Bankruptcy, I've reflected more than once, represents the ultimate in compromise. Different parties with different needs share a dilemma.  Any compromise will never be 100% good for all the parties.  I like to refer to the Indiana bankruptcy court system as a safety net.  At the same time, after almost twenty five years of helping individuals and businesses use that safety net, I know it's still only a compromise and not the ideal solution to everyone's problems.  I always try to keep on learning more about bankruptcy and how it's handled in other states, and the other day I was reminded of the concept of compromise by something happening in New England.

A company called Haven Healthcare recently filed bankruptcy in Connecticut.  Haven Healthcare runs nursing homes throughout the area, including Rhode Island, New Hampshire, Massachusetts, and Vermont in addition to doing business in Connecticut. That means the company was a big payer of property taxes in those states, in addition to paying the state fees charged for operating nursing homes.  With the bankruptcy case now in progress, all those towns in New England are waiting to get paid those fees and taxes.  Then, while Haven is trying to reorganize under the bankruptcy plan, it's still taking care of patients.  Since the company rents some of its property, many landlords haven't been paid, and they, in turn, are having trouble keeping up with their own mortgages.  Reminds me of the TV commercial for a depression-treating drug. "Whom does depression hurt?" the commercial asks?  The answer: "Everyone!" It seems the bankruptcy court will have its hands full being as fair as possible to all the parties involved in this particular business bankruptcy.

As I repeatedly urge business owners and families - Get Help Early!  The earlier I can begin my work with clients (whether bankruptcy turns out to be advisable or avoidable), the fewer parties are likely to be hurt, and the hurt is likely to be less.

Personal bankruptcies almost always fall into one of two categories - Chapter 7 and Chapter 13.  As I know from having helped write the latest version of Indiana bankruptcy exemption law, these two types are, in a way, like the two sides of the income coin.  Simply put, consumers who have income might have the means to repay most or all of their debts over time.  Those who don't have income, either because they can't work or because they were laid off and haven't been able to find new employment, obviously can't repay their debts, and so they file Chapter 7 bankruptcy under which some of their debt can be discharged, or forgiven. 

In fact, during the more than twenty years I've been a bankruptcy lawyer in Indiana, one of the truly important functions of my work with clients is understanding the ins and outs of the "bankruptcy means test" so that I can advise clients which chapter of bankruptcy is most appropriate given all their circumstances.  While some clients have income from veterans' benefits or other government programs, it's fair to say that income and jobs are very, very closely related. And while most personal bankruptcies are the result of a combination of factors building up over time, job layoffs are certainly one of the big causes leading to bankruptcy along with medical costs and divorce.  The job market itself is changing, and finding new employment can be very challenging, as I wrote in It's Not Your Daddy's Job Market.

Some newspaper and magazine articles I've been reading lately talk about entrepreneurship in Indiana being up because of job layoffs - the idea being that people lose jobs, then start their own businesses.  Needless to say, it's not that easy; most people who lost jobs don't have enough money saved up to launch a business, and getting credit is a lot harder these days as well.  Sharon O'Donahue, executive director of Business Ownership Initiative of Indiana, interviewed for an Indianapolis Business Journal feature, advises getting creative.  "Today, it's about patchworking income - threading together sources of income that meet household needs."  I know one thing for sure: - clients emerging from bankruptcy will need to be especially creative as they work on rebuilding their financial lives, so the phrase "patchworking income" is likely to become an integral part of my discussions with my Indiana bankruptcy clients.

Visa and Mastercard aren't unhappy with their revenue, but the source of that revenue seems to be shifting.  Debit card use is growing faster than credit use, both giant companies report.  Since my work as an Indiana bankruptcy attorney deals with debt of all types, these trends are especially interesting and important to me as I advise my bankruptcy blog readers and bankruptcy clients.

Debit cards and credit cards each have their uses - and their dangers.  Debit cards are tied to bank accounts.  For consumers who swipe them for purchases exceeding those account balances, fees and late charges can be steep and swift.  Credit card companies have lowered many card holders' limits (because of the many defaults), and swift and steep are the late charges, penalties, and hikes in interest rates for credit card users who abuse their privileges.

