Bankruptcy Services Indiana

In high school we were taught that multiplying two negative numbers gets a positive number. That particular tidbit came to mind the other day in a discussion I was having with one of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices.

We were actually talking about the drop that has been taking place in asset values – home values are depressed and investment asset values are down.  In short, the value of people’s “stuff” has dropped significantly over recent years.  What’s not down is the debt people have accumulated just trying to keep up. So, as a debt consolidation lawyer offering bankruptcy services in Indiana, what I’m seeing more and more of is negatives, starting with those negative asset values.

The second big negative that we lawyers for bankruptcy in Indiana are seeing is the difficult job market.  With layoffs and downsizings, and with restaurant chains and stores closing every day, lots of income that people need to pay expenses is being reduced or lost altogether.

So, can these two negative factors possibly be turned to advantage, becoming a positive? In a way, yes.  Since I've served as an Indiana lawyer for bankruptcy for 25 years, and in fact helped write the exemptions portion of the new bankruptcy laws of Indiana, I couldn't help thinking that California attorney Cathy Moran hit on something when she asks “Is Bankruptcy Your Best Investment?” Moran lists several reasons why filing personal bankruptcy during not-so-good economic times can be a very good idea, and one of those reasons is the drop in asset values I’ve mentioned.

In these Bankruptcy in Indiana articles, I’ve often explained why the idea of “losing everything” when you file personal bankruptcy in Indiana (or even file small business bankruptcy in Indiana) is simply a myth.  And the reason it’s a myth is bankruptcy exemptions. There is a list of property that debtors are allowed to keep, assets that do not need to be sold to pay back creditors. Fact is, it’s very, very rare for clients to lose any assets at all, because there are exemptions that help protect your house, your car, your truck, your household goods and furnishings, your IRA and other retirement plans, your life insurance, and your wages.

Going back to that high school math lesson I alluded to earlier about negatives adding up to a positive, what attorney Moran was alluding to when she said bankruptcy might prove a “good investment” was the fact that when exemptions are applied to assets that are way down in value because of the economy’s downturn, while at the same time income levels are down, the end result is people keep more of their assets..

No, filing individual bankruptcy in Indiana may not be anyone’s idea of a positive.  But the combination of a down economy and Indiana bankruptcy exemptions can work to the advantage  of debtors, becoming a positive force in their fresh financial start!

You may or may not have ever attended a 341 Creditors’ Meeting, but I’ve got you beat.  In my 25 years as a debt consolidation lawyer offering bankruptcy services in Indiana, I’ve attended tens of thousands of them.

Any meeting held at a court house may seem scary to a first timer.  After all, the meeting involves taking an oath to tell the truth before answering questions about your personal finances. Even the name is intimidating, because the creditors in question are people and companies to whom you owe money!

Since one aspect of my work is preparing clients for these meetings as part of offering Indiana bankruptcy help, I can tell you that the process is surprisingly fast and smooth.  Many 341 meetings are over in less than half an hour and (most surprising of all to Indiana bankruptcy filers), in most cases the creditors themselves don’t bother showing up!

All the Indiana bankruptcy attorneys who work in the Zuckerberg bankruptcy law offices have had the same experience – showing up for a creditors’ meeting and finding no creditors there!  So, who IS there? Well the meeting is run by a court-approved bankruptcy trustee (typically a local attorney employed by the court).  You’re there, and your attorney is there.  If you’ve filed bankruptcy jointly with your spouse, then he or she is there along with you.  If it’s a small business bankruptcy in Indiana and you have partners in that business, they would come to the meeting as well.

The trustee asks you questions about the bankruptcy documents I’ve helped prepare, detailing your assets, your income, your financial obligations, and your debts. 

Have you read the document?  Is everything correct on it? Have you listed all your creditors?  Are you expecting any sort of prize, cash award, or inheritance?  Have you given away assets within the past six months? 

If creditors’ have come to the meeting, they are allowed to ask you questions as well.

Once the trustee if satisfied that all the information is in your documents and that you’ve answered truthfully, the meeting is over and the first stage of the bankruptcy process is complete.

Often, in these Mark Zuckerberg Bankruptcy in Indiana articles, I refer to the “bankruptcy court” or the “bankruptcy judge”. 

Truth is, though, that of the tens of thousands of people to whom I’ve offered Indiana bankruptcy help over the past 25 years, only a handful ever got to see a bankruptcy judge or “go to court” in the way we see in criminal cases on TV.  As all my colleagues in the four Zuckerberg bankruptcy law offices will confirm, most of your contact is with your Indiana lawyer for bankruptcy.

As your Indiana bankruptcy attorney, after I’ve helped you complete your financial statements and you’ve signed them, I submit those to the court on your behalf.  The only time you yourself would expect to be anywhere near an actual courtroom is at the bankruptcy creditors’ meeting, which might not even be held at the courthouse itself. (I’ll be explaining more about what happens at the creditors’ meeting in my next article.)

I can assure you, based on my experience as a debt consolidation lawyer offering bankruptcy services in Indiana, that even at the creditors’ meeting itself, you will not be facing a judge. Instead, the meeting is run by a trustee.  If you’re filing bankruptcy Chapter 7 in Indiana, the person in charge is called an Interim Trustee; if you’re filing under Chapter 13 bankruptcy law in Indiana, there will be a Standing Trustee.

