments, the Chapter 13 might be rejected and the debtor might need to file bankruptcy Chapter 7 in Indiana instead. (Of course, with almost twenty-five years' experience offering bankruptcy services in Indiana, I will be able to analyze the situation before the petition is even filed, and know whether Chapter 13 is the most appropriate choice for that client.)

The truth is, I can assure our blog reader, even in Chapter 7 bankruptcy, it is very rare for clients to lose any assets at all when filing personal bankruptcy in Indiana.  That's because the state of Indiana has exemptions to protect you house, your car, your truck, your household goods and furnishings, IRAs and other retirement plans, your life insurance, and your wages.  But, even property that might be lost in a Chapter 7 can be preserved in a Chapter 13 bankruptcy if you can qualify.

As any Indiana lawyer for bankruptcy can attest, one of the big myths about bankruptcy is that you will "lose everything you have".  The fact is….most people who file bankruptcy don't lose anything!