The "natural order" of things has been for folks to use debit cards for everyday spending, use credit cards for larger purchases, and then to tap home equity for the very biggest expenditures.  Now, with the fall in home values happening at the same time as rising medical costs, food costs, and fuel prices, the pressure has been in a downward direction. Bigger and bigger purchases are being done with credit and then debit cards.  Very unfortunately, the next step down has been payday loans, a surefire route to ruination (see Who's Paying For All The Ads For Payday Loans - And Why?).

There's often no easy answer for families and individuals caught in a vise of medical costs, job layoffs, and sometimes divorce.  That's why the message I try so hard to convey in this bankruptcy blog is unchanged:  Get help at the first signs of financial trouble.  Things can get better, but, believe me, waiting will lead to nothing but worse.

Always on the alert for good news about jobs in Indiana, I was happy to read about three developments in Indianapolis and neighboring Plainfield.  After almost twenty-five years of helping clients through the process of filing bankruptcy and then through the process of rebuilding their financial lives, I appreciate the high importance of job opportunities for these clients.

Wireless distributor Brightpoint Inc., I learned, is moving its headquarters from Plainfield to northwest Indianapolis.  The company will be occupying twice the space it now has in its new headquarters in Indy, while keeping its distribution and logistics facilities back in Plainfield.  More than 100 new workers will be hired. The great irony here is that Brightpoint was occupies space in Premier Properties, whose owner has filed bankruptcy (I wrote about this in Bankruptcy Auctions Scheduled For ATA And Premier Properties).

Just as Brightpoint is moving east, construction is beginning on a gigantic bulk warehouse facility in Plainfield in the AllPoints Midwest Park.  This is especially welcome news, given that the credit crunch nationally has made it difficult for many commercial developers to finance projects.  Even though there are no official tenants as yet, Duke and Browning already have financing in place for the twelve million square foot facility. 

Also in Plainfield, Amazon.com is in the process of leasing extensive warehousing space and is expected to employer 1200 workers during the coming two years.

I'll tell you, news like this brings a smile to the face of this Indiana bankruptcy attorney!

Foreclosures have been featured a lot in the news lately.  In one of my very earliest bankruptcy blogs, Dis Or Dat? Foreclosure Or Bankruptcy?, I pointed out that there is no "one size fits all" solution, and that designing exactly the right plan for each client's situation is what my work as an experienced bankruptcy attorney is about.  In other words, in working with some clients, it's best to create a strategy focused on avoiding foreclosure, and in other situations, that may not be the way to go.

In deciding which form of bankruptcy to file, one of the factors to consider is that a Chapter 13 bankruptcy offers individuals an opportunity to save their home from foreclosure.  A chapter 13 can be referred to as a wage earner's plan of bankruptcy, because it is meant for people who have regular income coming in that they can use to make installment payments to their creditors. To qualify for a Chapter 13 bankruptcy, a person's unsecured debts (such as credit card bills, utility bills, and medical bills) must fall within certain limits (the number is indexed for inflation, and it's now $336,900.)  Their secured debt (such as car payments and mortgage) also must fall within a limit (now $1,010,650).  The process is quite detailed, one reason it's important to seek expert legal counsel.

The point I want to bring out here, though, is that, by choosing Chapter 13 rather than other forms of bankruptcy, individuals can stop foreclosure proceedings on their home.  If they are approved for a Chapter 13, they will "cure" their delinquent mortgage payments, but they'll be able to do that over time (three to five years), all the while keeping up with the regular mortgage payments and saving the home.

A second reason some people choose to file a Chapter 13 bankruptcy is that this kind of bankruptcy has a special provision that can protect co-signers on consumer debt.  In some situations, this can be very important in protecting the assets of parents, spouses, or adult children. (In a Chapter 7 bankruptcy, by contrast, co-signers are not excused from liability.

