Indiana Lawyer Bankruptcy

For me as an Indianapolis bankruptcy attorney, the best news I heard was that Finish Line plans to add 327 jobs to the 700-person labor force it already has in Indiana. And, although Albion is far north of where the four Zuckerberg bankruptcy law offices are located, I was happy to read that a New Busche plant is opening there, with the company planning to add 120 jobs. Construction job growth in Indiana as a whole rose by more than 7,000, according to the Louisville Business Journal.

When one of my Columbus bankruptcy lawyer colleagues called my attention to the fact that the Arden plant in Kendallville plans to close next month, causing 46 workers to be laid off, that, on the other hand was not welcome news at all.

Since for the past 25 years I’ve been a debt consolidation lawyer offering Indiana bankruptcy help, the availability of good jobs is of great importance in the work I do. When there are well-paid jobs to be had, debtors are able to get back on their financial feet after filing personal bankruptcy in Indiana.  Those who’ve filed individual bankruptcy under Chapter 13 bankruptcy law are able to keep up with their scheduled debt repayments. People still need help to stop foreclosure and sometimes student loan debt help, but at least fewer come to see us bankruptcy attorneys in Indiana looking for payday loan debt help. (Readers of  these Bankruptcy in Indiana articles know what a low opinion I have of payday lending.)

Recently, the Labor Department came out with a very hopeful statistic: the percentage of adults working in the U.S. has reached 58.6 percent, the highest level in two years. On the minus side, Indiana remains one of the worst states when it comes to the wage gap between men and women.

The new bankruptcy laws of Indiana are designed to offer honest debtors the chance to make a fresh financial start. That’s what my legal career has been is all about. Remember President Clinton saying “It’s the economy, stupid!”  Well, neither I nor my clients are stupid, but for us, it really is all about the economy and the jobs!

Remember the late-night TV hawker telling you his team of former IRS agents have helped thousands of “good people just like you” battle the IRS?  Well, it seems TaxMasters has lost the battle, because that firm just filed bankruptcy. A very similar firm, J.K. Harris, had already filed bankruptcy last year.

At the Zuckerberg bankruptcy law offices, we’re hardly surprised, because many of the Indiana taxpayers who have been left stranded have been coming to us.  By this time, many need help to stop foreclosure, payday loan debt help, and student loan debt help, on top of having big fat tax problems!

Ironically, (and very sadly), most of these clients never thought a bankruptcy attorney in Indiana would be able to help with tax problems.  So, instead, they tried the late-nite TV route to gain relief from their biggest, baddest creditor – the IRS.

In fact, one very common myth is that bankruptcy cannot help with back taxes. That is simply not true. As a debt consolidation lawyer offering bankruptcy services in Indiana for more than 25 years, I can tell you we get rid of old income tax bills for clients all the time. Taxation and knowing all the ins and outs of the legal advantages is one area where experience counts.

Just  one important example is an IRS Offer of Compromise. That option needs to be weighed and compared with filing personal or small business bankruptcy under the new bankruptcy laws of Indiana.

One of our Columbus bankruptcy lawyers remarked that it’s very deplorable that many clients have paid fees to TaxMasters to help them with their tax problems, and most of that money will never be recovered  (just adding salt to the wounds of these poor people).  For those who paid TaxMasters to help them with their small business taxes, things are even worse.

Whether you’re a former clients of TaxMasters or not, if you live in the Anderson area or anywhere in Indiana south of there, know this: At the Zuckerberg bankruptcy law offices, you can get help with tax problems along with other debt problems. 

This spring, news about student loan debt has been taking front and center stage, and all good bankruptcy attorneys in Indiana are paying close attention.

The issue itself is hardly new.  In these Bankruptcy in Indiana articles, I’ve pointed out many times that the new bankruptcy laws of Indiana, which follow federal guidelines, generally do not allow for student loans to be discharged in bankruptcy.  The ongoing efforts of Senator Dick Durbin to change the situation is something all of us in the Zuckerberg bankruptcy law offices heartily applaud and support.

The Seattle Times wonders whether “the problem is shaping up to become America’s next economic crisis.” My colleagues the Bloomington, Indianapolis, Anderson, and Columbus bankruptcy lawyers are concerned, too.  More and more former students visit us seeking student loan debt help, sometimes (in the worst cases) along with payday loan debt help.

Having served as a debt consolidation lawyer for more than 25 years, I’m glad to see the problem finally getting the attention it deserves.  What has been triggering all the latest news is a deadline, only six weeks from now.  Yes, on July 1, 2012, the interest rate on federal student loans is scheduled to double.  As rates go from 3.4% to 6.8%, a big, bad problem will become even worse.

“Unlike other forms of consumer debt, student loan debt is growing,” points out the Washington Post, adding that “the number of borrowers defaulting on federal loans has jumped sharply recently.” 

To put this information in perspective, let me add some qualifiers:

• Loans issued before July 1, 2012 will not be hit with the higher rate.
• The jump in rates will not affect Stafford loans (already at 6.8%) or PLUS loans for parents (now at 7.9%).

