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.

Every month or so, I like to keep my bankruptcy blog readers up to date on the job market in our state.  As a bankruptcy attorney serving clients in 38 Indiana counties with offices in Bloomington, Columbus, Anderson, and Indianapolis, I’m always on the lookout for news that has to do with the availability of jobs.  That’s because, as I’ve often explained, having a regular source of income and benefits is extremely important to my clients who are rebuilding their financial lives following a bankruptcy filing.  Clients who have filed a Chapter 13 bankruptcy probably already have regular jobs, or at least sources of regular income, but it’s important that layoffs not derail their bankruptcy debt repayment plans.  Clients who have filed Chapter 7 bankruptcy, on the other hand, need to gain control of their regular finances and keep bills paid.

Overall, Indiana has lost about 12,000 manufacturing jobs this year.  To put our situation in perspective, however, it’s important to mention that the 5.8% unemployment rate in Indiana is lower than that in Illinois, Kentucky, Michigan, or Ohio.

Negative news during the past month included the bankruptcy filing by Steve & Barry’s, a discount retailer in Washington Square and Lafayette Square shopping malls. Logistics companies, one of our strong suits in Indiana, are suffering from high fuel costs.  Two trucking companies have filed bankruptcy, Tradewinds (in Arcadia) and Icon Transportation (in Indianapolis).  Chrysler announced a plan to cut 1000 jobs.  (While they say most of the effect will be on jobs in Michigan, the cut could affect Chrysler's 670 salaried workers in Kokomo.) Indianapolis-based Davis Homes closed down for good, affecting not only their own employees, but possibly construction workers and suppliers from other firms as well.

On the good news front, Nestle is expanding its Anderson plant by 260,000 square feet, while Cooper Tire & Rubber Company is moving into a new building in the Franklin Tech Park.  Meanwhile, in Terre Haute, N.E.W. Customer Service announced it would create 480 new jobs by 1011.  In northern Indiana, Zimmer Corporation announced it will be needing at least 100 new workers. Right near where I live and shop, Nordstrom at Keystone Crossing Fashion Mall announced it will be hiring 250 workers to staff its new store.

Bankruptcy is all about rebuilding and fresh starts.  Observing all the changes in the job market in Indiana, I need to remind myself that sometimes demolition needs to be done before new structures can rise.  The advice I offer my clients - keep learning, seek training, plan the work and work the plan.

As of the beginning of this month, all but one of the 38 Indiana counties served by my Indiana bankruptcy law offices have been added to the federal disaster declaration list. This is one of those bad news/good news things I am so used to in my line of work.  What I mean is that, when clients come to see a bankruptcy attorney, they're wrestling with bad news, not good.  Nevertheless, it's good news that they've sought professional help, so we can get to work on them making a fresh start. I think the news about the disaster list falls in the same category. Obviously the flood damage is very, very bad news.  The fact that help is available for eligible individuals and businesses to recover from the effects of severe storms and flooding, though, is the beginning of something good.

The latest two counties to be added to the list are Hendricks (Danville area) and Tippecanoe (Lafayette areas).  Officials from the Indiana Department of Homeland Security and the Federal Emergency Management Agency (FEMA) made the announcement on July 1st.  Counties already included are Adams, Bartholomew (which I mentioned in my blog on Columbus, With HUD Help, Columbus Homeowners Hit By Flooding Might Avoid Foreclosure), Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Marion, Monroe (Bloomington area), Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Vermillion, Vigo, Washington, and Wayne.

As a personal and business bankruptcy attorney in Indiana, it's vital that I help my clients locate and then navigate all the resources available to them to avoid foreclosure, negotiate with creditors, and then, if bankruptcy is inevitable, select which class of bankruptcy filing is best for their situation.  Many Indiana residents were under severe financial pressure even before the flooding, due to some combination of the usual factors that lead to bankruptcy (medical expenses, divorce, job layoffs, housing crisis, and tax liens).  Storm damage to homes and business in these counties only added to the problem. But apparently help is not merely on the way - it's here!  My task is to help people find and use that help. 