The trustee is going to be in charge regardless of whether you're filing because you need payday loan debt help, help to stop foreclosure, help with medical debt, or even student loan debt help.  I will be working with you to prepare the petition, but the process itself is very standard.

The trustee is generally an attorney from the local community, working under the supervision of a U.S. Trustee connected with that region.  As an Indianapolis lawyer for bankruptcy, for example, I work within the Southern Indiana Bankruptcy District.
Once your bankruptcy petition has been approved, the trustee will be managing and overseeing the process.  You no longer need to deal with your creditors, who will be notified that you’ve filed personal bankruptcy in Indiana, and that they are to halt all collection efforts against you.  All that is handled by the trustee.

So, with whom can you expect to “hobnob” during the process of filing bankruptcy in Indiana? Briefly, with the bankruptcy trustee who is managing your case.  Most of the time, you’ll be dealing with an Indiana lawyer for bankruptcy like me!

“When someone promises to ‘eliminate your debt’ I can only guess that they are one of three things: a bankruptcy attorney, a sugar daddy, or someone who is convinced they have magical powers,” says financial planner Ken Clark, author of The Complete idiot’s Guide to Getting Out of Debt.

I couldn’t agree more. My 25 years’ experience as a debt consolidation lawyer offering bankruptcy services in Indiana have made me extremely leery of debt settlement agencies in general.

Last week alone, at least four couples and individuals came into to the Zuckerberg bankruptcy law offices to seek help filing personal bankruptcy in Indiana.  After months of working with a debt settlement agency, the very sad fact is that every one of these people was unsuccessful in staving off bankruptcy.  By waiting, each had spent a lot of money in debt settlement fees, all with the goal of avoiding bankruptcy.  That money is gone, along with some of their options, and the result is that the only viable path for them to regain their financial independence is – and always was – seeking relief under the new bankruptcy laws of Indiana!

“Although some organizations offer valuable assistance, they’re also allied with creditors and have an institutional bias against bankruptcy, even when it’s in your best interest,” claim James P. and John M. Caher, authors of Personal Bankruptcy Laws for Dummies, adding that "Although credit counselors may appear to be independent, many are on creditors’ payrolls, so their interests are at odds with yours. Debt consolidators, offering to replace your many monthly bills with a single “low-interest, easy payment loan,” make you believe you can get out of debt by borrowing more money.

It’s so ironic, all of us good lawyers for bankruptcy in Indiana who work in the Zuckerberg bankruptcy law offices agree, that just when someone is in the worst possible frame of mind to make an informed decision among all the different kinds of financial help being offered, is precisely when they’re forced to make that very decision!  What results, as my Columbus bankruptcy lawyer colleague wryly remarks, is that people arrive at our office with creditors literally breathing down their necks!   You know how there are shelters for battered women? Well, sometimes  our office has the feel of a shelter for battered debtors!

Can debt really be “settled”, consolidated, reduced, and “eliminated” the way some of these ads are promising? I’d like to remind Bankruptcy in Indiana readers of one important fact:

ONLY lawyers can offer legal advice, and ONLY legal advice can help debtors deal with wage garnishment, help stop foreclosure, and defend judgments.

“In business, virtue is not always rewarded,” begins the article in the Chronicle Herald, referring to the American Airlines bankruptcy, and to the fact that AMR had tried hard to remain solvent when most of the other airlines had long ago filed bankruptcy. After 25 years as a debt consolidation lawyer offering bankruptcy services in Indiana, I can tell you – that statement about virtue not always being rewarded is true of life in general! 

As we in the four Zuckerberg bankruptcy law offices continue to offer Indiana bankruptcy help in tens of thousands of different situations, it’s abundantly clear that life isn’t always fair.  Whether we’re helping couples or individuals through bankruptcy Chapter 7 in Indiana, using the new chapter 13 bankruptcy laws in Indiana, or helping small businesses file bankruptcy in Indiana – we see it again and again: Effort and virtue do not always bring the desired results.

As one of my Columbus bankruptcy lawyer colleagues often points out to her clients, we deal with small businesses and with individuals, helping them confront debt issues.  We help stop foreclosure through Chapter 13 bankruptcy law in Indiana, help small businesses gain control over their expenses, even offer payday loan debt help and student loan debt help.  What’s so ironic is that in just about every situation, the people face the same type of credit crunch that American Airlines faced.  But unlike the giants who are in the news, with analysts reporting on each financial move, the “little guys” often suffer in silence, hoping for some kind of turnaround that never comes.

What I really liked about the Chronicle Herald article was the headline: “Bankruptcy may help airline return to blue skies of profit.”  The reporter explained that AMR’s plan is to replace its aging fleet with newer aircraft that are cheaper to run.  “Indeed, by allowing AMR to shake off some of its liabilities and cut its future costs, it will be in a better position to pay for those shiny new planes.”

I use examples of large corporate bankruptcies to show how the bankruptcy process “buys time” for a debtor company to restructure.  The whole idea behind Indiana bankruptcy law is to help debtors get back on their feet and have a chance at a fresh financial start. You might say the purpose of bankruptcy in Indiana is to lead to “blue skies of profit”!