Now, if the new bankruptcy laws of Indiana DON”T change and the interest rate hike DOES happen, can filing personal bankruptcy in Indiana help in any way?  Make that a “yes”.  Here’s how:

Other consumer debt can be discharged through bankruptcy.  That is true for both bankruptcy Chapter 7 in Indiana and for bankruptcies filed under Chapter 13 bankruptcy law.)  Those discharges can free up cash that can be used towards student loan repayments.

The debates go on, and the news can change every day.  Stay tuned here to these Bankruptcy in Indiana articles, so you can stay up to date on student loan debt.

I can tell you, all the Indianapolis bankruptcy attorneys who work in the Zuckerberg bankruptcy law offices were happy to read the Indianapolis Business Journal article explaining that “the Indianapolis jobs picture is brighter than previous reports indicated.” 

This won’t be the first time I’ve emphasized to Bankruptcy in Indiana readers how crucial it is for those who’ve filed personal bankruptcy in Indiana to have regular, sufficient income from jobs. That holds true not only for those debtors who file under Chapter 13 bankruptcy law in Indiana (who must have income to keep up with their 3-5 year debt repayment plans), but even for those who file bankruptcy Chapter 7 in Indiana (who need to keep the bills paid and re-establish their financial lives).

“But problems persist,” adds the IBJ. “There’s been no increase in the number of high-paying manufacturing jobs since early 2011….New jobs here tend to be lower-paying service jobs, meaning average wages aren’t keeping pace with inflation.”

Since every day we’re working with people who need payday loan debt help, student loan debt help (more about that topic next time), and help to stop foreclosure, we lawyers for bankruptcy are happy for each job announcement.  Two recent good-news items are:

• Steering manufacturing company ThyseenKrupp Presta in Terra Haute, Indiana, is expanding its manufacturing facility and plans to create 120 jobs over the next two years.
• Cummins  announced it’s building a new office building and warehouse in Seymour, Indiana, and plans to add 290 jobs over the next three years.
   

Statistics are moving along this kind of hopeful track as well, with the number of Indiana bankruptcy “terminations” increasing (meaning people emerging from bankruptcy to make a fresh financial start). Bank loan statistics are increasing as well.  In other words local bankers are seeing an increase in loan demand by Hoosier business owners, according to the IBJ. Since Indiana is home to so very many small businesses, their expansion is good for those who need to find jobs.

For all these reasons, I’ve considered it part of my job, part of offering Indiana bankruptcy information, to write about jobs in our state and to gather bankruptcy statistics. Here we are at the beginning of May, and the latest statistics that I’ve found going through the month of March. After more than 25 years practicing Indiana bankruptcy law, I know that March and April tend to be high months for bankruptcy filings (partly because of tax refunds providing cash for filing fees).
 

When it comes right down to it, for the process of Indiana bankruptcy – individual or small business bankruptcy in Indiana - to succeed, it takes jobs!

“Some Americans spend their tax refunds on high-tech gadgets and long-awaited vacations.  Others use the cash to file for bankruptcy protection,” writes columnist Tammy Bruce.

The National Bureau of Economic Research confirms Bruce’s observation.  Of course, as a longtime debt consolidation lawyer offering Indiana bankruptcy help, I could have told Tammy Bruce that fact myself!

Zero Hedge.com calls the situation “another sad reflection on the state of the economy”, citing a USAToday report showing “more than 200,000 households will use their tax refunds this year to pay for a bankruptcy filing and associated legal fees.”

For 2012, the tie between 2011 tax refunds and bankruptcy in Indiana is already evident at all four Zuckerberg bankruptcy law offices.  In fact, as one of our Columbus bankruptcy lawyers reminds me, although people come to us needing help for different problems, including:

• Help to stop foreclosure
• Student loan debt help
• Payday loan debt help
• Debt problems relating to divorce

One thing those people say prevented them from coming in earlier is that they hadn’t saved enough money to pay the bankruptcy filing fees.  It seems that reality holds true for bankruptcy Chapter 7 in Indiana cases as well as for those filing under Chapter 13 bankruptcy law, and even for filers of small business bankruptcy in Indiana.

It hurts me to think of debtors as walking on a narrow plank over a river – equally afraid of falling off on either the left or right side.  On the one hand, you need to turn off all the harassing collection calls, along with the rising late penalties and interest charges.  On the other side, you simply don’t have the money, you think, to cover the legal costs of filing individual bankruptcy in Indiana.  What are those costs?  Several thousand dollars for Chapter 13, several hundred for Chapter 7.

By now, I hope you’ve already filed your 2011 tax returns (or filed for an extension). No matter which, I’m going to urge you not to wait.  Visiting with an experienced Indiana lawyer for bankruptcy is the first step to take in order to explore your options and get a plan into place.  The good news is, you don’t need cash or a tax refund to do that!

