President Obama's promise was that 2010 will be about jobs.  I guess, in my work as a debt consolidation lawyer and bankruptcy attorney in Indiana, it always has been about jobs.  A very important part of my providing bankruptcy information in Indiana has to do with reporting about where the jobs are and where they aren't. 

Until they have a source of adequate income, under Chapter 13 bankruptcy law in Indiana, my clients can't keep up with a debt repayment plan.  And, until there's a source of adequate income, clients do not have the means to rebuild their financial lives after emerging from Chapter 7 bankruptcy in Indiana.  That explains why, every week of two, in my Indiana bankruptcy blog, I offer employment news from around our state, information I've culled from sources such as Inside Indiana Business.

Back in November 2009, when Indiana University economists were presenting their annual forecast, the consensus was "Things will be getting better, but they still won't be really good." (Gee, thanks, guys!)  Then, just last week, local economist Morton Marcus wrote in the Indianapolis Business Journal  that "the recovery has taken root", noting that "Bloomington, Columbus, Indianapolis, and Lafayette were the only metro areas with more jobs in 2009 than they had ten years earlier." (No doubt the Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices in those places are rejoicing at this news along with me!)

This week, from my Indiana lawyer for bankruptcy perspective, there were two "biggie" news items about employment in our state. The BIg Bad news for this week comes out of Columbus (despite Morton Marcus' positive comment about that city), with the announcement by Cummins Engine that it's laying off 200 workers. The contrasting Big Good news comes from Dow Agrosciences.  Dow plans to add 550 new jobs over the next five years.  

Other positive employment news comes from:

• Monogram Comfort Foods is expanding in Muncie and plans to quadruple its workforce.
• Rexam, a packaging manufacturer in Franklin, will be creating 46 new jobs by the end of the year.
• Sony is moving its DVD production to Terre Haute from New Jersey

Got a specific employment question?  Give us a call. We love being able to provide positive news items about expansion and revival, exactly the sort of rebuilding and hope the Indiana bankruptcy services I and my colleagues mean to provide!

As someone who's been providing bankruptcy services in Indiana for close to twenty-five years, I know better than most that Indiana bankruptcy help can take any one of a number of different forms.  That's true not only when it comes to filing personal bankruptcy in Indiana, but also impacts small business bankruptcy clients here.

When I'm dealing with small business bankruptcy in Indiana, the typical business is advised to file bankruptcy Chapter 7 in Indiana, or to file under Chapter 13 bankruptcy law in Indiana.  A third valuable tool, though, is Chapter 11.  One of the Columbus bankruptcy lawyers who works in the Mark Zuckerberg offices there likes to explain that Chapter 11 is meant for businesses whose financial problems are expected to be temporary.

Today I want to share with my Indiana bankruptcy blog readers and clients some recent news from Evansville, Indiana, where Regent Communications, the owner of five Evansville and two Owensboro, Kentucky radio stations, has filed Chapter 11.  The news story calls this bankruptcy a "consensual financial restructuring".   So who's doing the consenting here?  Well, it's a case of lenders and debtors working together to save the company.

Details include:
 

• Regent bondholders will convert their bonds into stock in the company.
• Stockholders will receive cash for each share they own.
• The company will file Chapter 11 bankruptcy and execute their plan under the supervision of the court.
• There will be no change in senior leadership.
• The company will continue to pay vendors and employees.

As a debt consolidation lawyer and Indianapolis bankruptcy lawyer, I think this consensual Chapter 11 is a great example of one thing bankruptcy in Indiana is meant to accomplish - buying time for businesses to work through their plan.  When I read that "the move is not expected to impact day-to-day operations at Regent-owned stations," I was reminded of that wonderful line from the Hokey Pokey - "That's what it's all about!"

I try to make holidays special for my children, and if I can squeeze in a little bit of a history lesson around each American holiday, I give that a try. When it comes to Tax Freedom Day, though, I'm not sure they "get it", at least not yet.  But, for me as a bankruptcy attorney in Indiana, I do get the concept of
Tax Freedom Day, which marks the point at which the average American stops working to pay federal, state, and local taxes and starts working to pay all the other bills for self and family.

As a debt consolidation lawyer offering all sorts of bankruptcy information in Indiana, I know Tax Freedom Day has been getting later and later.  Who's measuring that? An organization called the Tax Foundation, which also calculates Deficit Day, the day when the federal government runs out of tax revenue and begins to use borrowed money. (That one's getting earlier and earlier, needless to say!).

My interest in all this, of course, is in providing Indiana bankruptcy help, along with the Indianapolis, Bloomington, Anderson, and Columbus bankruptcy lawyers who work in the various Zuckerberg bankruptcy law offices around the state.  The Tax Foundation reported that Indiana's Tax Freedom Day last year was April 8, with Hoosiers working, as a group, the first 98 days of the year to get all the taxes paid.

Since I often find myself explaining what bankruptcy can and can't do when it comes to tax debt, let me share with you what kinds of taxes Indiana residents actually pay, from biggest to smallest:

Individual income taxes                                               38 days' work
Payroll taxes                                                                27 days' work
Sales and excise taxes                                                15 days' work
Corporate income taxes                                                6 days' work
Property taxes                                                             12 days' work
Miscellaneous (motor vehicle licenses,
severance, estate taxes)                                               4 days' work

All statistics aside, I've devoted my career to offering Indiana bankruptcy help, student loan debt help, payday loan debt help, and help stopping foreclosure, I'm really interested in a different kind of Freedom Day.  I'm looking forward to wishing each of my Indiana clients and bankruptcy blog readers "Happy DEBT Freedom Day!