Over almost twenty-five years of practicing bankruptcy law in Indiana, one important lesson I've learned is that people's financial lives tend not to be cut-and-dried; each situation has different factors that must be weighed in coming up with a plan that is the least damaging to the people involved, as well as to their families, business partners, and creditors.  Yet it's important to choose a plan that offers bankruptcy clients the greatest chance for rebuilding their financial lives.  Sometimes, after a long day in my office or at the bankruptcy court, I find myself sighing, "It ain't easy, being a bankruptcy attorney!"  But then I remind myself how rewarding I find this work, because I know I'm helping people get a fresh financial start.
 

Foreclosure pets, foreclosure fires, and now, foreclosure weeds - is there no end to the devastation brought about by home foreclosures?  As a consumer bankruptcy specialist in Indiana, I've been dealing with bankruptcy and foreclosure issues for decades, but I must confess I hadn't given enough thought to weeds.  Weeds make everything worse in a foreclosure.

By way of quick review, once a property is foreclosed, the Sherriff's Department holds an auction.  Meanwhile, until that Sherriff's sale takes place, whosever name is on the deed is responsible for the upkeep of the home. Overgrown, dirty yards are an eyesore in any neighborhood, negatively affecting the value of other homes nearby.  In some climates, the weeds dry out and become a fire hazard. In fact, fire officials warn that dry weeds should be kept at least fifteen feet from houses.

In cases where a builder files bankruptcy before selling all the homes in the addition, the homeowners who have moved in are stuck with the problem, and their homeowners' association may be stuck with the weed-whacking bill as well.

Some towns already have ordinances that allow officials to enter a foreclosed property and cut down overgrown weeds, I'm learning, and others are creating ordinances of their own as the problem gets worse.  Costs for the enforced weed-trimming are added to the taxes on the property, making homes even more of a challenge to sell.

Foreclosure of a home is certainly not something people would choose for themselves or for loved ones, but my experience over twenty-plus years as a bankruptcy attorney has taught me that in certain circumstances, foreclosure is actually the best option for a client (see Keeping Home, Sweet Home - It Depends!).  Abandoned pets, arson, weeds - these are all part of a foreclosure picture that could have been at least a little prettier.  If only people would face up to their situation and get help earlier in the process of undergoing financial difficulties, some foreclosures might be avoided, and there might be a whole lot less weed-whacking going on!

In my earlier bankruptcy blog, Affordable Housing At Mapleton Park, I highlighted an affordable housing project in the Fall Creek area of Indianapolis.  I explained that, as a bankruptcy lawyer in Indiana, I take an interest in all news that affects my clients.  I'm especially interested in news about two topics: housing and jobs.  You might even say those are the twin pillars of the rebuilding process after bankruptcy.  In my work with the bankruptcy system for the past twenty-plus years, I often find myself dealing with job loss and with housing loss through foreclosure actions.  As I help my clients rebuild their financial lives after bankruptcy, we'll be working on gains.  And that’s when those two factors will serve as keys to success: the availability of good jobs and the availability of affordable housing.  That's why I was glad to read in the North Indy Star last week that another affordable housing project is planned, this one in the South Broad Ripple area.

Carreau Design has already gained city land-use approval for an $18 million development project in the 4900 block of North College Avenue, to be called the Uptown.  The building will include street level businesses, with three stories holding 72 apartments.   Meanwhile, a neighborhood association has been organized called College Avenue Neighborhood Development Organization - CAN DO! for short.  Resident Susan Smith, who helped get this organization together, says, "We aren't talkers.  We're doers."  What a great motto that is for redevelopment in general, don't you think?  Those words, and this Uptown project really resonate with me as a bankruptcy lawyer.  After all, isn't that what bankruptcy is designed to do?  Redevelop people's lives, that is.  I'm proud to say, together with my bankruptcy clients, we CAN DO that!