“Student loan debt is just one step behind the IRS on the ladder of debt longevity,” says Steve Bucci of Bankrate.com.  What Bucci means, as I often explain to clients who come to the Zuckerberg bankruptcy law offices in need of student loan debt help, is that there’s no statute of limitations when it comes to student loans.

Each state has statutes of limitations, which are time limits after which debt is no longer legally enforceable.  In Indiana, where I’ve been a lawyer for bankruptcy for the past twenty-five years, the statute of limitations on credit card debt is six years, and, on written contracts, ten years.  Statutes of limitation exist for most federal crimes, too, with the exception of certain offenses such as espionage and treason – and…bankruptcy!

One other way in which student loan debt is an exception to the general rule is that it’s almost never dischargeable through filing personal bankruptcy in Indiana.  Basically, most courts have held that you are stuck with student loans unless you can prove you are permanently and totally disabled – or totally unable to earn even the barest of a living wage.

Has that always been true? one reader of my Bankruptcy in Indiana articles wanted to know. Not really.  Before 1976 (ten years before I had begun offering Indiana bankruptcy help), federal student loans could be discharged in bankruptcy.  One of the Columbus bankruptcy lawyers who works with me made a list of law change since then:

• The 1978 Bankruptcy Act excluded student loan debt from being dischargeable unless the loan had been in repayment for five years or more.
   
• In 1970, the five-years was changed to seven years.
   
• In 2005, Congress eliminated the discharge altogether on all federal loans and most private student loans. The only exception became “undue hardship”.
   

I need to remind Bankruptcy in Indiana readers that this non-eligibility for bankruptcy discharge of student loan debt applies whether you are filing bankruptcy Chapter 7 in Indiana or filing under Chapter 13 bankruptcy law.

All good bankruptcy attorneys in Indiana continue to join their colleagues in other states in appealing to Congress to change the laws.  In the meanwhile, the way we help clients is that filing personal bankruptcy ion Indiana puts the student loan collectors on hold for as long as five years, giving debtors some breathing room and a chance to get rid of other debts.
 

Our clients are in essence saying “Gimme a break!”  Bankruptcy can do just that!

Have you ever found that an argument against something can turn out to be an argument for that very thing? Well, as an Indiana debt consolidation lawyer, I found that to be true about an article in Inside Indiana Business about alternatives to bankruptcy. In other words, while the author, Jeffrey Alan Hokanson was listing reasons why filing bankruptcy in Indiana is not a good idea, I feel he actually proves why it is!

“Chapter 11 can be a haven for a distressed company,” Hokanson begins. “Debts are stayed and managers are provided a respite to concentrate on strategic decisions for the business.”  Well, after twenty-five years offering small business bankruptcy help in Indiana, I’d say that, from the point of view of a business owner, “haven” and “respite” would go on the positive side of the ledger!

One alternative to bankruptcy in Indiana that Hokanson discussed is called a composition agreement.  When that works, he explains, all the creditors decide it’s in their best interest to work together (with no bankruptcy trustee to manage the process). As a longtime lawyer for bankruptcy in Indiana, I had to smile when Hokanson added that the difficulty with these composition arrangements is getting the cooperation of the different creditors. One of the Columbus bankruptcy lawyers in my office noticed that Hokanson himself referred to the process as “herding cats”.

In the process of filing small business bankruptcy in Indiana or personal bankruptcy in Indiana, by contrast, there’s no cat-herding for a debtor to do. The trustee, generally an attorney from the local community, works under the supervision of a U.S. Trustee connected with that region. (For example, I work within the Southern Indiana Bankruptcy District.). The process is usually very smooth, both in bankruptcy Chapter 7 in Indiana and in cases filed under Chapter 13 bankruptcy law. 

The points Hokanson was making may be more relevant when a large business with many suppliers, employees, retirees, and vendors must cooperate.  But for most of the clients we see in our Zuckerberg bankruptcy law offices, it's easier on debtors to use the bankruptcy process. The debtors deal with me; I and my colleagues deal with the trustee.

In cases where a small business bankruptcy in Indiana is related to personal bankruptcy in Indiana (we see a lot of those!), our clients often need help to stop foreclosure along with everything else.  There, too, it's simpler for the clients to allow us to negotiate with their lenders on mortgage modifications.

Once your bankruptcy petition has been approved, the trustee will be managing and overseeing the process, doing whatever “herding” is needed. You, on the other hand, no longer need to deal with your creditors, who will be notified that you’ve filed personal bankruptcy in Indiana, (or that you, as a business owner, have filed small business bankruptcy in Indiana) and that they are to halt all collection efforts against you.  Meanwhile, as Hokanson mentioned, you can concentrate on making strategic decisions for your business – or when it comes to your own finances, making a fresh start.

KISS - You want to keep things as simple as possible, and, (because you're not stupid), you don't want to be herding cats - you want to make a fresh financial start!

A new study from Washington University, Columbia University and the University of Chicago suggests that people are using their income tax refund to file for bankruptcy, reports the Huffington Post.

Ah, but any one of the Indiana bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices could have told you that!