Being a bankruptcy lawyer in Indiana is all about help - giving help and finding help.  Lately, Indiana homeowners in many of the 38 counties I serve have been needing all the help they can get.  Columbus, in Bartholomew County, is one of the four cities in which I have bankruptcy law offices, and that area was one of the hardest hit.   In an earlier blog, For Flood Victims, FEMA Aid Can Help Without Hurting In Bankruptcy, I talked about the special aid offered through FEMA (Federal Emergency Management Agency), through the Small Business Administration, and through the Indiana Bureau of Motor Vehicles.

Helping clients avoid foreclosure on their home (whether they are renters or owners) often plays a large part in the assistance I offer through my four Indiana bankruptcy law offices. It's important for me to be familiar with all the resources available to clients facing possible foreclosure.  It was welcome news to me, therefore, when HUD (U.S. Housing and Urban Development) announced support for homeowners and low-income renters forced from their homes during the severe storms.  There are several varieties of help offered, but one of the most significant is that HUD is granting immediate foreclosure relief by granting a 90-day moratorium on foreclosures of FHA insured home mortgages.  HUD also urged loan servicing companies to offer loan modifications, re-financings, and to waive late charges.  What's more, HUD has a loan program for rehabbing homes that are salvageable. These relief efforts are being offered in almost all the counties I serve, but Columbus was certainly one of the hardest-hit , with hundreds of homes and dozens of businesses severely damaged or even totally destroyed.

Emerging from bankruptcy always involves rebuilding of financial lives.  Now, because of the flood damage, many of my clients will be involved in rebuilding of another sort as well.  By helping my clients locate and take advantage of all the different flood assistance resources, I'll be involved in their rebuilding process on both counts!

With one of my four Indiana bankruptcy law offices located in Columbus, I'm keeping a very close eye on news about the awful flooding there.  In earlier blogs I observed that, for families and individuals financially squeezed by job layoffs, divorce, or medical illness, flood damage could very well push them over the financial edge.  Matters are very serious, indeed in Columbus, Indiana.  However, some hopeful news has started to filter out of this hard-hit area.

Columbus Regional Hospital sustained no less than $25 million of damage, and will be closed for the next couple of months.  Still, hospital officials announced, it will continue to pay its employees.

Flood victims have begun receiving money and even debit cards through the Red Cross to help them buy supplies, food, and clothing.  Salvation Army and many other nonprofit organizations are helping as well.  The Indiana Bureau of Motor Vehicles is working with car owners whose records were lost or destroyed, and insurance companies are under by the state to extend the grace period for payment of premiums before cancelling coverage. 

FEMA (Federal Emergency Management Agency), a division of the U.S. Department of Homeland Security, offers assistance for basic needs not covered by insurance.  SBA (the Small Business Administration) offers low-interest disaster loans to help homeowners, business owners, and even renters restore or replace destroyed property.  Some of this aid needs to be repaid, most does not.

Even with all this help, for some individuals and families, it won't be nearly enough.  When too many negative factors pile up and impact someone's financial situation, and then flooded property is added to the mix - sometimes the only recourse is to use the safety net of the Indiana bankruptcy system.

There is one very important and very reassuring fact about FEMA help.  Money received from FEMA cannot be counted as an asset or as income in bankruptcy.  That means FEMA money cannot be directed by the court to pay creditors.

So, as water levels go down, hopefully things will begin to look up in Columbus, Indiana.