Post-bankruptcy, “American Airlines continues to operate flights, honor tickets, and take reservations.” explains the Associated Press. The reporter might have been talking about people who’ve filed personal bankruptcy in Indiana, as much as about a giant airline. Despite the many bankruptcy myths that circulate about how life will be interrupted by filing individual bankruptcy in Indiana, the truth is that life mostly goes on as usual, just without all the pressures that led up to the bankruptcy.

By the way, none of us who work in the Zuckerberg bankruptcy law offices was very surprised to learn about American Airlines. Remember that Delta, United, Continental, and U.S. Air have all gone through Chapter 11 reorganization bankruptcy.

Of course, despite my being a longtime debt consolidation lawyer offering bankruptcy information in Indiana, I’ve never had a mega- corporation such as American Airlines as a client.  As I study the news, however, I’m always struck by the similarities to the stories of small business bankruptcy in Indiana and even the stories of couples, of single moms, of service veterans, and young and old people who take advantage of the safety net offered to them by the new Indiana bankruptcy laws.

At the same time, as my colleague the Columbus bankruptcy lawyer reminds me, all of us who provide bankruptcy services in Indiana are keenly aware that there is bound to be a “ripple effect” whenever a large company files bankruptcy.  According to the Ft. Worth, Texas Star Telegram, “Economists, academics…and industry consultants are relatively unworried about how the airline’s Chapter 11 bankruptcy reorganization will affect the broader Fort Worth-Arlington economy and the airport in particular.”

Still, as the newspaper reporter points out, AMR has long been the country’s largest employer, and “the airline’s employees and retirees are likely to be among the first to feel the consequences of bankruptcy.” The government’s Pension Benefit Guaranty Corp. said last week that it expects to pay about $17 billion of the company’s $18 billion in promised retirement benefits.

On the surface, that sounds pretty good.  But, after 15 years offering Indiana bankruptcy help, I know that missing $1 billion is going to create a hardship for many retirees who are already financial stretched and need help to stop foreclosure on their homes, which have lost a lot of value.  Every day in my Indianapolis bankruptcy law office, I’m seeing folks who are having a hard time surviving financially in retirement, as the value of their homes declines and their healthcare and other expenses continue to rise. Of course, if they need student loan debt help as well, that makes the situation even more difficult.

For many years, as other airlines filed bankruptcy, some more than once, American Airlines resisted going down that path. Fortunately, the company did not wait until its problems got totally out of control; the airline has $4.1 billion to keep running while it restructures its debt.

The lesson for Bankruptcy in Indiana readers from Mark Zuckerberg is this: Seek professional help at the first signs of financial trouble.  Take a tip from American Airlines; by acting when they did, the company kept their options open, doors that would have closed had they continued to put off taking positive action.

Whenever you learn of someone filing small business bankruptcy in Indiana, you can bet the owners are feeling “the ripple effect”. As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I see the effects of “recession ripple” day in and day out in my legal practice. 

You know how it works – you throw a pebble into a quiet lake, and a few minutes later there are ripples in the water a dozen feet from where the pebble entered.  Whipsaw is a form of ripple, too.  Someone unexpectedly stops his car in front of you, and to avoid hitting him, you slam on the brakes. It’s often your neck that painfully snaps back, giving you whiplash.

For these Bankruptcy in Indiana articles, I like to use current headlines to clarify the way the bankruptcy process works, but even more important, to debunk the myth that filing bankruptcy in Indiana (or needing help to stop foreclosure,  or needing payday loan debt help) means the debtor was not responsible in handling his or her money affairs.

One of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices, knowing we have an office in Indianapolis, called my attention to a story in the Indianapolis Business Journal about an Indianapolis-based hotel owner who recently filed Indiana bankruptcy.

The company, an MHG Hotels affiliate which owns Comfort Inn in Avon and Comfort Suites in Fishers, just filed its case, one year after four other MHG suburban hotels had filed bankruptcy.

Back to the point of my story, the hotels’ owner was described in the IBJ as “a successful operator whose portfolio fell victim to forces outside his control.  Even though the hotels regularly won awards from franchisors for operations excellence, the travel and recreation markets they serve were decimated in the Great Recession.”

Because I and all the Indiana bankruptcy lawyers who work with me understand how very bitter a pill bankruptcy is for small business owners to swallow, we offer consulting services to help small businesses avoid bankruptcy, helping them prioritize the payment of expenses and negotiate with their creditors.

By the same token, we know that whether it comes to filing personal bankruptcy in Indiana, small business bankruptcy, or a combination of the two, sometimes there’s just no getting away from the ripple effect!

As any good bankruptcy attorney in Indiana would agree, the road to providing student loan debt help has been more like a roundabout than an avenue.

That’s because student loans are one form of debt that, under current federal law, cannot be discharged through filing personal bankruptcy in Indiana.  Instead, over the 25 years I’ve practiced Indiana bankruptcy law, I’ve worked to get debtors’ other non-secured loans discharged, thus freeing up cash that could go towards paying on student loan debt.

Student loans are unsecured loans. With a student loan there is no collateral, so, in an effort to prevent graduates from simply walking away from their student loans, the government made a big change in the law back in 1998, making it extremely difficult to have a student loan discharged in bankruptcy.