According to the article, bankruptcy filings increase after people receive their refunds. The issue: It costs money to file for bankruptcy and many Americans could not afford to pay fees necessary to file without the refund money.  “The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act raised the legal and administrative fees from an average of $921 to $1,477 and mandated the filer pay for credit counseling,” the article goes on to explain.

For the past two months, I and my colleagues the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers have had our hands full with questions that have to do with tax refunds and taxes, as you might imagine. Now that the April 15 tax deadline deadline has passed, it might be a good time to sum up all the “ties” between bankruptcy and taxes for the benefit of our Bankruptcy in Indiana readers.

First, one of the top 15 myths about bankruptcy in Indiana is that you can’t use it get rid of back taxes. But, of course you can.  As a debt consolidation lawyer offering Indiana bankruptcy help for more than 25 years, I can tell you - we get rid of taxes for our clients all the time. It’s true that filing bankruptcy in Indiana – whether that’s bankruptcy Chapter 7 in Indiana, Chapter 13 bankruptcy law in Indiana, or even small business bankruptcy – does not get rid of payroll withholding tax or of sales taxes.  But when it comes to income taxes that are more than three years old – those taxes are very often discharged in bankruptcy.

Now, what about those tax refunds? If you’ve already received your money and you still have it, it will need to be reported as part of your assets on the bankruptcy paperwork, that is, unless you use the money to pay the fees for the bankruptcy itself.

If you’re still waiting for the refund, the court will need to know you’re expecting the money.  Again, if that money is needed for legal fees, that will be disclosed in your paperwork as well.

“According to our research,” says Washington University’s Jialan Wang, “bankruptcy fees prevent the most financially distressed households from being able to file, and tens of thousands of households will have trouble saving up for bankruptcy in 2012.” 

Nothing, however, needs to stand in the way of your having a no-cost, no-obligation exploratory meeting with one of our good bankruptcy attorneys in Indiana!

There’s a reason we refer to it as bankruptcy “protection”. In fact, you might say the whole point of filing personal bankruptcy in Indiana (or small business bankruptcy in Indiana, for that matter) is just that – protection from creditors. Now, there’s nothing wrong with wanting to get paid when someone owes you money, but the law is quite clear about the automatic stay, which stops all collection efforts once a debtor has filed bankruptcy.

Even before an individual  bankruptcy petition has been filed (which, in the cases handled by the Zuckerberg bankruptcy law offices might be bankruptcy Chapter 7 in Indiana or perhaps a filing under Chapter 13 bankruptcy law, there is a very definitive “no-no” list for creditors when it comes to harassing debtors. Creditors can’t:

•  “inflate”, asking for more than you owe
   
• "pester”, calling before 8AM or after 9AM or on Sunday, or calling you at work if you’ve asked them not to
   
• “be violent”, caused damage to your property or your reputation
   
• “gossip”, disclosing your debt to any third party

Well, then after the bankruptcy has been filed, it’s totally “hands-off” for creditors. A recent warning by a bankruptcy judge in Florida emphasized this exact point to big banks:
When your debtors go into bankruptcy, quit trying to get money out of them or you'll be the one who ends up paying!

Matters came to a head when, in Florida, after a debtor had already filed for individual bankruptcy protection, Bank of America proceeded to call the debtor an additional 38 times to ask about the outstanding payments, according to the Bankruptcy Law Network.

The Fair Debt collection Practices Act allows a debtor to recover damages if its rules are violated. I asked the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers to be alert for such violations, so that we can make sure debtors are given every chance to get back on their feet without pressure from their creditors.

Violations happen, as we see in the Bank of America story, and they happen all the time.  One next step debtors can take is notifying the Indiana Attorney General’s Office online (http://www.indianaconsumer.com/filecomplaint.asp) or by calling 317 232-6330 or 800-382-5516.  

Or, call the Zuckerberg bankruptcy law offices – going up against creditors who break the law - now, that’s one battle we’ll willingly take up on your behalf!

“If you address the common reasons for failure up front, you’ll be much less likely to fall victim to them yourself,” Patricia Schaefer advises first-time entrepreneurs, listing “Seven Pitfalls of Business Failure and How to Avoid Them”.

Sorry, but as a longtime debt consolidation lawyer who’s helped thousands of entrepreneurs file small business bankruptcy in Indiana, I need to remind Bankruptcy in Indiana readers that, more often than you might imagine, the cause of business failure is something Schaefer totally left off her list.  I’m referring to what I call “the ripple effect”.

Every one of the good bankruptcy attorneys in Indiana who works in the Zuckerberg bankruptcy law offices has offered Indiana bankruptcy help to small Indiana business owners who made none of those seven most common mistakes.  These were entrepreneurs who had a plan and who worked that plan, and yet – their businesses failed. What “did them in” were negative forces beyond their control.