I've been writing a lot lately about the changing jobs market around the state of Indiana.  As a bankruptcy lawyer in Indiana for more than twenty years, I see a job market today that is very different from how things were when I first went into practice.  Nowadays, as I counsel with my bankruptcy clients, it is crucial for them, as they begin the process of rebuilding their financial lives, to be flexible.  That means many will need to be trained for the new types of jobs - in technology and distribution and life science more than manufacturing - that our employers will have to offer.  My main bankruptcy law office is in Indianapolis, but I have offices in Anderson, Bloomington, and Columbus, and I always stay alert for developments in the economy.  One of the ways in which I stay current is reading - newspapers, magazines, books, and other people's blogs.  I need to arm myself with information in order to provide up-to-date, meaningful advice to my Indiana bankruptcy clients.  Being a "news worm" is a way to do that, along with talking to lots of people and listening carefully to what they have to say.

Since the job market is a topic never far from my mind, I was fascinated to find an article in Esquire Magazine, called "You'd Make A Good President".  Apparently, in Great Britain, there was a nationwide appeal in the press for "tall people with athletic potential". The purpose of the ads was to recruit Olympic athletes for the 2012 London games.  The Esquire reporter comments that what fascinated him about this appeal was that it "eradicated self-selection from the process of achievement".  In other words, the project of recruiting athletes through a general ad operated from the belief that the average tall person might not realize he was perfectly designed to be an athlete!  The same logic might apply to jobs and careers in general, the author points out - most people don't know what they might be good at!  "People select careers that seem interesting or lucrative, but they enjoy only jobs for which they have an aptitude."  So, asks writer Chuck Klosterman in Esquire, what if instead of having people attempt to select and pursue careers, employers analyzed the nature of jobs, figured out which qualities were most central to success at those jobs, then recruited people who had those qualities?

"Neat!" was the word that came to my mind when considering Klosterman's job recruitment plan.  On a more serious note that relates to my work, I realized that many of my bankruptcy clients had actually chosen work for which they were personally well-suited.  Despite this fact, many clients became victims of changes in the economy that made their jobs obsolete or at least unsustainable.  In a way, these clients are being forced to re-evaluate their suitability for new careers they had never before considered.  Very much like the bankruptcy process itself, the changing economy offers people a fresh start.  Maybe it isn't exactly the sort of fresh start a person would have chosen.  But, hey, this is the way things are right now, and we all need to keep facing forward….

In earlier bankruptcy blogs, I wrote about the changing jobs market around the state of Indiana.  I explained why my Indiana bankruptcy clients, as they begin the process of rebuilding their financial lives, will need to be flexible and to get training for the new types of jobs that the state will have to offer.  As an attorney in Indianapolis (with offices in Anderson, Columbus, and Bloomington as well), I’ve watched our capitol city turn into a center for new technology.  The other day, in a magazine published by Indy Partnership, I read some impressive statistics about Indianapolis business.  The city and its suburbs serve as home to almost 2,000 information technology companies.  In fact, one of the fastest super-computers in the world is co-managed by Purdue and Indiana University.  Word is spreading that Indianapolis, which used to be known for manufacturing, is becoming a heartland for modern technology.  (While I love communicating through my blogs, some might call me technologically challenged; still, I know an important trend when I see one.)

As an avid reader of all business-related news, I was also very, very encouraged to read about a company called ANGEL Learning, a developer and marketer of online learning systems.  This company has been so successful in Indianapolis, according to the Indy Partnership article, it plans to double its workforce in the next two years.  News like that about job opportunities is music to my ears. Online learning can provide a way for my Indiana bankruptcy clients to train themselves for the new job opportunities that will be available for them as they re-enter the work force or make needed career changes. 

And, while there’s no plan for any career changes in my life, it looks as if I’m going to need to brush up on my technology skills if I’m to “get with the program” and participate in all the excitement to come.

So, your small business is starting to show signs of financial stress.  You've followed the advice in my earlier bankruptcy blog and kept the taxes and basic bills paid, cutting back on expenses wherever possible, all the while negotiating more lenient payment terms with suppliers and creditors.

As a small business bankruptcy attorney in Columbus, Bloomington, Anderson, and Indianapolis, I can tell you about two other steps you'll want to take to protect your business interests, and one thing not to worry about.