In one of my earlier blogs, Money And Emotion Mixed In Bankruptcy, I discussed the fact that, in the course of almost twenty-five years guiding people through the bankruptcy court process, I've learned that debtors tend to have a lot of negative feeling going on.  Some of this negativity is caused by the financial problems they're facing, but often it's made worse by myths they've heard about bankruptcy, things that simply aren't true.  In that blog, I emphasized that fear, self-blame, and even despair are normal and natural emotions to have during a time of great financial stress.  Yet the only emotions that are going to be useful during a bankruptcy are hope and resolve.  There are things to be done, actions to be taken to handle matters (of course I'm there to help), and only the clients' inner strength, resolve, and focus can drive those actions.

The other day, in a children's story collection, I found the most wonderful tale.  This story brings out the very point I was trying to make in that blog. (In fact, I believe I'm going to have everyone who's considering filing bankruptcy or who is threatened with foreclosure read this story.)  It's called The Magic Ring, and it takes place in the time of King Solomon. In the story, Solomon hears about a ring that has a magic quality: the ring makes a sad person happy and a happy person sad.  The king gives his chief general six months to locate the ring. The general travels far and wide, asking goldsmiths, silversmiths, merchants, sailors, captains of caravans from China and India - no one has heard of such a ring. Finally, an old man calls out to the general, and gives him a plain gold ring on which four words are inscribed. 

The moment Solomon reads the words on the ring, he, who has all the riches in the world and all the wisdom in the world, becomes sad, realizing how circumstances could change his life in an instant.  Yet Solomon realizes that the same four words could serve as tremendous comfort for people going through troubled times. Here's what was written on the ring: "This, too, shall pass."

Over the years, I've talked with literally tens of thousands of people, usually at the most trying times in their respective lives.  Experience has taught me that people are best off dealing with their own feelings rather than suppressing them.  At the same time, I know debtors need to make some very important decisions so that they can get through the bankruptcy process and move on with their lives.  Since I'm a bankruptcy attorney in Indiana, the focus of my work is helping people take informed action to improve their financial circumstances.  I think remembering the words engraved on Solomon's ring might help my clients- and me - keep matters in perspective. However bad the stuff is that's going on right then - this too shall pass!

Always alert for news that can be of use to my Indiana bankruptcy and foreclosure clients, I was very interested to learn about a tax provision spearheaded by Indiana Representative Baron Hill and Indiana senator Evan Bayh as part of the new housing bill.  In my earlier bankruptcy blog, Housing Bill Offers Help Avoiding Foreclosure, I explained the national housing bill just passed by Congress, which focuses on first time home buyers and on refinancing of mortgages.  In working on the tax break as part of the housing bill, Bayh and Hill wanted to help Hoosiers who are coping with declining home values and rising property taxes by adding a tax break for property taxes paid..

In order to understand this tax break, you need to know that up until now, only those folks who itemized their deductions on their federal tax returns were able to take a deduction for property taxes paid.  That meant that those people who claimed just the standard deduction couldn't get any advantage from having paid property tax.   Under this new provision, non-itemizers can deduct up to $500 of their property tax from federal taxes (families can deduct up to $1000).  It may seem like a small thing, but actually almost one million Indiana homeowners will be able to benefit from this break.

I talk with thousands of people in my bankruptcy law offices in Anderson, Bloomington, Columbus, and Indianapolis.  For some of these people, the new tax break will be "too little, too late".  In other words, the tax break will not provide them with enough savings to help them avoid foreclosure on their home or to stave off bankruptcy.  The way I see it, though, any financial benefit that can offer help to homeowners is an effort in the right direction.

Scanning the entertainment section of the paper the other day, I noticed that the Broadway hit "The Wiz" is playing in Indianapolis.  Now, I was not yet born when this story began, but as a consumer bankruptcy specialist in Indiana, I know the very interesting and sad saga behind the show. It all started with the book upon which this wildly popular play "The Wiz" is based, "The Wizard of Oz", which was first published in the year 1900.  The then 44-year old author was L. Frank Baum, and he enjoyed enormous success with his book - for a time.  In fact, within the first two weeks of publication, the book sold 10,000 copies, and the first year sales totaled 90,000. Then Frank Baum decided to expand upon his success, producing a very expensive slide show with an orchestra based on Oz.  Unfortunately, neither of those ventures was well-accepted, and when that show closed, Baum was forced to file bankruptcy.