I’m in a position to know. With Indiana being home to hundreds of thousands of small businesses, and with me having over twenty-five years’ experience practicing Indiana bankruptcy law, I’ve seen a lot.  In fact, during the recent recession, I’ve watched the 25% annual increase in the number of small business bankruptcies filed in our state. I know all too well that high on the list of bankruptcy myths is the “myth of the corporate veil”. The myth is that, if a business is held in the form of a corporation, a partnership, or an LLC, that business is a separate legal entity from its owners and can file bankruptcy on its own without affecting the owners’ personal finances. 

That’s the myth.  Here’s the reality, as my colleague the Columbus bankruptcy attorney is constantly reminding her clients: The majority of small business owners never kept that veil intact, because, from the get-go, and out of necessity, they intermingled business and personal finances. 

I got a sharp reminder of the power of the “ripple effect” while reading about Ener1, which is an Indiana company with branches in Indianapolis, Noblesville, and Cumberland.  At one point Ener1 had big plans to hire 1400 people to make batteries for electric cars. Then the “ripple effect” hit, and in January  Ener1 filed bankruptcy in Indiana. What went wrong?

The recession, which brought a slowing demand for new cars, and in particular, electric cars, caused. Ener1’s biggest customer to file bankruptcy. Then, the failure of Solyndra, a California solar panel maker, cooled taxpayers’ willingness to offer big government grants to “green energy” companies. This month, Ener1 is emerging from bankruptcy, having changed its game plan to focus on commercial and industrial vehicle batteries.

Ener1 is not small business, but with small business bankruptcy clients,  many, many factors often combine to put pressure on business owners to file personal bankruptcy in Indiana along with small business bankruptcy.  Often, as an Indianapolis lawyer for bankruptcy, I’ll see entrepreneurs who, despite the recession, proved to be very skillful business managers, operating under a good plan in the right location.  Then, his spouse lost her job. An adult child needed financial help with overwhelming medical bills. A divorce happened. A key supplier or customer fell by the wayside. New regulations put a big and unexpected financial burden on the small business.

Precisely because I and all the Indiana bankruptcy lawyers who work with me know how very bitter a pill it can be for any owner of a small business to face failure, we offer consulting services to help those small business avoid bankruptcy, helping prioritize payments, negotiate with suppliers and creditors, and survive long enough to come out the other end.

But, just so you know, Patrica Schaefer, it’s not always one of those seven common pitfalls!

The new bankruptcy laws of Indiana may be strict, but in another sense, they’re generous.  That’s especially true when it comes to people filing personal bankruptcy in Indiana who still want to give to charitable causes while paying their debts.

In these Bankruptcy in Indiana articles, I’ve often talked about bankruptcy myths, one of which is that only financially careless people ever file individual bankruptcy in Indiana.  The fact is, not only  are typical debtors who seek Indiana bankruptcy help far from “deadbeats”, often they want to help others less fortunate than themselves!

One of my colleagues, a Columbus bankruptcy lawyer, called my attention to a headline in Forbes Magazine: “Debtor’s Charitable Giving Limited to 15% of Gross Income in Bankruptcy”. In a recent ruling in a Colorado bankruptcy case, it seems, the court allowed a couple to give 15% of their gross income to their church, even though that meant less money would be available to pay their creditors under Chapter 13 bankruptcy law.

Over the twenty five years that I’ve served as a debt consolidation lawyer offering Indiana bankruptcy help, charitable giving during bankruptcy has been handled in different ways.  Back in 2006, for example, we in the Zuckerberg bankruptcy law offices were discussing a New York ruling which said that debtors who had above-median income could not make any charitable donations while they were in their debt repayment plan period.

I’m happy to report that current law allows contributions if:

• The money is going to an approved “qualified” religious or charitable organization
   
• The contribution isn’t more than 15% of the debtor’s gross income.
   

I must say that, for most of the people who come to me needing help to stop foreclosure on their home, help recovering a car that’s been repossessed, payday loan debt help, or student loan debt help, charitable giving is not at the top of their minds as they contemplate filing individual bankruptcy in Indiana.

On the other hand, debtors need to make some hard, even painful decisions as they prepare to file bankruptcy. Feeling that they can still do their part for a cause they believe in helps get them through, holding their heads high until they get back on their financial feet!

A recent news item in the Baltimore Sun gives me the chance to paint a clearer picture of the kind of work a bankruptcy trustee does. True, the story is about a newspaper company, not someone filing individual bankruptcy in Indiana. Still, it sheds light on the job description of a trustee, so that readers of these Bankruptcy in Indiana articles can get a better handle on the way the system works.

“The new face in the office of the publisher of the Baltimore Jewish Times….is Zvi Guttman…who opened his laptop and began the work of a bankruptcy trustee, selling the business and searching for assets to pay creditors,” the feature story began.

When it comes to personal bankruptcy in Indiana, the trustee is typically a lawyer hired by the court.  That is the person we Indiana attorneys for bankruptcy deal with on behalf of our clients. 