Everyone's hoping that 2010 will be better than 2009 (anything would be better!), and Creditcards.com agrees.  In keeping track of bankruptcies per capita for each state for 2009, the website puts Indiana at a per capita rate of 5 - 5.9 bankruptcies filed for each 1,000 residents.

While we're far behind Nevada, with 11 bankruptcies per 1,000 residents, that's no comfort for any Hoosier, least of all for me. As a bankruptcy attorney in Indiana for close to 25 years, I know that 5 in 1000 translates into far too many bankruptcy filings.

A fellow attorney commented that, "earlier in the decade, if you had an economic problem, you could mortgage your way out of it."  I have to agree - that kind of "solution" doesn't seem to be available today, what with the collapse in home prices and the decrease in the number of available jobs (which serve as the basis for qualifying for home equity loans).  We're all seeing this change, the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices in each of these Indiana locations - you just can't mortgage your way out this time!

As a debt consolidation lawyer for so many years, I'm used to seeing home equity lines of credit being used to reduce credit card debt.  Instead, nowadays, I'm working to help stop foreclosure by negotiating mortgage modifications for my Indiana bankruptcy clients.
Creditcard.com reports on other changes on the national bankruptcy landscape as well, showing that the percentage of consumers filing bankruptcy Chapter 7 is increasing, while the number qualifying under Chapter 13 bankruptcy laws is dropping.

In order to offer the most up-to-date Indiana bankruptcy help, I try to read everything I can about real estate, financial planning, taxes, and employee benefits.  When it comes to real estate, forecasts are far from rosy. More foreclosed properties are predicted to hit the market this year.

So, while bankruptcy will continue to offer relief from harassment by creditor and to buy time for individuals and small businesses to plan how to handle financial problems, one thing is all too plain: We won't be able to mortgage our way out of this one!

The fact that, in the past two years, there's been a substantial increase in the number of people visiting the Mark Zuckerberg bankruptcy law offices in Anderson asking for Indiana bankruptcy help is no surprise, given the state of the economy in general and the state of the auto manufacturing in particular. 

But, as a debt consolidation lawyer offering bankruptcy information in Indiana, what has surprised me is the increase in the number of women who, in the last two years, have filed personal bankruptcy in Indiana.   In fact, in each of the Zuckerberg bankruptcy law offices, we've begun to offer a no-obligation, woman-to-woman talk as the start of the process.

Here's what my thoughts are about this female filing of bankruptcy in Indiana, and particularly in Anderson area:
 

• Many of the women are custodial parents, and some are working moms.  But, in many cases, the health insurance coverage was coming from the ex-husband's job.  With all the downsizing and layoffs in the Anderson automotive plants, many non-custodial dads lost jobs.  Some, even those with help from COBRA and unemployment benefits, have trouble keeping up with health insurance premiums for themselves and  their children. The moms then incurred credit card debt trying to keep medical bills paid.
• Divorced and single moms have a lot of difficulty finding affordable child care.  When the women herself is laid off, it's extremely difficult for her to keep up with a job search and still pay for child care.

I've had more than one women show me an article in MSN Money with advice they've tried to follow prior to coming to see me. called "15 Steps If Bankruptcy Is Inevitable".  I think there are some very good suggestions made in that article, some of which are ideas I stress with all my clients prior to filing personal bankruptcy in Indiana.

• Leave your retirement accounts alone.  401ks and IRAs are protected from creditors in bankruptcy, so you don't want to spend those down prior to filing bankruptcy.
• Make a list of what you owe. Not only will you need a complete list of debts for the paperwork that needs to be submitted to the bankruptcy court, just making the list will help you work with effectively with your Indiana lawyer for bankruptcy to prepare for the process.
• Start getting your paperwork together. Collect bank statements, account statements, and bills for the most recent few months, any lease contracts, and any legal documents or papers that have been sent to you. The more organized you are, the smoother a process bankruptcy can be. 

Today's bankruptcy blog reader's question is about IRS collectors.  It's a big challenge, stopping IRS collectors. Fortunately, my colleagues (the Indiana bankruptcy attorneys who work in the Mark Zuckerberg bankruptcy law offices) and I know that the new bankruptcy laws in Indiana offer remedies even when it comes to tax debt.

First, let me review the 5 conditions (for federal tax debt to be eligible for discharge under bankruptcy, these things need to be true):

• Due date of the tax return must be at least 3 years earlier than the bankruptcy filing.
• There must have actually been a tax return filed at least 2 years earlier than the bankruptcy
• The tax assessment that the collectors are after must be at least 240 days old.
• The tax return isn't fraudulent.
• The taxpayer isn't guilty of intentional tax evasion.

Whether or not your tax bills meet all the conditions for total forgiveness or discharge by the bankruptcy court, there's still a good chance that filing bankruptcy can be of some help.

When there is tax debt In a Chapter 7 bankruptcy, debts not discharged are assigned priorities for repayment.  Since secured creditors are at the top of thepriority list, the tax debt, which is unsecured, will be near the bottom of the list.  You might remain liable for payment at the conclusion of the bankruptcy, but you'll have time to work out a plan of attack.

In a Chapter 13 bankruptcy, the bankruptcy judge has the power to "cram down" or discount some debts, or at least create an installment plan for paying the tax debt over a five-year period while stopping penalties and interest from building up.