The supreme irony about this tale is that, several years after Baum died, Samuel Goldwyn bought the movie rights to The Wizard of Oz for $40,000.  Today, more than a century later, you and I can attend the new Indianapolis showing of "The Wiz", which has delivered millions of dollars in profits, but of course too late to benefit even the descendants  of the imaginative author of Oz.

Even though the seeds of this bankruptcy were sown several generations before my time, as the adviser to many small businesses that file bankruptcy in Indiana, I understand only too well what happened.  Business owners - all business owners - take risks.  They invest their time, their expertise, and often their life savings in ventures which they believe have a good chance of success.  But sometimes, factors beyond their control undermine their chances.  It might be a general downturn in the economy or in their particular field.  It might be a medical problem that struck the business owner or a family member, or even an expensive divorce.  Quite often, decisions that you and I, in hindsight, might agree were solid at the time, turned out not have been so good given later circumstances that could not have been predicted.  The bankruptcy court system is there to serve as a safety net for just those reasons.

Often, as part of my work as an attorney focused on consumer and small business bankruptcy, I find myself discussing a client's employee benefits from work.  Since I do my very best to keep up with developments in every area that can impact my clients, I read a journal called Employee Benefit Adviser. The July issue of this professional journal carries a very wise piece by Editor-In-Chief Robert Whiddon, called "Hope Is Not A Strategy". I was immediately attracted by the title, because, as I've stressed in so many earlier bankruptcy blogs, many small business owners keep hoping things will turn around for them.  Meanwhile, they put off putting some strategies into place that can help protect their assets in the event their business simply cannot survive.

I like Whiddon's attitude towards employee benefit planning and the advice he's giving employee benefit advisers: "We all fall into the hope trap.  We shouldn't anticipate or plan for failure, and it's important to tackle life each day with a sense of optimism.  But do we have specific plans to achieve the things we want to make happen?  'Sort of' and 'maybe' are too close to hope for my tastes."

I found these words particularly apropos for both my individual bankruptcy clients and my small business bankruptcy clients in Indiana.  The financial troubles that lead to bankruptcy and/or foreclosure on a home or business property very rarely happen overnight.  In fact, after almost twenty-five years of dealing with clients' personal and business finances through recessions and periods of booming growth, I find that it's usually a combination of factors, piling up over months and even over a period of years, that finally become too much for clients to handle on their own. 

The earlier in the process that I enter the picture as a bankruptcy adviser, the greater the number of options will remain open for us to use.  Too often the result of just waiting and hoping, I find, is that troubles tend (both literally and figuratively) to compound.  Even if bankruptcy or foreclosure becomes inevitable, those clients that began planning with me at the first signs of trouble ended up with more satisfactory results.
 
As Whiddon so aptly points out, hope is not a strategy.  The funny thing I've found, though, is that having a strategy in place ahead of time really does offer hope.

As a consumer bankruptcy specialist, I always do my best to stay on top of the news - world news, national news, and particularly news that directly affects citizens of our state. There's certainly been no shortage of important news lately.  Today I want to highlight two stories that may seem like "tidbits" in the big picture of things, but I think they could be big for Hoosiers, and especially favorable for my Indiana bankruptcy clients.

On Thursday, July 24, Step #2 kicked in.  I'm talking about the three-step minimum wage hike.  The federal minimum wage jumped 70 cents to $6.55 an hour.  Big yawn, you think?  Think again.  First of all, last summer's Step #1 increase from $5.15 an hour was the first increase in more than ten years.  True, not very many workers earn only minimum wage (only 36,000 in all of Indiana, according to the Bureau of Labor Statistics).  Critics say employers will simply hire fewer workers or hire illegal ones.  What I see, though, is a general trend towards higher wages that favors the more educated and better-trained workers.  This trend will work in favor of bankruptcy or foreclosure clients who are trying to make a fresh start and keep up with debt repayment plans.