The trustee will:

• Review the bankruptcy petition and all the financial statements we turn in to the court
   
• Chair the creditors’ meeting (once the trustee has given the debtor and the creditors a chance to comment on the bankruptcy petition and is satisfied that the information is correct, Stage One of the bankruptcy is complete)
   
• Sell any assets (Let me remind you that it’s very rare for any of our clients who file bankruptcy Chapter 7 in Indiana to lose any assets)
   
• Distribute funds to creditors
   
• When clients file under Chapter 13 bankruptcy law, the trustee will collect each monthly payment, and then pay attorney fees and make payments to creditors
   

In other words, the bankruptcy trustee administers the process on behalf of the court.  The court, in the case of clients of the Zuckerberg bankruptcy law offices, is the U.S. Bankruptcy Court of Indiana’s Southern Bankruptcy District.

Courts, of course, have judges.  But almost always, as we Indiana bankruptcy lawyers represent our clients, it will be the bankruptcy trustee with whom we’re dealing.
 

More and more these days, debt consolidation lawyers like me are dealing with adults, long out of school, who are in need of student loan debt help.  Nowadays, in fact, student loan debt is hitting the headlines – and the Senate floor.

The issues surrounding student loan debt were summarized by Senator Durbin, who recommended the elimination of the law that makes privately issued student loans non-dischargeable in bankruptcy.

All of us in the Zuckerberg bankruptcy law offices know all too well that the new bankruptcy laws of Indiana (which follow the federal guidelines) treat student loan debt in a fashion similar to child support debt, alimony debt, overdue taxes, and criminal fines.  My colleagues the Columbus bankruptcy lawyers often quote Illinois senator Dick Durbin, who said “Students who take out loans to finance their education should have the same right to discharge their debt in bankruptcy that other borrowers enjoy.”

Actually, as I often remind Bankruptcy in Indiana readers, while student loans are very, very difficult to discharge, it’s not impossible to do that.  Courts evaluate a debtor’s “degree of hardship”.  If the following three things are true (and in the 25 years I’ve been a lawyer for bankruptcy in Indiana, there have been isolated cases where all three of these were true), there is a chance that the bankruptcy court will rule in favor of a discharge of student loan debt.

•  Debtor could not possibly maintain even a minimal standard of living for him/herself and for dependents if he/she were forced to repay the student loan
   
•  This state of affairs is likely to persist throughout the repayment period
   
• Debtor has made a good-faith effort to repay the loans, but just couldn’t do it

Remember, by the time someone has come to me seeking Indiana bankruptcy help, things are already bad.  Very bad. Years and years may have passed since her college days, but she lost her job last year and couldn’t keep up the payments. Or, he may have recently graduated but failed to find work in his field.  In either event, by the time they arrive in my Indianapolis law office, debtors often need help to stop foreclosure, or even payday loan debt help.

This is all part of a very big, very bad statistic: Outstanding student loan debt reached $867 BILLION at the end of last year, greater than the total U.S. credit card debt!

So, under current Indiana bankruptcy law, is there hope for people who need student loan debt help?  The answer is “yes”.  And that’s true even if you can’t prove “hardship” under the existing very tough rules.  The very act of filing personal bankruptcy in Indiana triggers the automatic stay, giving you breathing room and protecting you from collection actions on all debt. 

While the bankruptcy/ student loan debate rages on, at my Indiana bankruptcy law offices, the help continues, dealing with problems one situation at a time!

 Late-night TV watching can be very bad for your financial health, I want to again warn all Bankruptcy in Indiana readers.  And, if you don’t believe me, just catch the recent news about TaxMasters.  You remember the redheaded guy on cable, telling you that he and his crew of former IRS agents have helped “good people just like you” battle the IRS? 

For more than twenty-five years, as a debt consolidation lawyer offering bankruptcy services in Indiana, I’ve been trying to get a message of my own across to “good people just like you”.

The tens of thousands of those good people I’ve been able to help at the four Zuckerberg bankruptcy law offices have understood that the way to a fresh financial start does NOT begin at 2:30 AM on their television set.  Whether the best road is bankruptcy Chapter 7 in Indiana or filing personal bankruptcy using Chapter 13 bankruptcy law, or neither of these, the important thing is not to allow precious “time windows” to close before checking out the legitimate options for financial help.

One of my Columbus bankruptcy lawyer colleagues has been collecting news items about these late-nite TV advertisers. Here are just a few of the things she learned:

• Just one month ago, after Houston-based TaxMasters had been accused by attorney generals in two states of deceptive business practices, the company filed bankruptcy.
   
• Another late-night regular advertiser, JKHarris & Co, sued by two states and thousands of unhappy customers, filed bankruptcy last October. 
   
• Roni Deutch (“the Tax Lady”) not only filed for bankruptcy last year, she surrendered her law license!
   

It’s very typical for me to learn, from clients visiting me to ask for Indiana bankruptcy help, that they have first tried other avenues in their attempt to gain relief from creditors. A single mom might have tried to get student loan debt help by negotiating with her lenders – to no avail. A couple trying to keep their mortgage paid after a job loss may have tried to negotiate a mortgage modification – unsuccessfully – and now they need my help to stop foreclosure.  Other debtors may have made payments for many months into a “debt consolidation plan”, only to learn their credit card debt has skyrocketed through late payment fees and increased interest rates. Many, in desperation, have reached the point where they need payday loan debt help from me.