Remember that the automatic stay of bankruptcy puts an immediate halt to collection efforts by creditors, and that includes tax collectors!

 

Next to questions about how to help stop foreclosure and (especially in this season of the year) tax refunds, I would say that as a debt consolidation lawyer offering bankruptcy services in Indiana, the topic I get asked about most  is cars.

When someone is dropped off at the Mark Zuckerberg bankruptcy law office because they don't have a car (the Anderson, Bloomington, and Columbus bankruptcy lawyers who work in my offices there say exactly the same thing), that person is typically in an immediate and very real bind.  If the car's been repossessed, I may have some hopeful news to share.  According to Chapter 13 bankruptcy law in Indiana, if you file before their automobile has been sold, the creditor has to give the car back immediately.

Generally speaking, the new bankruptcy laws in Indiana are designed not to punish, but to rehabilitate. In other words, the whole idea behind the bankruptcy system is to offer honest debtors a chance at a fresh financial start. The court recognizes that the lack of a driver's license can interfere with a person's chances for that fresh start.

Much of the time when clients talk to me about problems relating to their driver's license having been yanked, it's because they have unpaid tickets, unpaid fines, or unpaid automobile damages.  These debts might not even have to do with bad driving or accidents, but might be due to parking violations or equipment violations (noisy mufflers, bald tires, or broken headlights and such). Sometimes they don't have the money to pay because they're out of a job and, needless to say, can't go on a job search without a car!  Again, in this situation, I might have hopeful news.  Assuming there are not criminal charges against the debtor, Chapter 13 bankruptcy  law might offer a chance to get the driver's license back the next day.

Now, if the problem started with an accident resulting in damages over $1000, or you commit a moving violation, the situation is more serious.  You have forty days to submit proof of financial responsibility (insurance) to the state police. (If you can't do that, you're liable for paying the damages outright or for working out an installment plan to pay).  As part of the Indiana bankruptcy help I provide, we would send proof of your bankruptcy filing to the motor vehicle licensing department.

I've been offering Indiana bankruptcy help for almost twenty five years.  I know how big a problem it is not to have wheels.  I know the bus doesn't go anywhere near your job, and how difficult it is to make job interviews when you don't have transportation.  I know that, without a car, you've no way to get family members to the doctor or pharmacy. That's why, if you've been dropped off at one of the Mark Zuckerberg bankruptcy law offices, you've come to the right place.  You've got problems having to do with your car and your license to drive it, and you're seeking experienced legal help.

It's no secret - scams make my blood boil.  Here I am, working for close to twenty-five years to help people facing severe financial challenges.  Along with the Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices there, I work to help stop foreclosures on my Indiana bankruptcy clients' homes.  Then we run up against foreclosure consultant scammers preying on vulnerable homeowners - it's enough to make anyone outraged!

Then, as an Indianapolis bankruptcy attorney, I encourage debtors to rebuild their credit step by step after emerging from bankruptcy.  Then I learn of identity theft schemes of every kind that can so easily sabotage all the debtors' best efforts.  Talk about blood boiling!

The most recent scam warnings issued by the Federal Trade Commission have to do with the cruelest kind of all - online job scams. These just really get to me.  Job losses, mind you, have always been one of the three leading causes of bankruptcy, along with divorce and medical bills. But, during the past two years, with the job situation being so very difficult, it's extraordinarily cruel to target the unemployed.  The scams typically begin with job placement ads or work-at-home schemes. 


The FTC warns the public not to fall for online offers such as:

• Job listings in return for a fee
• A business "opportunity" in return for an up-front investment
• Ads seeking to hire people to use their own PayPal accounts to facilitate transactions with foreigners (It typically turns out there are no real foreign customers, and the US middlemen victims are hit with penalties and fees from PayPal and the credit cards).

As Pam Dixon, executive director of the World Privacy Forum explains, "help wanted" scams work "because unemployed people are vulnerable." I'm hoping that my Indiana bankruptcy clients and bankruptcy blog readers get the message loud and clear.  In today's economy, a lot of people need the help of a debt consolidation lawyer and Indianapolis bankruptcy attorney.  What they don't need is online job scammers!

 

As part of providing bankruptcy services in Indiana, I can never forget one thing.  Whether a bankruptcy is a Chapter 7, or whether we're talking about  Chapter 13 bankruptcy law in Indiana, a job is going to be part of the script.  Without well-paid jobs, debtors emerging from bankruptcy can't rebuild their finances or keep current on their debt repayment plans.

Just yesterday I shared news about three Indiana companies that are expanding their work force.  Today I have more pieces of good news about where the jobs are:
 

• RV LLC is locating a new manufacturing center in Marion, which will bring up to 300 jobs into the area.
• Caterpillar is recalling 100 workers that had been laid off in Lafayette.
• Centennial Graphics Group (a book publishing and binding company) is creating 48 new jobs in New Albany. (I'm especially glad about this, because the New Albany area is served by the Zuckerberg bankruptcy law offices in Bloomington, and by the Columbus bankruptcy lawyers who work in the Mark Zuckerberg law offices there.)                               

• The Whirlpool ice making plant in Evansville is being moved to Iowa, and the majority of Whirlpool jobs in Evansville are being shipped to Mexico.
• Meanwhile, there's some bad news about another corporation, one I've mentioned in earlier blog posts.  Accuride, also in Evansville entered Chapter 11 bankruptcy five months ago, and now they are emerging because the court approved their reorganization plan.  The bad news for Indiana, though, is that the Guinite subsidiary of Accuride in Elkhart, is closing, meaning 225 jobs will be lost.