One item to put on your to do list is locking in insurance.  If you end up filing bankruptcy, you may have trouble finding an insurance carrier willing to issue, or to renew, coverage.  So, right now, get insurance in place that extends at least a year.  Then, as long as you keep the premiums current, the insurance can't be cancelled.

Second to-do: make sure you have money in a checking account with a bank other than the one to whom your business owes a lot of money.  Many business loans have terms allowing the lender bank to go into the checking account you have with them without notice to get payment.

One thing not to lose sleep over is having the utilities shut off.  If you've paid the bills, just because you file bankruptcy, the utility companies cannot shut off services, although they might require a deposit.

I think you can see why I advise thinking about all these details way in advance of being at the point of a forced bankruptcy.  The more preparation you can do up front, the less aggravation later on.  And, as I've said before, times are hard, but with some preparation and expert professional advice, you can weather the storms.

Here's a question I, as a bankruptcy attorney, hear all the time:  Does filing bankruptcy help avoid foreclosure? And here's the answer:  Yes and no.  Filing a Chapter 7 bankruptcy triggers the "automatic stay" I've been writing about in former blogs.  The stay is sort of a "time out" period for creditors, when no collection efforts can be made, and that includes foreclosing on a home.  And, no, it's not permanent.  What the automatic stay does is buy time, time to take one of the following steps:

First, in the right circumstances, a debtor could "catch up" by bringing his house payments current, perhaps over a five-year period of time.  Obviously, the homeowner needs to prove he or she is now in a position to resume regular payments.  But, even if a Chapter 13 bankruptcy isn't feasible, the bankruptcy automatic stay almost always buys time to strategize and plan, time to consider those four tactics I spoke about in an earlier blog:  mortgage modification, repayment plan, deed in lieu of foreclosure, and short sale.  And, almost always, the stay buys time to stop an immediate sale of the home, keeping the wolves at bay.

Having spent my entire career working on behalf of consumers and small business owners and helping them cope with financial challenges, I always come back to the same message.  I say the same things to everyone I talk to about bankruptcy, whether I'm seeing people in my office in Columbus, Indiana, or whether it's in Anderson, Bloomington, or Indianapolis:  If finances are a serious challenge,
1. Face up to your situation.  2. Get help.  3. Get help early!

I've done a lot of writing in this blog over the past few months about the fact that the bankruptcy system is a mechanism for offering individuals and business owners a new start.  But when people exploit the court system by lying about their assets, they are cheating creditors out of their rights, and the bankruptcy system cannot work for everybody's benefit.  Therefore, when a person is caught defrauding the bankruptcy court, punishment can be quite harsh.

Just last week, former boy band producer Lou Pearlman was brought back from Indonesia to face U.S. federal bankruptcy charges.  You may not recall the name, but Pearlman created two boy bands of whom you've probably heard: Backstreet Boys and 'N Sync.  Pearlman had been sued many times before and is even now facing charges in several states for running illegal investment schemes and laundering money.  But the "straw that "broke the camel's back"  was that Pearlman, estimated to own a fortune exceeding $150 million, made false statements about his assets in bankruptcy court.

As a bankruptcy attorney in Indiana for the past almost twenty five years, I've spent many, many hours in bankruptcy courts representing tens of thousands of clients from Columbus, Bloomington, Anderson, and Indianapolis.  I know that the bankruptcy system is there to provide a much-needed safety net for honest debtors who, very often due to forces beyond their control, cannot take financial care of themselves and their families without help.  But for the system to continue to function, the facts of each situation must be fairly and completely stated, so that the interests of both the creditors and the debtors can be addressed by the court. 

The FBI and the U.S. bankruptcy courts, in fact, are showing little patience for Lou Pearlman's fraudulent omissions of detail fact about assets which could be used to satisfy his creditors.  It's possible that Pearlman may not only go to jail for his dishonesty, but have all his debts forever deemed non-dischargeable in bankruptcy.