The second tidbit comes in the form of kudos for our Hoosier state.  For the first time in history, Indiana has earned a Standard and Poor's top credit score rating.  Given the flood damage and housing problems and job layoffs we've had, this is just an amazing accomplishment.  As a state, we will save millions of dollars a year in bond interest.  This will help our public school systems, in addition to helping speed up paying for the Lucas Oil Stadium, and it basically means more money can be devoted to all programs run by the state.  Indiana, by the way, was one of only nine states to earn this high a rating. 

I've said this many times before, and it bears repeating:  The most important chapter of any bankruptcy story is the sequel, the part where people rebuild their lives.  I'm no economist (as I've also noted before), but I can see that both these two news tidbits could mean big (and good) things for my bankruptcy clients in Indiana.
 

At the end of last month, I was happy to learn, the much-talked-of housing bill was passed by Congress. As a bankruptcy lawyer in Indiana for more than twenty years, I deal every day with the issue of foreclosure.  As I brought out in Keeping Home Sweet Home - It Depends, for some clients who simply bought "too much house", it might make sense for them to lose their home and downsize, perhaps arriving at a compromise with their lender to accept a "deed in lieu of foreclosure" or doing a "short sale".  For other clients (those with children for whom it's important to stay within a certain school district, for example), it's better to make every effort to preserve their present home.

This new bill does several things, and I'll mention just three of the big ones here:
a) It provides the Federal Housing Administration with $300 billion to go towards offering fixed rate mortgages to debt-ridden homeowners.  b) It offers tax breaks to first time home buyers, including low-income buyers.  c) It gives states $11 billion in tax-free bond backing to make low interest loans, to build low income rental housing, and to refinance subprime mortgages.

Bankruptcy and foreclosure are closely related, and on both, I always advise asking for professional help at the first signs of trouble.  The new housing bill, particularly in light of the fact that President Bush dropped his earlier opposition to it, means problems are being addressed.  And that's been the core of my work for the past twenty-plus years - addressing problems head-on, helping clients create a strategy, and helping them begin the process of making a fresh financial start.

A person's credit history (also known as credit score or credit file), is a detailed record of how he/she has managed debt over time. It lists credit accounts and their outstanding balances, how often the individual was late in paying an account, whether any account for that person was ever turned over to a debt collector, whether the IRS ever put a lien on that person's assets, and whether any creditor ever obtained a judgment against that person after a lawsuit.  The credit history also shows whether that person ever filed bankruptcy.

Each of the credit reporting agencies collects information from public records and then maintains that information in a computerized database.  The information can then be sold to anyone the law says is entitled to use it.  Basically that includes five groups:

Creditors use your report in deciding whether to increase or decrease credit limits, or even whether to cancel the account, as well as to decide whether to lower or raise the interest rate you're being charged or to leave it as is.

Employers initially use your report to help decide whether to hire you.  Later, the report helps an employer decide whether to give you a promotion (or a demotion), or whether to fire you.

Insurance companies use your credit report to decide whether to sell you insurance and whether to charge you standard rates or increased rates.

Landlords use the credit report to help decide if they want to rent you an apartment - or an office for your business. The landlord wants to know if he can depend on you to keep up your rent payments.

Government agencies use the credit record to help decide if you are to be given a security clearance or perhaps a special license for which you've applied.

Your credit record can be restored after bankruptcy.  While a Chapter 7 bankruptcy will stay on your credit report for ten years and a Chapter 13 for seven years, you will be able to rebuild your credit. 

As a bankruptcy attorney in Indiana for almost twenty-five years, the one thing I want to stress to everyone is this: Your credit report is your passport.  Don't leave home without it. You won't get very far!