Mind you, these are more than mere statistics to me.  As a debt consolidation lawyer and long-time bankruptcy attorney in Indiana, I'm "boots on the ground" helping those who've lost jobs get help.  Sometimes it's payday loan debt help or student loan debt help.  Sometimes my colleagues and I help stop foreclosure,  It all comes down to what I send yesterday: The times aren't going to be better until the job markets are!

All the politicians, all the radio talk show hosts, all the newspaper reporters, magazine writers, bloggers and television news anchors – they’re all talking about jobs and so am I, along with the Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices there. There is commentary about the jobless claims rate, the unemployment statistics, the job stimulus programs, the expansions, the closings, the hiring, and the layoffs. 

Everyone “gets the picture” by now, and everyone knows that times aren’t really going to be good again until the jobs are.  Thankfully, at least according to an RTT News report, there are some glimmers of hope on the horizon - first time jobless claims have begun to “fall more than expected.”

As a debt consolidation lawyer and bankruptcy attorney in Indiana, I know the term “jobless claims” refers to the number of people filing for unemployment benefits for the first time. Wall Street commentators had expected January claims to drop by 15,000 nationally; instead, there were 43,000 fewer claims, with the month’s total being 440,000 nationwide. This is the lowest level we’ve seen in a year and a half, so that’s good, although we have a long way to go. Knowing only too well that, even with the Indiana bankruptcy help I provide, without a supply of good jobs, my clients cannot keep up with their debt repayment plans according to Chapter 13 bankruptcy law in Indiana, I do my best to stay on top of every bit of news having to do with jobs in our state.

• RV maker Jayco is expanding in Middlesbury, creating 75 new jobs.
• WNDU-TV in South Bend expects to hire 50 new workers.
• Living Essentials in Wabash is expanding its energy drink company, creating up to 36 new jobs.

I wish all the news were positive, but I did hear a big negative item out of Ft. Wayne: The Fort Wayne Foundry Corporation is closing its plant in Columbia City, leaving 114 people out of work.  Still, the net numbers are turning in a positive direction.  According to WSCI Radio in Columbus, "Indiana is bucking the national trend with three straight months of declining unemployment.”

Meanwhile, I and my colleagues keep on working, offering payday loan debt help, negotiating with lenders to help stop foreclosure,  offering relief to the thousands and thousands of people drowning in financial problems that began with job loss.

As a debt consolidation lawyer and Indianapolis  bankruptcy attorney, I've always found foreclosure to be closely linked with bankruptcy.  Of course, legally speaking, these two issues are governed by two totally different sets of laws, but what I mean is this: when clients turn to me for help with financial problems, the threat of foreclosure on their home is invariably one topic they want to discuss along with exploring bankruptcy in Indiana.

If you've been reading my bankruptcy blog for the past few years, you know that my colleagues, the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers in the Mark Zuckerberg law offices and I all help stop foreclosure by negotiating mortgage modifications.  I've been following closely all the different federal stimulus programs that help homeowners remain in their homes.

The latest program I read about actually isn't coming from the federal government, but from a private financial institution.  Citigroup announced two weeks ago a pilot program called Foreclosure Alternatives.  This program will not originally be available here in Indiana, only in Texas, Florida, Illinois, Michigan, New Jersey, and Ohio, where a combined 1,000 homeowners are expected to participate.  Then, depending upon the results, the program may be expanded to other states, including ours.

As part of providing bankruptcy information in Indiana, I often use the expression "buying time" when discussing bankruptcy, meaning time to organize a plan for handling debt.  The Citi plan offers time to homeowners threatened by foreclosure.  In a foreclosure, the lender takes control of the property and evicts the homeowner, usually within a few days. This foreclosure alternative plan is a form of deed in lieu of foreclosure, because Citigroup, the lender, takes control of the deed.  If no settlement is arrived at, homeownesr might still need to leave their homes, but:
 

• The program "buys" six months of additional planning time
• There is a less severe "hit" to the homeowner's credit report than a foreclosure might cause
• Citi is offering $1000 is relocation costs plus relocation counseling

Foreclosure alternatives are one form of "buying time", and buying time can mean getting help!

There’s a “not-to-do” list to follow before filing bankruptcy.  As I explained in Monday’s Indiana bankruptcy blog post, you don’t want the bankruptcy trustee using “lookback” on you and discovering you’ve hidden or transferred assets in the two years leading up to filing bankruptcy. As a bankruptcy lawyer in Indiana, I can tell you that the other thing not to do if you don’t want to be the victim of a “lookback” is to take cash advances totaling $750 or more from any one credit card in the 70 days leading up to your bankruptcy filing.

With close to twenty five years as a debt consolidation lawyer providing bankruptcy services in Indiana, I can add a very important item to the not-to-list list: Don’t expend emotional energy blaming anybody or anything for your financial troubles or, worse yet, blaming yourself.  If you’re like just about every other client (and I’ve helped tens of thousands of people file personal bankruptcy in Indiana), you’re a responsible adult coping with setbacks beyond your control, just trying your best to stay afloat and take care of your own basic needs and those of your family.

On the other hand, as an Indiana lawyer for bankruptcy,  I need to help clients work on their TO-do lists in preparation for filing personal bankruptcy in Indiana. Since it can be very important not only to do the right things, but to do those things in the right order, I always advise seeking legal help at the very first signs of a financial downslide.

