I'm not much of an auto mechanic, but from my combing the news for bits about financial matters, I've learned how important axles are!  As a bankruptcy lawyer with offices not only in Indianapolis, but providing bankruptcy services in sixty counties around the state of Indiana, I have helped thousands of people with their financial problems.  Many of my bankruptcy clients either are or once were employed in the automotive industry.  So, my interest in axles comes not only from the fact that I and my family members own cars, but because I need to understand al the economic factors that impact my bankruptcy clients.  And lately, as I've said, axles have been in the news a lot.

To give a little background, the latest big story started with a strike by American Axle & Manufacturing Company auto union workers in New York and Michigan.  That led to the 6000 Indiana auto workers being idled.  Even though American Axle has no factories here, American Axle makes most of the axles used on Chevy and GMC pickup trucks, and those axles are used in automotive plants in Indiana.  One good thing that happened was that, to keep the truck assembly plants operating, GM closed a plant in Texas and one in Flint that were making other types of vehicles, and then used the axles meant for those places for pickup truck plants in Ft. Wayne.  That decision helped save some auto jobs in our state.  On the negative side, falling orders from GM have affected several hundred Indiana workers in Indianapolis, Marion, and Bedford.

It's a struggle - a glimmer of good news here, a chunk of bad news there.  All the layoffs make it very tough even for many financially responsible individuals to keep the bills paid.  And that's where Indiana bankruptcy help in the form of the  court system comes into play, offering a safety net to help Hoosiers hard hit by circumstances beyond their control get a chance at a fresh start.

I always get a lot of "I heard that…" statements whenever people find out that I'm a bankruptcy attorney in Indiana.  Many people, never having given much thought to the subject until their debt problems overwhelmed them, are misinformed. They have the mistaken idea that their particular problem can't be addressed by filing bankruptcy.  That's because they have heard a lot of "CAN'Ts".  I thought it would be good to write one of my blogs about the CANs of bankruptcy.

In an earlier blog I wrote about how forgiveness of debt through a settlement can cause a tax problem, and pointed out that when debts are discharged through the court system in a bankruptcy, there is no additional tax.

While we’re talking about tax, one of the big myths about filing bankruptcy in Indiana is that you can get rid of some debts through filing bankruptcy, but you can never get rid of tax bills. The good news is, that’s not true. As a bankruptcy attorney in Indiana for many years, I can tell you that we get rid of old income tax bills for clients all the time. Maybe they have lawsuits and judgments of all kinds, and the one place they never expected to get any relief is from the IRS. I'm here to tell you that one of the big bankruptcy services I've been able to provide is in the area of back taxes for personal bankruptcy and and small business bankruptcy clients.  We have discharged millions in tax debt in bankruptcy over the past 23 years.

How old do the taxes need to be to qualify? Income taxes more than three years old qualify for forgiveness under the Indiana bankruptcy laws. True, it's not just a snap of the fingers; there are three or four qualifications that a personal needs to meet in order to be excused from the taxes, but once those things are met, the taxes are forgiven. (I need to add here that bankruptcy does not get rid of taxes withheld from your paycheck or sales taxes, not even three year old ones.)This tax thing is just one more reason to work with an experienced bankruptcy professional – you need help making use of all the legal advantages you can.

      Even though more than one million Americans file bankruptcy each year, there’s a myth floating around that bankruptcy is for deadbeats.  With me being a bankruptcy attorney in Indiana, I see hundreds of different people in my office every month, and I can certainly attest to how big a myth that is!  Still, I like to read what other bankruptcy attorneys from other states are saying about their bankruptcy clients. 

    One article I read recently comes from a Pennsylvania attorney named Mr. Otto.  Otto talks about all the negative feelings that debtors tend to have about themselves when it comes to using bankruptcy services.  Some of these negative feelings are caused by the real financial problems people are facing, but very often the bulk of the negativity comes from this myth about being a deadbeat. 