The cheerful song heard at Disney theme parks, "It's A Small, Small World" proved sadly true last week.  Chrysler cancelled its contracts with its longtime supplier of plastic parts, Plastech, forcing that company to file for Chapter 11 bankruptcy protection.

Because my life's work is so tied up with debt and bankruptcy, I'm interested in news stories that can have implications for my Indiana bankruptcy clients.  When I came upon this particular item, I couldn't help reflecting that there was a domino effect here.  I think that effect actually began far away in the Mideast, where the price of oil has been rising sharply.  Since oil is the key ingredient in the plastic parts Plastech was making for Chryslers, Dodges, and Jeeps, Plastech wasn't able to buy enough oil to keep up its parts manufacture.  Then, in danger of having its car production slow or even stop altogether, Chrysler needed to find another supplier.  To save time and costs, Chrysler wanted to take back from Plastech all the thousands of molds and dies used to make the parts.  When Plastech filed bankruptcy, the courts prohibited Chrysler from taking anything from Plastech, and then the dominoes really started to fall.

Chrysler shut down assembly plants in four states, idling 10,500 workers. And, since Plastech made parts not only for Chrysler, but also for Ford and GM, thousands of workers in those other companies have been affected as well, including, of course, those in Indiana.   The bankruptcy court is encouraging a settlement between Chrysler and Plastech, but meanwhile, thousands upon thousands of families are in financial trouble.  As usual, individual people, their spouses, and their children - they are the last dominoes in the chain reaction.

As a bankruptcy lawyer in Indiana, I know this game of dominoes all too well.  Despite persistent myths about folks overspending and neglecting to pay the bills, truth is, most often bankruptcy is the last stage in a sad, sometimes inexorable chain of events.  That chain is often begun months or even years earlier and perhaps states or even oceans away.  When people are sitting in my bankruptcy law office in Indianapolis or Anderson, or Columbus, or Bloomington, it's rarely one thing that brought them there.  No, it’s a chain of events beyond their control, and several forces in combination that lead them to seek protection under Indiana bankruptcy law.

And right there, where the last dominoes are falling, that's the spot where you'll find me, helping my clients pick up those dominoes and, with them, build a fresh start using the bankruptcy laws.

As an Indiana bankruptcy attorney, I see my share of financial hardship and distress, much of which is brought on by small business failures and corporate layoffs in our state.  I found my mood lifting as I read the end of year report put out by the Indiana Economic Development Corporation.

First of all, at 4.7% unemployment, Indiana actually had the lowest unemployment rate in the Midwest for the sixth consecutive month.  We've been reading about plants closing and about jobs lost, all of this undeniably true, but the IEDC counts 22,627 new jobs committed in 2007. 

Business owners can take heart as well, because according to Forbes in a July 2007 report quoted by IEDC, Indiana has the lowest business cost index in the Midwest, fourth lowest in the country.  That statistic will be powerful in attracting new businesses to our state, as you may imagine, and so will the fact that Indiana ranks first in the Midwest in the Business Tax Climate Index

As I share this extremely hopeful report with you, I'm so very, very conscious that this does little to alleviate the pain being felt by many individuals and small business owners that I am seeing in my bankruptcy practice right now.  People who are out of a job and who have families to support, owners of small businesses that just could not compete with everything going on in the economy now -  they're sitting across the table from me in my  Indiana bankruptcy law office in Indianapolis, or perhaps the office I have in Columbus, or the ones in Bloomington or in Anderson, Indiana.  These folks don't have time to wait until all these wonderful new job opportunities start happening.  Nevertheless, this IEDC report speaks to me and helps me speak hope to my bankruptcy clients.

So, as I help people create and then work through a strategy to deal with their financial problems and then to get back on their feet personally and with their business, I realize that their chances of rebuilding their lives are actually pretty good.  Yes, there's work to do before that happens, and quite a bit of raw courage needed to get through.  But at the same time, I can honestly see - and help my bankruptcy clients see -  better times ahead for Hoosiers!