Apparently there’s someone else who thinks a more direct fix might be a better idea.  In fact, House Representative Hansen Clarke feels so strongly about student loan debt, he stated it’s “made a mockery of the American dream.” Clarke has proposed that student loan debt should be discharged in bankruptcy.

As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I liked Clarke’s answer when a reporter asked “Won’t there be an upsurge in bankruptcy if people could discharge their student loans?”

Clarke’s response: Forgiving student loans is a way to create jobs in our economy.  (This is exactly what we in the Zuckerberg bankruptcy law offices have been saying!) College grads, explained Clarke, can’t buy and furnish homes or start businesses, because they’re so burdened by student loan debt.  “It’s helping people who are working right now keep their money so they can spend it,” he added.

One of my Columbus bankruptcy lawyer colleagues echoed the sentiment:  “Wouldn’t it be a good solution if bankruptcy Chapter 7 in Indiana could include student loan debt help?” she asks.

The Veterans’ Day parade is over, along with the free meals for veterans from area restaurants and the playing of the “Armed Forces Medley” at concerts and business gatherings. The challenges facing veterans when it comes to finding jobs – now, that’s another story, as every bankruptcy attorney in Indiana well knows.

“As servicemembers return from Iraq and Afghanistan, they face a tough job market,” reports
Marisol Bello of USA Today. 

I was discussing this very issue the other day with the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices.  I realized that we’re all encountering veterans who, because of lack of a steady income, have reached the point where they need help filing bankruptcy Chapter 7 in Indiana, or even need payday loan debt help. 

The Indianapolis Star reported that homelessness takes a heavier toll on vets, who, once they become homeless, are more likely to stay homeless for longer periods than non-veterans.  Veterans are also more likely to suffer from serious health conditions. As a longtime Indianapolis lawyer for bankruptcy who offers Indiana bankruptcy information, I was happy to learn that the Senate has approved a bill that offers tax credits to businesses that hire unemployed veterans and also provides dollars for retraining older unemployed veterans.

Of the three leading causes for individual bankruptcy in Indiana - divorce, medical bills, and joblessness - the latter two hit veterans especially hard.  Often, veterans of the military suffer from medical conditions and even physical or mental disability, presenting an extra challenge when it comes to employment, along with extra medical costs.

In my Bankruptcy in Indiana articles, I’ve highlighted some of the special exceptions provided for service members in the new bankruptcy laws of Indiana, as well as special programs our own Lilly Endowment put in place four years ago to help returning Indiana veterans.

Handling medical costs, finding well-paying employment, finding good housing, and managing debt repayment are issues for all the clients of any lawyer for bankruptcy in Indiana.  But veterans deserve extra assistance making a fresh financial start after serving our country!

To all the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices, Alabama is a long ways from home in terms of practicing Indiana bankruptcy law.

On the other hand, a recent piece of news out of Alabama was of great interest to us, because when, only weeks ago,Alabama County filed for bankruptcy court protection, it marked what Yahoo! News called “the biggest municipal bankruptcy in U.S. history”.

Municipal bankruptcy is actually a topic I’ve been mentioning in these Bankruptcy in Indiana articles, despite the fact that, in all the years I’ve been a bankruptcy attorney in Indiana, the new bankruptcy laws of Indiana have made no provision for a city or a town or county to file bankruptcy.

My work, which involves individual bankruptcy in Indiana and small business bankruptcy in Indiana , is different in that, when a city or town files bankruptcy, it may or may not sell assets to pay debts. The point of the municipal bankruptcy is that it allows time for the municipality to continue to provide services to the extent possible while trying to sort out the debts they have and work with a bankruptcy judge to find ways to settle these debts. For example, Chicago bankruptcy attorney James Chatz said the filing allows all sides to have a moment of calm and then try to reach an agreement. In the meantime, Jefferson County can continue to run its operations and pay its bills.

One of my Columbus bankruptcy lawyer colleagues hit the nail on the head when she observed that it will be very interesting to watch as the Alabama County bankruptcy case unfolds.  As the Huffington Post states, “The biggest civic bankruptcy in American history could leave residents of Alabama's most populous county paying astronomical rates for public services performed by a skeleton crew of county workers. Or it could simply mean tightening the belt another few notches, depending how much of Jefferson County's $4.15 billion debt will have to be paid. It's even possible that, just as companies have benefited from bankruptcy, that the county surrounding Birmingham will emerge stronger for it.”

As a longtime debt consolidation lawyer offering Indiana bankruptcy help, largely through
bankruptcy Chapter 7 in Indiana and through Chapter 13 bankruptcy law in Indiana, I’m very interested in what happens in Alabama. If the bankruptcy process proves to be a successful remedy to the problems there, other municipalities may be encouraged to file as well, including, potentially, law changes allowing for municipal bankruptcy in Indiana.

Will what happens in Alabama stay in Alabama?  This Indianapolis lawyer for bankruptcy is interested to see….

Leaves are falling, temperatures are dropping, and, as all good bankruptcy attorneys in Indiana know, numbers are changing. As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, by now I’m used to these twice-yearly shifts.

There are actually a number of ways in which the new numbers (in effect for cases filed under Indiana bankruptcy law on or after November 1 of this year) affect the planning I do with clients.