When it comes to jobs in Indiana (a subject in which I have an intense interest as I help my Indiana bankruptcy clients rebuild their finances), the president of the Fishers Town Council, Scott Faultless, hit the proverbial nail on the head:  "Businesses are looking to come to a site where they can find employees with the requisite level of education and the ability to get additional education close by" (Indianapolis Business Journal, July 14-20). 

The past couple of months, I've been writing in these bankruptcy blogs about new jobs that are being created all over Indiana.  The crucial thing, though, for people who've suffered job layoffs and are trying to avoid bankruptcy and foreclosure, as well as for people emerging after bankruptcy and trying to get their finances back on track, is that they must be able to qualify for these newer, high skill/ high tech jobs that are coming to our state.  I'm especially thinking of the folks who filed Chapter 13 bankruptcy, taking on a three to five year repayment plan.  Well-paid jobs are essential if these plans are to succeed.

Fishers, Indiana just hired Mark Long, who built I.U.'s Energy Technology Center, to spearhead the development of a new Research and Technology campus in Fishers.  Meanwhile Indiana has been adding bioscience jobs faster than all other types, in fields including medical devices, agriculture, medical research, and pharmaceuticals. Indiana now has almost 50,000 bioscience jobs.

The challenge will be to fill those jobs, not only with new graduates, but with retrained mature employees from manufacturing and other industries.  Training will be the byword for our state.  Training will certainly be the key for many of my Indiana bankruptcy clients as well as for those I'm helping avoid bankruptcy or foreclosure.

I've mentioned often in these Indiana bankruptcy blogs that divorce is one of the three leading factors leading to bankruptcy (along with medical expenses and job layoffs).  Sometimes, it's financial problems that cause divorce; often divorce leads to financial problems for one or both of the couple.  Whichever the chicken or the egg, these two negatives, while they may add up to a positive in arithmetic, (and even, in the long run, for the participants), short-term, they spell t-r-o-u-b-l-e.

Three basic principles are worth knowing right off the bat:
a) Bankruptcy deals only with debts that exist on the day you file.  That means, if a divorce decree creates any obligations after that day, those won't be included in the bankruptcy. 
b) The general rule is that support obligations you already have from a divorce (child support, life and health insurance premiums, and alimony, for example) are not changed by the bankruptcy.
c) If you're the one receiving the support, generally that money is exempt if you were to file bankruptcy.

Obviously, both divorce laws and bankruptcy laws are too complicated to be explained in three bullet points. I offered some further details in former blogs ("Together For Debtor Or Worse" and "Together For Debtor Or Worse - It Depends"), Having both your professional advisers (the divorce attorney and the bankruptcy attorney) talking to each other is a very, very good idea.

If divorce and bankruptcy are visiting your life at the same time, you're suffering more than your share of stress, that's for certain.  Try to remember, this, though: both legal proceedings - divorce and bankruptcy - have the same basic goal, namely helping you make a fresh start.  (People going through divorce and bankruptcy can use a fresh start - big time!)

As I've mentioned often before in these Indiana bankruptcy blogs, divorce is one of the three leading factors leading to bankruptcy (along with medical expenses and job layoffs).  Sometimes, it's financial problems that cause divorce; often divorce leads to financial problems for one or both of the couple.  Whichever the chicken or the egg, these two negatives, while they may add up to a positive in arithmetic, (and even, in the long run, for the participants), short-term, they spell t-r-o-u-b-l-e.

Three basic principles are worth knowing right off the bat:
a) Bankruptcy deals only with debts that exist on the day you file.  That means, if a divorce decree creates any obligations after that day, those won't be included in the bankruptcy. 
b) The general rule is that support obligations you already have from a divorce (child support, life and health insurance premiums, and alimony, for example) are not changed by the bankruptcy.
c) If you're the one receiving the support, generally that money is exempt if you were to file bankruptcy.

Obviously, both divorce laws and bankruptcy laws are too complicated to be explained in three bullet points. I offered some further details in former blogs (Together For Debtor Or Worse and Together For Debtor Or Worse - It Depends), Having both your professional advisers (the divorce attorney and the bankruptcy attorney) talking to each other is a very, very good idea.