Having helped to draft the new bankrukptcy laws in Indiana, the itemsI would include on my recommended pre-bankruptcy to-do list fall into four general categories:

Which bills to pay first, and in which order:

A big part of my work is helping debtors prioritize their bills. Those decisions are based on two considerations:

• The immediate-consequence category of bills, the ones where, if you don’t pay, you get hurt now because something gets turned off or taken away.  This would include utility bills, rent or mortgage.  Other immediate-consequences bills are federal tax bills, student loan, and child support.  The consequences of not paying those could be having assets seized or having wages garnished.

• Some kinds of debt are not dischargeable in bankruptcy, so those are bills you want to pay first.  Secured loans (mortgages and car loans), taxes, and child support and alimony payments would fall in this category.  If there’s a good chance a debt might be discharged in bankruptcy, you probably don’t want to use your remaining dollars to make payments on that debt now. If you need student loan debt help, I can discuss that with you, but those bills will most likely need to be paid even after you file bankruptcy.

Filing bankruptcy puts an immediate halt to all the pressures of collection efforts through the automatic stay, buying valuable time for debtors to gear up and organize their paperwork according to the new bankruptcy laws in Indiana.

So, whether it Chapter 13 banrkuptcy law in Indiana that you're considering, or filing Chapter 7 individual bankruptcy, be sure you’re making both pre-bankruptcy lists and “checking them twice”: the to-do list and the not-to-do list for filing bankruptcy in Indiana.

February is not only the snowiest month this Indianapolis bankruptcy attorney has seen in Indiana in a while, it marks the one-year anniversary of the Obama Mortgage Modification plan. 

As a debt consolidation lawyer and an Indiana lawyer for bankruptcy, I've always been involved in helping people with home mortgage-related problems.  And, even though it's true that foreclosures and bankruptcy are governed by different sets of laws, in my "real world" of practicing bankruptcy law (over my twenty-plus year career offering bankruptcy services in Indiana I've dealt with tens of thousands of individuals),  it seems that people who have concerns with debt are also concerned about keeping their homes.

Under the Home Affordable Modification Program (HAMP), it was decided, up to $75 billion could be spent.  The money was to go towards offering incentives to banks and lenders to renegotiate mortgages for three to four million homeowners, so that foreclosure could be avoided.  As of the end of 2009, according to Neil Barofsky, Special Inspector General for the TARP program, only a little more than $15 million has been disbursed. Only a little more than 66,000 homeowners nationwide have received permanent mortgage modifications, although there were more than 900,000 "trial modifications" in place.  RealEstateRama reports that 100,000 of these have been approved on the lenders' side for becoming permanent, awaiting approval by the borrowers.

When I say this month marks an anniversary, I really mean it.  For almost the entire year, I, along with the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who work in my bankruptcy law offices in each of those places, have been trying especially hard to help our clients negotiate with their lenders on mortgage modifications. 

In the meanwhile, all of us have been following the legislative debate about whether bankruptcy judges should be given the right to modify mortgages, a measure which, despite lengthy debate in both houses of Congress, failed to pass into law. Despite the frustration, I mentioned in one of my Indiana bankruptcy blog posts, Mortgage Modification Frustration Has Sunny Side, that, even when the lender has not granted a modification to a client, the very process of working with a legal professional to organize their financial information has often helped these clients gain greater control over their finances and positioned them to make wise decisions about both their mortgages and their debt problems in general.

As someone who's offered bankruptcy services in Indiana for almost twenty-five years, I tell myself I've seen it all.  But, for those who haven't, I feel compelled periodically to use my Indiana bankruptcy blog to prevent them from becoming fraud victims.

The Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices there agree - we've all found this to be an unfortunate truth: Scamsters tend to "hang around" wherever bankruptcy "lives". The first reason for that is that often, in a frantic attempt to stave off bankruptcy, debtors will look for any straw to grasp, and end up looking for help in all the wrong places, to paraphrase the old song about looking for love. That has been especially true during this economic downturn, with so many having lost jobs and medical insurance coverage.

Pre-bankruptcy predators include some payday lenders and some debt settlement agencies, according to the Center for Responsible Lending. There are "credit repair" scams, "debt consolidation" scams, mortgage modification scams, and foreclosure prevention scams to watch out for in addition to outright identity theft through stolen credit cards and IDs. People who are in financial trouble but who have not sought the advice of a bankruptcy attorney in Indiana tend to be the ones most vulnerable to believing there just might be a "quick fix" to their problems.

Financial planner Ken Clark, author of Getting Out of Debt, warns debtors against "Nigerian 419" scams (email request to help get money from Nigeria into the U.S., by accepting money into your own bank account in exchange for a handsome share of the money) and "Chain Letter" scams (email scam asking you to forward money to the sender and then invite 8-12 of your friends to do the same. The idea is for you to keep part of the money and forward on the rest, a modern version of an old type of pyramid scheme).

Some very innocent-appearing scam comes in the form of offers for a "free" credit report.  In order to get the report, you have to enter your credit card account number, which opens the door to identity theft.  Even in cases where an actually credit report is sent, sometimes charges begin appearing on your credit card account because somewhere in the "fine print" you agreed to that.  As a debt consolidation lawyer in Indiana, I'm constantly reminding my clients and bankruptcy blog readers - the only truly free reports come from the credit bureaus themselves.

The scamsters love to hang around even after bankruptcy has been processed! Post-bankruptcy predators offer low-balance credit cards to debtors emerging from bankruptcy, sometimes with activation and membership fees that push borrowers over their credit limits before they've really had a chance to use the card! Other scams masquerade as "credit rebuilding services". 