First, let’s talk about the means test, which is a sort of measuring stick the courts use to determine who’s eligible to file under the new bankruptcy laws in Indiana, and for what type of bankruptcy each debtor qualifies. As one of my Columbus bankruptcy lawyer colleagues always points out, the numbers are not the same in every state.

In Indiana, a one-person household can have income up to $39,987, with anything above that amount meaning that person can be disqualified from seeking relief under bankruptcy Chapter 7 in Indiana. A two-person household, by comparison, is allowed to have up to $49,669 in income, while a four-person household may have up to $67,296 and still file a Chapter 7. For every extra person in the household above four, $7,500 is added to the allowable income number.

The counting continues beyond income dollars, however, and gets far more detailed, using different numbers depending on which Indiana county the debtors live in. Depending upon family size, there is a dollar figure for how much money may be kept each month by the debtor for the mortgage or rent payment, for non-mortgage expenses, and for car-related expenses.

The four Zuckerberg bankruptcy law offices are located in Indianapolis, Columbus, Bloomington, and Anderson, serving 60 different counties, so knowing the precise numbers becomes very important to us as we offer Indiana bankruptcy help.

So, for example, in Marion County the monthly allowance for mortgage or rent (for a one-person household) is $777, while in Shelby County it’s $743. The monthly non-mortgage allowance in Brown County is $417, as compared to $384 in Marion County. The financial standards are broken down into even finer categories for food, housekeeping supplies, apparel and services, personal care products and services, and miscellaneous. Health care expenses have allowances that are different for those under or over age 65.

Whether my clients need payday loan debt help, student loan debt help, help to stop foreclosure on their home, or are considering filing small business bankruptcy in Indiana – I need to be counting heads and dollars. And, whether my clients are filing bankruptcy Chapter 7 in Indiana or filing under Chapter 13 bankruptcy law – I need to be counting income and expenses. In the end, it all boils down to numbers and people!

The other day, I shared with Bankruptcy in Indiana readers that on Nov. 1 of this year, some new numbers went into effect.  The changes in fees for filing personal bankruptcy in Indiana will affect clients of the four Zuckerberg bankruptcy law offices, all of which are in the U.S. Bankruptcy Court Southern District of Indiana.

There are some other changes, though, that may have even greater an effect on Hoosiers. Those numbers have to do with the definition of “income” for the bankruptcy means test for both bankruptcy Chapter 7 in Indiana and for cases filed under chapter 13 bankruptcy law in Indiana.

The means test is used to determine whether you qualify for a Chapter 7, and, if not, whether your Chapter 13 debt repayment plan will include a three or a five year period.  The new numbers are based on data from the U.S. Bureau of Labor Statistics about the median income for each area of our country, and they make it at least a little more difficult to qualify.

One of the Columbus bankruptcy lawyers who is a Mark Zuckerberg colleague pointed out just one example: Prior to Nov. 1, a household of three needed to average $59,028 or less in income per year in order to qualify to file individual bankruptcy in Indiana using bankruptcy Chapter 7.  With the new numbers, if income is $57,696 or more, that debtor will need to look at filing under Chapter 13.  In other words, the requirements for filing bankruptcy in Indiana are getting more than a tad bit more challenging.

Of course, having served as a debt consolidation lawyer offering bankruptcy services in Indiana for twenty five years, I can reassure you that none of this new information is either surprising or daunting to me.  It’s all just part of keeping the bankruptcy system in tune with the real world of prices, and of treating all parties, both debtors and creditors, fairly.

It’s become routine: the numbers for Indiana bankruptcy change twice a year, in March and November, tracking government statistics. Practicing Indiana bankruptcy law, after all, is about two things: numbers and people.  And, whether we’re working on a mortgage modification to help stop foreclosure, offering payday loan debt help and student loan debt help, or taking clients through the process of filing small business bankruptcy in Indiana, we bankruptcy attorneys have to be good in both those areas (people and numbers).  In describing myself, I’d say "Mark Zuckerberg is a people person, but also a numbers guy!"

Bankruptcy judges have the power to “discharge” debts, but, as I’ve often cautioned readers of these Bankruptcy in Indiana articles, there are some debts that, under the new bankruptcy laws of Indiana, cannot be forgiven.

The most well-known examples of bankruptcy “cant’s” include:

•  Child support and alimony payments
•  Most student loans
•  Certain taxes
•  First mortgage arrears
•  Criminal or other legal penalties and fines

There’s one kind of debt related to filing personal bankruptcy in Indiana that isn’t so well-known, and it involves condo or homeowners’ association fees in bankruptcy Chapter 7 .  As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I’ve found that few clients realize that their monthly fee is one obligation that can’t be forgiven through filing Chapter 7 personal bankruptcy in Indiana.

The subject of delinquent homeowners’ fees is actually a subject that comes up quite often in the work we do in the Zuckerberg bankruptcy law offices to help stop foreclosure.

As Susan Jenkins points out in BroadNeck Patch, the homeowners’ association has the law on its side and can sue a homeowner (even one who’s vacated the property) for unpaid monthly fees. While this unpleasant legal fact is not commonly known by homeowners, all the good bankruptcy attorneys in Indiana who are my colleagues are very aware of the law and take condo and homeowner fees into account when filling out the list of expenses and debts as part of the process of filing bankruptcy.

