Bankruptcy Indiana

The fear that if you file personal bankruptcy in Indiana, “everyone will know” is based on a common bankruptcy myth. When it comes to politicians, now, that may not be a myth after all!

When Chris Tibbs filed bankruptcy Chapter 7 in the state of Washington six years ago, only the closest friends with whom he chose to share the information (and Tibbs’ attorney for bankruptcy, of course) knew anything about it. No one was really interested. It’s only now, because Tibbs is a political candidate for the office of Kitsap County commissioner, that the story of his earlier bankruptcy is making headlines.

At the Zuckerberg bankruptcy law offices, questions about publicity arise all the time, but in actual fact, it’s very rare for anyone’s individual bankruptcy in Indiana to be of interest to anyone beyond that person’s creditors. That means that if you don’t want everyone to know you’ve filed, you need do nothing more than keep the information to yourself!  To a great degree, the same holds true for small business bankruptcy in Indiana. 

In fact, the Chris Tibbs bankruptcy in Washington State was related to a small business, a coffee stand business, for which Tibbs purchased supplies with personal credit cards. Because Tibbs borrowed money in his own name, and since he did not establish a corporation, he had no protection of his personal assets against creditors’ claims.

That brings me to a second myth that I’ve frequently encountered over the 25 years I’ve been a debt consolidation lawyer offering Indiana bankruptcy help – the myth of the “corporate veil”. One of my Columbus bankruptcy lawyer colleague says she sees this a lot - clients who believe they can file small business bankruptcy in Indiana without also filing personal bankruptcy in Indiana. If, unlike Tibbs, they had a corporation, they ask, why can’t they keep their personal finances out of the corporate bankruptcy? They don't need help to stop foreclosure, they don't need student loan debt help, and certainly not payday loan debt help, they say.  So what does their business have to do with their personal affairs?

Here's why their business has a lot to do with their personal affairs:

• They guaranteed business loans or lines of credit with their personal assets.
  
• They put personal money into their business, including money taken out as home equity loans.
  
• They withdrew money from their business for personal use.
  
• They signed contracts and agreements for the business in their own name.

Some clients give away their own privacy.  And some business owner clients pierce their own corporate veil!