I've spent my entire career  as a offering Indiana bankruptcy help, even helping to craft the new bankruptcy laws in Indiana.  It really bothers me when so many debtors fall prey to scams when legitimate help is available through the bankruptcy safety net.  I'm doing all I can to spread awareness about scams and scamsters, hoping every debtor gets the message in time.

 

Just about everyone who comes to see me to discuss filing individual bankruptcy in Indiana has had experience with debt collectors.  In most of those encounters, I’ve found, the debtors didn’t know what their rights were under federal law until it was too late.

Since the purpose of my blog is to provide helpful bankruptcy information in Indiana, I decided to devote today’s blog post to bill collectors and how to best deal with them. As I’ve explained in many prior blog posts, bankruptcy itself provides instant relief from harassment by bill collectors. But even during the days, months (and sometimes years) that go by until people make the big decision to actually file bankruptcy, knowing how to react to the collection process can make matters a lot less unpleasant.

We talked it over, the Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices and I, and we agreed: more debtors need to know about the Fair Debt Collection Practices Act. The FCDCP is a federal statute specifically designed to stop unfair and abusive practices by collection agencies. (If debtors don’t recognize practices that aren’t legal, they won’t report the collectors to the proper authorities, meaning the Federal Trade Commission or the Indiana Attorney General.

The first thing you need to know is that a debt collector is anyone other than the creditor who collects debts for that creditor. So we’re not talking about the actual employees of a credit card company, auto company or other business collecting debts on behalf of their employer. Basically, debt collectors are outside contractors hired to do a job for creditors.

Some of the rules debt collectors must follow are detailed in a brochure provided by the Indiana Legal Services, Inc.. These rules include:
 

• Within 5 days after first contacting you, the collector must send a written notice telling you the amount you owe, the name of the creditor, and what to do if you believe you don’t owe that money, or you believe that the amount is wrong.
• The collector may use mail, telephone, telegram or Fax, but may not contact you at an unreasonable place or time.
• The collector is allowed to contact other people about you – and only once - solely for the purpose of verifying your location, and is not permitted to discuss your debt with anyone but you or your attorney.

As a debt consolidation lawyer as well as an Indianapolis bankruptcy lawyer, I’ve often helped clients get relief from the extra stress of dealing with collection agencies by helping them compose exactly this kind of letter, reminding them to send it by certified mail with “return receipt requested”.

Certified Financial Planner Ken Clark, in his book Getting Out of Debt, provides a sample Cease and Desist letter in the book’s appendix. Here’s the general idea:

The letter begins by saying “This serves as legal notice under the provisions of the Fair Debt Collection Practices Act to cease and desist from all communication with me.”

The letter goes on to make two points:

a) If the debt collector fails to comply, the debtor will file a formal complaint with the Federal Trade Commission.
b) The debtor chooses to work directly with the original creditor, not with any collection agency.

Many collection agencies don’t stop their efforts even after the debt has been discharged through bankruptcy in Indiana!  Of course, according to law, once a debt has been discharged, collectors have no right to demand payment.  But, with debt being “sold” from creditor to creditor, it often happens that a company is unaware that the debt has been paid off or discharged.  In fact, paralegals in the Mark Zuckerberg bankruptcy law office need to spend valuable time working on cases where debt collectors are still going after our clients years after they’ve emerged from bankruptcy.

Still, getting your response to bill collectors down in black and white can often make a big difference in terms of “turning down the heat” and the pressure of harassment.

Since the main goal of this blog is to provide bankruptcy information in Indiana, whenever a blog reader poses a question I think will be of general interest, I want to be sure I include my answer in a blog post. It’s interesting that this particular reader is asking about “lookback” on assets in bankruptcy.

“Lookback” is a technical term, the type I and the Bloomington, Anderson, and Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices might use.  But even we bankruptcy attorneys in Indiana would use that term only infrequently. 

I say that because lookback generally doesn’t apply to bankruptcy, with one very important exception. The court generally bases its rulings on assets the debtor owns as of the date of filing bankruptcy.

The one big exception is this: if assets were transferred within the two years leading up to a bankruptcy in Indiana, that facts need to be disclosed to the court. Put another way, the court can “look back” two years to discover whether there were any fraudulent transfers of assets that might have been used to satisfy creditors. If the sale or transfer of any asset is judged by the court to have been solely for the purpose of keeping that asset outside the “bankruptcy estate”, the bankruptcy trustee has the power to do any or all of three things:

a) Cancel the sale and bring that asset back in to the bankruptcy estate so that it can be sold by the trustee, with the proceeds used to repay debt
b) Deny the bankruptcy petition altogether, dismissing the case.
c) Charge fines or even levy a prison sentence.  (Bankruptcy fraud is a felony.  Fines can be as much as $500,000, and, in the worst of cases, prison sentences of up to five years can be declared.

As a debt consolidation lawyer and Indianapolis bankruptcy lawyer for more than twenty years, a very large part of my work involves helping people prepare for the Creditors’ Meeting, which is one of the important steps in the bankruptcy process.
At this meeting, the bankruptcy trustee will generally ask the debtor four kinds of questions:

• Questions about the reasons for filing bankruptcy
• Questions about the assets listed on the paperwork submitted to the Court
• Questions about whether, within the two years before filing, any assets were transferred (given or sold) to family or friends. This is where “lookback” applies.
• Questions about whether any money is expected to be coming in (tax refund, inheritance, sweepstakes money already won, or accident settlement)

One other way in which the term “lookback” applies to bankruptcy has to do with cash advances on credit cards. If, within the 70 days leading up to when a bankruptcy case is filed, the debtor took cash advances of more than $750, (with money now gone and the debtor asking to have that debt discharged), that is considered to be nondischargeable debt.