In many locations, including the Indianapolis, Anderson, Columbus, and Bloomington, Indiana areas where I practice law, joining the homeowners’ association is mandatory when purchasing a home or condo.   In the event the fees are not paid, the association could sue, and then legal fees would add to the money owed on back payments.

As a certified consumer bankruptcy specialist, I understand that it all comes back to the importance of dealing with debt early on, rather than putting off facing financial problems.  Condo fees, it turns out, are one of the few but important “can’ts” in the bankruptcy “can”!

In the world of bankruptcy, jobs play a huge role, and, in the 25 years I’ve been a debt consolidation lawyer offering bankruptcy services in Indiana, I’ve seen jobs destroyed by the “ripple effect”.  Big companies get into financial difficulty and lay off workers.  Then workers haven’t the money to support small businesses, and those lay off more workers. That’s exactly what happened this month when restaurant chain Friendly’s ice Cream filed bankruptcy and laid off 1,260 workers with essentially no warning.

As a lawyer who’s helped hundreds of business owners file small business bankruptcy in Indiana, the story about Friendly’s is in itself not surprising to me. In fact, in these Bankruptcy in Indiana articles, I’ve shared the stories of quite a number of companies that simply couldn’t stay solvent in our struggling economy.  However, as one of my Columbus  small business bankruptcy lawyer colleagues pointed out, there are three aspects in the Friendly’s story worth explaining to my readers:

• The company filed Chapter 11 bankruptcy, and won the approval of the bankruptcy court to not only remain open (Friendly’s closed 63 of its stores, but 424 stores remain) while it pursues a sale, but won permission to borrow more money to help fund operations in the meanwhile.
  
• It’s interesting that one day earlier, another restaurant chain, Real Mex Restaurants, won the same type of approval to borrow money to fund operations while in bankruptcy.
  
• Federal law prohibits companies from laying off 50 or more workers at one time without prior warning.  However, the law applies only if those workers are all in one location.  (The idea is to avoid devastating small communities when many workers who live there are suddenly without jobs.)  Friendly’s workers were spread out in different locations across the country.

Unfortunately I, along with all the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices, function in the small towns scattered all through central and southern Indiana. And, as sure as my name is Mark Zuckerberg, it doesn’t take laying off fifty people to cause devastation in those small towns!

Can people who’ve lost their income be helped by filing bankruptcy in Indiana? Yes, but emerging from bankruptcy becomes the challenge, because to make a successful financial comeback, it takes income from jobs. That's true whether the money is needed for student loan debt help, or simply to pay everyday bills!

That’s true even when an individual files bankruptcy Chapter 7 in Indiana. It’s especially true when a debtor files for a 3-5 year debt repayment plan under Chapter 13 bankruptcy law in Indiana.  Income from jobs is the key.  I always urge readers and clients:  If your job situation is beginning to feel “iffy” because of an employer’s financial difficulties, don’t wait until the announcement of a layoff is made.  Discussing your situation with a legal professional and know your options. 

I can’t promise you won’t get caught in the “ripple”, but I can promise you this:  Things are easier when you’re prepared!

Back in May of this year, I was telling Bankruptcy in Indiana readers about yet another new program that had been created, that particular one in Marion County, to help stop foreclosures in our state. Actually, ever since the housing crisis began, I have been focusing my efforts as an Indiana bankruptcy attorney and debt consolidation lawyer on mortgage modification.

Exactly how can I, along with all the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices help stop foreclosure?

• We write letters and handle phone calls to negotiate mortgage modifications with lenders.
  
• We help individuals save their homes through filing personal bankruptcy in Indiana using Chapter 13 bankruptcy law.
  
• We provide bankruptcy information in Indiana, including ways to use bankruptcy to stop foreclosure.                                                                                                                     

• Gives the bankruptcy trustee power to take action when creditors are abusing the bankruptcy process.  (These powers are both investigative – conducting audits and investigations, and punitive – imposing sanctions for misconduct by creditors.)
  
• Mandates that mortgage servicers certify (under penalty of perjury) that they are complying with the special rules for deployed and active duty military homeowners.

After 25 years as a lawyer for bankruptcy in Indiana, someone who actually helped write part of the new bankruptcy laws of Indiana, I, Mark Zuckerberg, wholeheartedly agree with reporter Elizabeth Brennon in News Junky Journal:

Banks should not attempt to profit from these hard times with improper mortgage fees and other types of fraud!

News headlines that have anything to do with bankruptcy are always a topic of discussion among the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices. And when the story has to do with truth-telling, the discussions can get rather heated, because all of us know that full disclosure of facts is the one thing that keeps the bankruptcy system working and fair to all the parties concerned.

In the past couple of weeks there were two particular news items that “jumped out” at us both having to do with truth in bankruptcy.  Then, just the other day I read a summary of an outline of a lecture given to bankruptcy trustees at a lawyers’ association meeting in North Carolina.  The article said that what bankruptcy Chapter 7 trustees are looking for in bankruptcy schedules (the paperwork I help clients complete when filing personal bankruptcy in Indiana) could be summed up in two words:

1. Disclosure
2. Accuracy

Basically, what that lecturer was saying is that, in bankruptcy, it’s important to tell the truth about what you own and what you owe, what money you transferred to other people and what money they may have transferred to you.  In short, tell the truth and tell it all. That's true whether it's bankruptcy Chapter 7 in Indiana, Chapter 13 bankruptcy law in Indiana, or even small business bankruptcy in Indiana wer'e talking about.