     In fact, many people have been responsibly handling their money for many, many years, and then – boom!  An extended illness or a layoff just came in and wrecked all their carefully-laid plans.  Now they’ve got creditors making their lives miserable, and they themselves are letting negative self-talk and blame make their own lives even worse.

      Mr. Otto suggests that debtors deal directly with their own feelings about bankruptcy, rather than repressing them.  Once a person has faced up to his own feelings, he can be ready to let go of those feelings and move on with the rest of his life.  One of the main things he advises is to stop laying blame – stop blaming others, and most important, stop blaming yourself, he says.  Have self-compassion, he tells people going through a bankruptcy.

     You know, that might just be good advice for everybody!

   The more I think about that old country song "Looking For Love In All The Wrong Places", the more it reminds me about how people overwhelmed by money problems try to get help in some of the wrong places.  As a bankruptcy attorney in Indiana for so many years, I know these poor people are merely postponing and avoiding facing up to their problems, rather than taking the action steps to turn things around.

      In a former blog I talked about Debt Settlement Agencies, and why these are almost never a good solution or even a good first stop.  A second type of place many people turn to when they need debt help is a credit counseling  service.  In fact, whenever I tell someone at a social or business gathering what I do for a living, namely that I'm an Indiana bankruptcy attorney , the next question out of their mouths is often "Isn't it better for someone to first try a credit counselor before filing bankruptcy?"

      I need to remind you that I never deal in absolutes, saying one solution fits all people who need debt help. And so, rather than getting all excited about why one course of action is "the best", I always stop and realize that the person asking the question probably doesn't understand what credit counseling actually is.  Credit counseling agencies are supposed to offer education about good financial habits, advising folks on sticking to a budget, being faithful about paying bills on time, and the like.  What is supposed to be secondary, but often is the main kind of advice offered (for a fee, I might add), is negotiating with creditors in the same way that debt settlement agencies do.  In other words, the counseling agent talks to the credit card company to try to get that company to settle for a lower monthly payment or even a lump sum that is less than the amount really owed.

      It's important to know, by the way, that credit counseling agencies were examined recently by the IRS (you can read about this on the IRS website at www.irs.gov) and largely found to have failed to do the public enough good to qualify as tax-exempt agencies.   The investigators found that many agencies were too closely tied to for-profit credit companies and were more interested in benefiting them than the clients.  However, even if a credit counseling service does a good job, it may still not be the best place to go, for two reasons:

      First, people with serious debt problems need to know all their options, and that includes legal options which only a bankruptcy attorney is qualified to discuss!  An experienced bankruptcy attorney can offer counseling on managing money and budgeting, but a credit counseling service is not allowed to offer legal advice.  They can't talk about Chapter 7 or Chapter 13, about lawsuits people are facing or even about foreclosure on a home.  Only attornies can offer complete bankruptcy information and bankruptcy services.

      The second important reason is time.   When late fees and penalties are piling up by the day and creditors are calling you at home and at work, time is of the essence.  It's crucial that you get legal advice quickly and select a course of action.  This may or may not include filing a bankruptcy petition, but if you had gone first to a credit counselor and paid a fee, precious time would have elapsed, closing off some options.

      Real life statistics bear out what I'm saying about avoiding delay.  The majority of people in Indiana who come to me considering bankruptcy are not financially irresponsible people. They never have been.  "Life happened" to them.  Either a serious illness in the family occurred, with tens and sometimes hundreds of thousands of dollars in hospital and treatment bills, a breadwinner was laid off from work, and sometimes there is an unexpected and expensive divorce going on.  Very often it's a combination of more than one of these things.  Counseling on how to manage a budget isn't really going to help in these cases, and meanwhile, the bills are mounting every day.

      So, what I really want to say to people is this: Don't look everywhere before coming back to where you should've started in the first place.  As bankruptcy attorneys in Indiana, I and the other attorneys in my office are first and foremost counselors. That's precisely what we do every day of the week.  But, unlike debt settlement agencies or credit counseling bureaus, we can help you look in all the right places for a plan that fits you and the situation you're in, and we can help you do it right now!