So, while in general, the bankruptcy court makes its judgments based on assets owned as of the date of the filing, the court is allowed to “look back” to find fraudulent transfers that happened in the months and years preceding that date.

As I continue to offer bankruptcy services in Indiana, I often need to remind my Indiana bankruptcy clients and blog readers that the bankruptcy system is in place to offer responsible and honest individuals and business owners a chance to recover from financial setbacks too big to handle without help. But, for the system to work, creditors need to be treated fairly as well.

Barry Corbin's name is not nearly as well-known as Nicholas Cage's, but Corbin just joined the list of celebrities who've filed bankruptcy. Far from rejoicing that another of the rich and famous is suffering from financial setbacks, I talk about stars' troubles only for purposes of illustrating how the bankruptcy safety net works.

Needless to say, as a bankruptcy attorney in Indiana, I must observe client confidentiality for the tens of thousands of clients whom I've helped with filing personal bankruptcy in Indiana, as well as for the thousands of clients who have filed small business bankruptcy in Indiana. When there's already a story in the news about a celebrity bankruptcy, by contrast, I am permitted to comment in my bankruptcy blog posts.

Barry Corbin, you might remember, was "Uncle Bob" to John Travolta in the movie Urban Cowboy, and played on TV in both the Dallas and Police Academy series.
It's interesting that just a year ago, I was writing about Michael Vick filing bankruptcy and using that news story to illustrate the different steps in the bankruptcy process, including the Creditors' Meeting.  Then, just a couple of months ago I was writing blog posts about Nicholas Cage filing bankruptcy, and, from my vantage point as a debt consolidation lawyer and someone who's been offering Indiana bankruptcy help for almost a quarter century,  analyzing some of the factors that led to that actor's troubles.

One factor common in all three of these celebrity bankruptcy stories is real estate.  When discussing Chapter 13 bankruptcy law in Indiana, I always explain that foreclosure and bankruptcy are two separate legal processes, even though in most client situations, both seem to play a part in the financial troubles.
 

• In the Michael Vick case, one of the biggest assets that was put up for auction in order to pay creditors was a luxury home he owned in Atlanta.
• Nicholas Cage had already lost two homes in New Orleans to foreclosure and needed to sell other properties at a big discount to raise money to pay creditors.
• Barry Corbin is trying to reduce costs by selling his home in Texas, using the proceeds to pay creditors.

In all three cases, the fact that real estate values have dropped has delayed the sale of the homes.  The drop in home prices is affecting many Indiana residents who are trying to downsize and keep their bills paid, but who are being forced to consider bankruptcy.

A second factor, tax debt, played a part with Nicholas Cage, but doesn't appear to be the issue with Barry Corbin. (According to Forbes, Nicholas Cage owes more than $800,000 in back taxes and penalties.)

The thing about the Barry Corbin case that really resonated with me (in fact, I was discussing this very thing the other day with the Columbus bankruptcy lawyers who work in the Mark Zuckerberg law offices there) is something Corbin's lawyer said about the reason Corbin needed to file bankruptcy:

"The types of movies that he is used to making, they are not making anymore."

In the course of my work as an Indianapolis bankruptcy attorney, it's very, very rare that I deal with a celebrity case.  The vast majority of my Indiana bankruptcy clients are everyday working people and small business owners. When most of these business owners first seek my help, they admit they are upset and even ashamed that their businesses are in trouble. Yet, as I learn more about their stories, I usually find these troubles were caused by changes in their industry that were beyond their control.

Things change, even when we most wish they would remain the same. Sometimes, they're "just not making them any more!"  That's when good people need society's help in the form of bankruptcy to give them a fresh financial start.

Two law school professors have concluded that the bankruptcy system in our country is far from functioning as effectively and helpfully as might be. Ronald Mann of Columbia University Law School and Katherine Porter of the University of Iowa College of Law have written a paper on the subject, called Saving Up For Bankruptcy, and many of the things Mann and Porter talk about are things I wrestle with every day as an Indiana bankruptcy attorney and debt consolidation lawyer.

The main problem that Mann and Porter find is that "only a few of those for whom bankruptcy would be economically valuable ever choose to file."  Through interviewing industry professionals (attorneys, trustees, and judges) and through gathering data from judicial filing records, the two professors try to answer two questions:

• What distinguishes those who file from those who don't?
• What determines the timing of when people file bankruptcy?

Mann and Porter found out two very interesting things:

• Creditor collection activity does not force people into filing an immediate bankruptcy. Harassment from creditors wears people down over time, "like water dripping on a stone".
• The primary factor that affects the date on which people file is whether they have saved up enough money to pay the attorney and filing fees.

Based upon these findings, the two professors have two recommendations for changing the system:

• Collection calls need to be stopped through a "do not call list" -type mechanism. This would eliminate many of the costs of debt collection and take the needless pressure off the debtors. Excessive collection efforts, according to the authors, lead to inappropriate filings, not well-thought out courses of action by debtors.
• Low-income, low asset filers (the ones who really need the bankruptcy remedy) would have access to a simplified administrative process without the costs of the full court process that is the only option available today.