If Bankruptcy in Indiana readers will keep those concepts in mind, it will be easy for you to understand why my Bloomington, Anderson, Indianapolis, and Columbus bankruptcy lawyer colleagues spent so much time talking about the following two pieces of news:


Story #1:    Solyndra CEO touted progress to lawmakers just before bankruptcy.
“Less than two months before his solar panel company filed for bankruptcy, Solyndra CEO Brian Harrison told lawmakers on Capitol Hill that…his company had shipped record-breaking numbers of solar panels to buyers and was posed to double its revenue in 2011,” reports CaliforniaWatch.org. 
 

As a longtime debt consolidation lawyer offering bankruptcy services in Indiana, I know something is very wrong here.  One thing I’ve learned from providing Indiana bankruptcy help to tens of thousands of people is that the entire bankruptcy system rests on information, truthful information. If the court finds out that a bankruptcy filer has not fully disclosed all the financial transactions in the months leading up to the bankruptcy, it can not only deny the bankruptcy petition, but penalize the debtor for fraud! That’s precisely why such a large part of my work consists of helping clients collect, and then properly report, their information.

Story #2:   Teresa Giudice’s Hubby Joe Withdraws Bankruptcy Filing.

“Real Housewives of New Jersey hubby Joe Guidice has withdrawn his bankruptcy filing.
The New York Post is cynical, believing he decided to withdraw because he took the Fifth when questioned about assets his creditors claim he’s been hiding. “Concealing assets during a bankruptcy proceeding is a felony, since the result would be defrauding the creditors,” the Post reporter correctly explains in “Going un-broke”.

I’ll second that. 
There’s no getting around it – for the new bankruptcy laws of Indiana to work, it takes truth! 

Sometimes, as I’m reading up on the news so that I can keep Bankruptcy in Indiana readers up-to-date on everything happening that might affect them, I come across an unusual item that helps me explain a not-so-unusual point.  Today I’ve got a news story about a rocket to pass along. This story answers the one question that’s on the mind of every person when they’re considering filing personal bankruptcy in Indiana:  What will life be like after bankruptcy?

Near the equator is an ocean platform.  A company named Sea Launch, less than two weeks ago, launched a 20-story rocket off that platform, carrying a 10,000 pound tele-communications satellite into orbit.

Why do I, as a debt consolidation lawyer offering bankruptcy services in Indiana (well north of the equator), take an interest in this rocket launch? It’s because this big Sea Launch triumph was achieved by a company that only recently emerged from Chapter 11 bankruptcy!

“There are new owners and renewed hopes here at Sea Launch,” said the company’s VP of sales and marketing, emphasizing that “this being the first launch since restructuring, is very important”

Every small business owner can take inspiration from this story, because after 25 years helping thousands file small business bankruptcy in Indiana, I know owners have a hard time envisioning what their business life might look like after the fact. For that very reason, all of the good bankruptcy attorneys in Indiana who work in the Zuckerberg bankruptcy law offices are fond of collecting stories about the many, many corporations that successfully emerged from bankruptcy.

The bankruptcy laws of Indiana are also meant to help individuals rebuild their financial lives after bankruptcy. In working with personal bankruptcy in Indiana, it sometimes helps for clients to know stories of celebrity sports figures who successful emerged from bankruptcy. While one aspect of my work is using bankruptcy to help stop foreclosure, often clients want to know how soon after filing under chapter 13 bankruptcy law in Indiana they would be able to qualify for a home loan if they needed to move for job-related reasons. As my Columbus bankruptcy lawyer colleagues would be quick to respond, beginning two years after your bankruptcy, you most likely would qualify for a home loan on the same terms as other borrowers.

The point of my story today – bankruptcy offers the chance for a brand new relationship with money – almost like a “launch”!

When does “stay” mean “stop”?

As any bankruptcy lawyer in Indiana can explain, the filing of a bankruptcy automatically prohibits a creditor from starting or continuing any collection efforts.  In fact, it doesn’t matter whether you’re talking about personal bankruptcy in Indiana or small business bankruptcy in Indiana. The automatic stay has the effect of putting an immediate halt to all legal actions against a debtor.

Actor Bill Cosby and the others who serve on the board of the National Slavery Museum in Richmond, Virginia were reminded of this rule just last month, I imagine.  One of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices noticed the story about the U.S. National Slavery Museum filing Chapter 11 bankruptcy in Richmond. I thought the story would be interesting to my Bankruptcy in Indiana readers for two reasons:

1. Bill Cosby is scheduled to appear at the Carmel Center for the Performing Arts soon.
2. The story illustrates the way the bankruptcy automatic stay works.