There’s one thing you need to know about Mark Zuckerberg and about bankruptcy attorneys in Indiana in general: An experienced bankruptcy lawyer in Indiana can offer counseling on managing money and budgeting. An experienced attorney for bankruptcy can offer debt consolidation and legal advice about dealing with tax debt.  Only a lawyer can offer legal advice.

But, (and here’s “the thing”)  There’s a reason government regulators and consumer advocates continue to put unscrupulous firms promising quick-fixes on late-night TV out of business!

“It’s got to be one of the most embarrassing things that can happen to a financial planner,” remarked Sheryl Garrett, who helps the Board of Certified Financial Planners hold disciplinary investigations for planners who file personal bankruptcy.

As every one of us lawyers for bankruptcy in Indiana knows, personal bankruptcy is not necessarily - in fact not even most of the time – the result of carelessness about financial matters, and of course, carelessness is even less likely to have been the case with financial planners.

As I’ve been explaining in recent Bankruptcy in Indiana articles, filings of individual bankruptcy are going down.  Still, bankruptcies are up 40% from pre-recession times.  The CFP board reports that 48 of its members filed bankruptcy in 2011, compared with 28 in 2010, and in January, discussions began about a proposal to change the rules for CFP® certificants who file bankruptcy.  Under the old rule, a planner would lose their CFP designation immediately upon reporting they’d filed personal bankruptcy. 

The March issue of Financial Planning, one of the several professional journals I read in order to offer my readers and clients the very latest in Indiana bankruptcy information, reports on the debate going on concerning bankruptcy among financial planners. The proposed change is that, while planners would have to report a bankruptcy filing, there would be no adverse consequences such as being disciplined or losing the CFP® marks because of only one bankruptcy filing.

On a recent visit with the Columbus bankruptcy lawyers who work in the Zuckerberg bankruptcy law offices, we spent quite a bit of time discussing the things 250 respondents had to say in a survey of financial planners concerning the proposed rule change. The responses fell into two extremes:
Against the proposal: “If you are a CFP professional, you should never file a bankruptcy.”
For the proposal: “Financial planners should have the same rights as other people who file bankruptcy and get to keep their jobs.

From my point of view as a longtime debt consolidation lawyer and attorney for bankruptcy in Indiana, the most interesting comment by a financial planner was this: “Planners who file for bankruptcy may indeed receive valuable lessons from their insolvency that ultimately they could teach clients.”

They say “Timing is everything,” and, after more than 25 years as an Indianapolis lawyer for bankruptcy, I can tell you – they’re absolutely right!

A recent Illinois bankruptcy case was the subject of a long discussion the other day at the Zuckerberg bankruptcy law offices, and the story is well worth sharing with Bankruptcy in Indiana readers:

• Mrs. P. borrowed money on a Monday, then on Thursday of the same week, filed personal bankruptcy.   What’s wrong with that? Why did that almost get her bankruptcy case denied? 
   
• The amount borrowed was $1,500, and Mrs. P agreed to make ten installment payments of $319.89 apiece, giving the lender five post-dated checks as security.  This amounts to an annual rate of 395%, not uncommon for me to see when debtors come to me needing payday loan debt help.  She also signed a statement saying she was not intending to file individual bankruptcy.
   
• That Thursday, Mr. and Mrs. P. signed a petition under Chapter 13 bankruptcy law.
   
• The payday lending company, I Need cash, Inc., sued, claiming that Mrs. P. had committed fraud.  The company claimed Mrs. P. had signed the agreement promising not to file bankruptcy, and then used the money they lent her to pay her bankruptcy attorney’s fee. In fact, they said, Mr. P. had met with the bankruptcy attorney even before his wife had taken out the payday loan.
   
• Mrs. P. responded by saying that the money she borrowed had gone towards catching up on late car payments, and that her decision to file bankruptcy was not made until after a later discussion with her husband.
   

You can see how sensitive the timing was – the loan and the bankruptcy were only three days apart.  It’s easy to see why the bankruptcy court might have questioned Mrs. P’s motivation.
But to me, having helped tens of thousands of people file personal bankruptcy in Indiana and small business bankruptcy in Indiana, it was no big surprise that the court ruled in favor of Mr. & Mrs. P. and denied the suit of the payday lending company.  Here’s why:

Despite the pervasive myth about “bankruptcy being for deadbeats”, I know the opposite is the case, and that the majority of people who come seeking Indiana bankruptcy help, do it as an absolute last resort, after they’ve tried every possible way they can think of to avoid it.

I’ve never met Mr. & Mrs. P., of course, but I can readily picture them trying to explore every possible way, even when it was beyond hope, to keep their debts paid – the husband went to find out about bankruptcy, while the wife concentrated on saving their car from repossession and staving off bankruptcy.  Every good bankruptcy attorney in Indiana knows, too, that husbands and wives don’t always agree on the best way to handle a crisis.