If divorce and bankruptcy are visiting your life at the same time, you're suffering more than your share of stress, that's for certain.  Try to remember, this, though: both legal proceedings - divorce and bankruptcy - have the same basic goal, namely helping you make a fresh start.  (People going through divorce and bankruptcy can use a fresh start - big time!)

In my Indiana bankruptcy blogs, I've been sharing both good news and bad about the job market in different parts of the state.  As a bankruptcy lawyer, I have a very intense interest in jobs, which are a key factor for my clients as they rebuild their financial lives following bankruptcy.  While we Hoosiers have enjoyed quite a lot of excellent news on the economic development front, the airline industry has delivered another bad news blow.

In earlier blogs, (see ATA Business Bankruptcy Plan Blown To BIts and More On The ATA Business Bankruptcy Story), I noted that 560 Indianapolis workers lost their jobs when ATA shut down.  Now we learn that Republic Airways will eliminate 500 jobs in the next few months.  Republic focuses on a business sector different from the one ATA served.  ATA transported supplies and troops via FedEx for the Pentagon, while Republic flies on contract for big airlines (Continental Connection, Delta Express, American Connection, U.S. Airways Express, etc.).  These big airlines are reducing operations, hence the reductions at Republic.

Having served as a consumer bankruptcy attorney for close to twenty-five years,
I know all too well that job layoffs are one of the three leading causes of bankruptcy.  I also know that airline jobs tend a)to be on the higher end of the pay scale and b) to require skills not easily transferable to other industries (think about all the pilots, for example - Republic had hired 670 new ones not longer than a year ago!)

It's hard to keep planes soaring when oil prices are doing that.

With many of the financial woes I hear about (particularly in my Indianapolis bankruptcy law office) having to do with housing problems, it's nice to learn about a very successful Indianapolis affordable housing option.

Mapleton Park is a 25-unit apartment building in the Fall Creek area of Indianapolis.  This location provides affordable housing plus support services for homeless and very low-income families, including veterans.

The sponsor of Mapleton Park is Partners in Housing Development Corporation.  This group purchases buildings that are largely unoccupied and turns them into housing.  The funding for this particular project came from a Federal Home Loan Bank grant.

In my Indiana bankruptcy blogs, I always stress that the most important chapter of any bankruptcy story is the sequel, because that's the stage at which I help people rebuild their financial lives after emerging from bankruptcy.  I was happy to hear that Partners in Housing has the same idea.  Working together with the Homeless Initiative Program, Partners in Housing helps the homeless with employment and training opportunities so that those folks can become productive citizens again. As a bankruptcy attorney in Indianapolis and around the state of Indiana, I applaud initiatives like this one at Mapleton Park.

My banker friend R. (who shared the sad story about the Oregon homeowner who'd waited until it was too late to get help avoiding foreclosure) told me his thoughts, as a real estate banking professional, about that story and about the "mortgage mess" in general.

"In this case, the reason the man got behind on his mortgage isn't the important thing. People tend to want to look for blame.  I think it's almost ingrained in us to do that now.  It doesn't matter if the man originally got his mortgage by looking only for the lowest rate and not seeking the advice of an experienced mortgage lender.  It doesn't matter if he lied on his application to inflate his income.  It doesn't matter if his mortgage lender got him approved for a mortgage that was high risk just to make a commission.  I don't know if any of those things happened and frankly don't want to know.  The bottom line and lesson here is that the homeowner waited too long to get help, just hoping that things would 'work themselves out'. I don't know this individual well, but it's pride, in my experience, that has been the reason people don't seek help."

"It's important to remember", added R., "in this mortgage environment, banks really don't want to own your home.  There are options to help people in trouble, and it's extremely important to get out in front of the trouble immediately.  It could be the difference between losing or keeping your home."

My goodness, R.!  You must have been reading my bankruptcy blogs - I couldn't have made the case any better than that!