Until such time as this kind of recommendation can find its way into law, I continue to offer Indiana bankruptcy help. I caution all my Indiana bankruptcy clients and blog readers about creditors who call…and call…and call.  Under the new bankruptcy laws in Indiana, you have rights.  What's more, in this state you're allowed to record a telephone conversation so long as one party gives consent (that could be you!).  So, if you believe a debt collector is violating the Fair Debt Collection Practices Act, you can use a recording device on your telephone to gather evidence you can turn in to the Indiana Attorney General's office.

My own experience in providing Indiana bankruptcy help for the past almost twenty-five years bears out what Mann and Porter say about clients waiting to file because they need to save up money for bankruptcy filing fees (approximately $3,800 for Chapter 13 and approximately $350 for Chapter 7).  Like them, I notice a bankruptcy filing "peak" around the time people receive tax refunds.

Saving Up For Bankruptcy is certainly a thought-provoking paper.  Bankruptcy law has evolved over the years since 1815, when it was first established. As a certified consumer bankruptcy specialist, I have been involved in some of the changes in Indiana bankruptcy laws over the years. But, until the new bankruptcy laws in Indiana change again, all I can do is keep helping Indiana bankruptcy clients navigate the existing bankruptcy system.  The Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers who are my colleagues help me offer the most up-to-date information and Indiana bankruptcy services,  one client at a time.

As a debt consolidation lawyer in Indiana, one of the many things I do is help stop foreclosures.  Well, one evening while driving home, I tuned into the Howard Clark Show on WIBC, and heard him discussing short sales and foreclosures.  Howard was offering a special tip to listeners who were interested in buying distressed real estate, so that banks wouldn't "demolish their credit scores."

Clark's tip was referring to credit checks. When investors wanted to bid on a home being sold in a short sale or on one being sold by a lender after a foreclosure, the banks would run a credit check on every bidder, and do that every time they bid.  That resulted in a lot of credit inquiries showing up on bidders' credit reports.

As an Indianapolis lawyer for bankruptcy, I often give clients who have emerged from bankruptcy the same kind of advice when they're shopping for a car:  Avoid multiple credit inquiries.  I recommend to the Bloomington, Anderson, and Columbus bankruptcy lawyers who work in the Mark Zuckerberg bankruptcy law offices in those cities that they tell their bankruptcy clients the same thing.

Here's what I mean.  If you take a look at your own credit report, you'll probably see multiple credit inquiries listed on it.  Businesses you never heard of might be thinking of trying to get you as a customer.  Prospective employers might have checked your credit report.  An insurance company might have inquired.  Or you might even have requested a check on your own report.  None of these are any problem.  The only inquiries that can negatively affect your credit score are the ones generated when you apply for new credit.

That's why Clark Howard was warning would-be bidders on distressed property about the potential damage to their credit ratings. He explained to listeners that, until their bid was actually accepted, there was no legitimate reason for the bank to check their credit score.  For the same reason, in offering Indiana bankruptcy help, I advise clients who have filed and emerged from individual bankruptcy in Indiana to bring along a copy of their own credit report when they visit different auto dealerships to try to find a car.  That way, they won't have multiple potential lenders all make inquiries with the credit bureaus.  And that way, their credit scores won't be "demolished". 


 

Usually, whenever I or one of the Anderson, Bloomington, Indianapolis, or Columbus bankruptcy lawyers in the Mark Zuckerberg bankruptcy law offices is advising clients on mortgage matters, it's for the purpose of negotiating a mortgage modification with a client's lender. But, as more and more seniors are being forced to consider bankruptcy in Indiana, the subject of reverse mortgages has been coming up frequently is we meet with our clients.

By way of quick review, homeowners over the age of 62 can use a reverse mortgage to convert their home equity into cash they can use. As long as the homeowner continues to occupy the home, repayment is not due; the bank is repaid only when the house is sold.  Seniors are allowed to choose among three ways to receive money out of their home equity:

 

• A line of credit from which the homeowner can draw as needed.
• A monthly fixed amount for a fixed period of time.
• A monthly fixed amount for life. (This is calculated based on seniors' age at the time and the amount of equity they have in their home.

It appears today's bankruptcy blog reader chose to receive a fixed monthly payment out of his reverse mortgage.  His question is: How would filing individual bankruptcy in Indiana affect those monthly payments?

As a bankruptcy attorney in Indiana and also as a debt consolidation lawyer, I've been handling bankruptcy and foreclosure matters for decades. When a reverse mortgage is involved, though, matters become a bit more complicated. So the very first thing I want to emphasize to this blog readers is how important it is for him to seek expert legal advice on reverse mortgages before moving forward with an individual bankruptcy in Indiana.

Some of the factors that the bankruptcy court will be considering include:

• If a debtor's equity in his/her home doesn't exceed the Indiana exemption of $15,500, he or she can keep the home, even in a Chapter 7 bankruptcy.
• In the case of a reverse mortgage, the "equity" is the unused income that has yet to be paid out to the owner.
• Filing bankruptcy does not constitute a default against the reverse mortgage, so foreclosure is not an issue.

About the income:

• As part of filing bankruptcy, the homeowner must report all sources of income.  That would include the reverse mortgage payments.
• In a Chapter 13 bankruptcy, that income would be considered in created a debt repayment plan.

Every bankruptcy situation is different.  Designing the right strategy for each client is part of the skill required of a certified consumer bankruptcy specialist, and is what makes my work so interesting after all these years of practice.