Although for the past 25 years I have been a debt consolidation lawyer practicing bankruptcy law in Indiana and in Indiana only, I think this story about the Virginia museum illustrates several important points about bankruptcy in general:

• The museum’s filing for bankruptcy is designed to stop the city of Fredericksburg from selling the land by activating the automatic stay.
• As someone with a long history of providing bankruptcy services in Indiana, I also understand the significance of the filing when it comes to a second legal battle.  According to gadling.com, Therbia and Marva Parker had donated 100 historic artifacts to the museum so that those artifacts could be on display.  Now the Parkers want their things back.  Here, too, the automatic stay buys time for the museum board to decide how to handle the Parkers’ demand.

One of the main purposes for this series of articles I’ve been providing for four years is to give accurate, up to date Indiana bankruptcy information.  It’s interesting how over the years, bankruptcy law has evolved, yet how there are certain basic principles that underlie the system, and those don’t change.  One of those is that bankruptcy (in Indiana or anywhere else, for that matter) is meant to provide relief from pressure. The automatic stay was created to turn off the phone calls, the dunning letters, the repossession attempts, the foreclosure actions, the lawsuits, and the seizures. The automatic stay says “stop!” to creditors, buying time for debtors (whether those are individuals, business owners, or museum boards) to think and plan the best way to handle their financial issues or to help stop foreclosure with the help and monitoring of the bankruptcy court.  

As a longtime debt consolidation lawyer, I can tell you that the advice offered to debtors by ChristiaNet.com  is spot on: “When it comes to negotiating with creditors, debtors should bear one thing in mind: you can catch more flies with honey than vinegar!”

Creditors are more likely to work with debtors who are cooperative and demonstrate an acceptable level of respect, ChristiaNet.com  adds. In my work offering bankruptcy services in Indiana, in addition to helping clients keep their own anger in check, I’ve found that creditors are often willing to respond to letters from an Indiana bankruptcy lawyer than from a debtor.

Creditors, especially small business owners whose customers have failed to pay for goods and services may have their own anger issues, as I and all the good bankruptcy attorneys who work in the Zuckerberg bankruptcy law offices have found.

Dave Ramsey of the well-known radio advice show thinks properly-directed anger could be a good thing, because “You have to get mad at debt to get out of debt.” No one could disagree with the principles of deferring unneeded spending to reduce debt that Ramsey preaches.  Still, what we Indianapolis bankruptcy lawyers often encounter are situations where very financially responsible people have been hit hard with many bad things happening to them over time, including job loss and illness, to the point where they just cannot financially withstand the pressures by themselves.

The least productive response for debtors, I want to emphasize to clients and to Bankruptcy in Indiana readers, is getting mad and trying to “get even”.  “Getting even” with Uncle Sam by ignoring tax notices – big mistake!  Ignoring late payment letters from creditors – disaster! Even when (perhaps especially when) you feel debt collectors have violated your rights, it’s crucial for you to remain calm and to seek professional advice at the very first signs of financial downslide 

The Fair Debt Collection Practices Act requires that debt collectors treat you fairly and respectfully as well, and there are certain practices debt collectors must avoid under the law. Even though a consumer may file a lawsuit against a debt collector for violating this Act, getting angry is not a help.  For one thing, “Consumer Fraud Reporting” explains, if you get angry, you’ll forget (or forget to ask) important information.

Small business bankruptcy in Indiana and personal bankruptcy in Indiana are both designed to help you get even, not with your creditors, but with your finances!

After almost 25 years as a debt consolidation lawyer offering bankruptcy services in Indiana, I know that not always, but still sometimes, negotiation works. 

Apparently they think so in Alabama as well, because I just read in BusinessWeek that “If legislators accept the arrangement…it would end the biggest debt crisis in the municipal bond market”, which is the way Jefferson County, Alabama’s commissioner referred to a deal Jefferson County is making with its creditors.

In earlier Bankruptcy in Indiana articles I explained thatJefferson County (where Birmingham is) has been on the verge of bankruptcy for the past three years, with the problem being a debt the county owes on a major sewer project. By way of background, I explained that Chapter 9 bankruptcy for municipalities was enacted into law in 1991, adding that in the state of Indiana, where the four Zuckerberg bankruptcy law offices are located, there is no provision for a city or town or county to file bankruptcy.

While I’ve been following the Jefferson County story for years, I’m very interested in the fact that some of its major creditors, in particular JPMorgan Chase, have expressed a willingness to suffer big losses by forgiving some of Jefferson County’s debt.  I was discussing this with one of the Columbus bankruptcy lawyers who works in my office there; her “take” on the matter agrees with mine: the banks expect to receive more money through a settlement than they might using the bankruptcy process.

Even though I have never been involved in a municipal bankruptcy case, negotiating with creditors is very much a part of my work and the work of the good bankruptcy attorneys in Indiana who work with me.  Divorce and bankruptcy often involve negotiations, not only with creditors, but between the couple themselves. Careful bankruptcy planning, including prior negotiating with medical creditors and credit card companies, can make the divorce process simpler and less painful. Very often, offering bankruptcy help in Indiana includes working in cooperation with divorce attorneys in order to achieve the best result for all the family members. 

In some cases, Chapter 13 bankruptcy laws of Indiana can be used to help stop foreclosure.  But, even before our clients reach that stage, we analyze the whole financial situation and explore all the options for mortgage modification, including negotiating with lenders on their behalf.