The fact is, though, that the bankruptcy safety net needs time to work, and there are rules that must be followed, rules about mandatory credit counseling and rules about borrowing money, that must be done at the right time and in the right order.  Indiana bankruptcy law is very much a matter of timing!
 

Goodness knows, when you’re a debtor contemplating filing individual bankruptcy in Indiana, you won’t need to look very far to find suggestions for what to do instead. In fact, companies offering different kinds of debt relief will probably be looking for you! 

Now, I’ve been a debt consolidation lawyer offering Indiana bankruptcy services for more than twenty-five years, but things have gotten a whole lot more confusing for consumers during the recent recession.  With options of every possible sort being offered via radio and late-night TV or on the Internet, the expression “debt relief” has come to mean many different things to many different people.

The real problem is that when creditors are making your life miserable while you cope with job loss, divorce, and medical costs, you’re not in the best frame of mind to understand those differences.  My Columbus bankruptcy lawyer colleagues, for example, are constantly discovering new “debt settlement companies”.  These agencies have debtors deposit money every month into a trust account.  Once a certain amount has accumulated (which takes a long time, with upfront fees to the agency being deducted), the agency tries to work out a deal with creditors for a reduced lump sum payoff.  Of course, as I keep warning Bankruptcy in Indiana readers, no deal is guaranteed to ever happen, and, meanwhile, the late fees and penalties continue to pile up from those creditors not getting paid.

Debt consolidation companies, on the other hand, offer to combine all your bills into one monthly payment, with idea being to get creditors to make deep interest rate cuts (again, nothing is guaranteed to happen).  Meanwhile, the debt consolidation company is charging nonrefundable fees of its own.

New forms of “debt help” are constantly being offered to consumers.  Sometimes, after so many years of offering Indiana bankruptcy help, working with people who need everything from student loan debt help to payday loan debt help to help to stop foreclosure, I think I’ve seen every possible type of possible alternate “debt help” that can possibly be invented.  The worst of it is, many of the organizations running those late night TV ads or internet ads are simply scams.

State and federal regulators work hard to protect the public against scams, but a lot of well-meaning people fall for them all the same, wasting money they don’t have, and time they can’t afford, as they seek so-called “debt relief” rather than professional Indiana bankruptcy help.

No, numbers don’t lie, but as longtime bankruptcy lawyers in Bloomington, Indiana, we know numbers often need to be explained and analyzed in order for those numbers to convey the right message.  Take job statistics, for example.  It’s extremely important for all the attorneys who work in the four Zuckerberg bankruptcy law offices to follow employment news and to keep our clients and Bankruptcy in Indiana readers up to date on available jobs in our state.

In fact, when it comes to Indiana bankruptcy, jobs are important at every step in the process. For those filing under Chapter 13 bankruptcy law, it’s the regular income from employment that will be the key to qualifying for a three to five year debt repayment plan.  And, for debtors using Chapter 13 to help stop foreclosure, employment income will make all the difference as to whether they succeed. Of course, regular income from a job will be the key to all debtors’ success, whether they’re filing bankruptcy Chapter 7 in Indiana or even small business bankruptcy in Indiana.

The website UScourt.gov compares bankruptcy cases commenced or terminated in 2011 as compared with the year before that (As one of my Columbus bankruptcy lawyer colleagues pointed out, 2012 statistics are not yet available.) For the Indiana Southern Bankruptcy District (Mark Zuckerberg territory), the number of filing actually dropped 6 ½% during the twelve months ending march 31, 2011 as compared with the twelve-month period before that.

I believe the drop is related to all the new jobs about which I’ve been reporting to you Bankruptcy in Indiana readers.  Even more important, the number of “terminations”, which means people emerging from bankruptcy increased 2 1/2%.

Needless to say, job loss or job gain is hardly the only factor in bankruptcy in Indiana. I’m still seeing clients over-burdened with student loan debt and those who are unable to pay medical bills, and many need payday loan debt help.

One University of Illinois law professor believes Americans in general are far from out of the woods when it comes to filing individual bankruptcy – in Indiana or any other state.  As consumer credit has eased, he observes, “people are able to pay for daily necessities – rent, utilities, medical expenses, groceries – with a credit card or through a payday loan.  Thus consumers can use more borrowing to stave off the day of financial reckoning that much longer.”
 

 If you’re reading this Bankruptcy in Indiana article on a computer, you’re part of a challenge the court system is facing.  Since the new bankruptcy laws of Indiana aim to be fair to all parties – debtors and creditors alike, that means all the facts about the situation need to be known to all the parties.

Over the more than 25 years I’ve served as a debt consolidation lawyer offering bankruptcy services in Indiana, the one aspect that’s changed the most has to do with geting that information out.  Say someone files bankruptcy Chapter 7 in Indiana, or files personal bankruptcy using Chapter 13 bankruptcy law.  And say the client has come to one of the four Zuckerberg bankruptcy law offices asking for Indiana bankruptcy help.

A lot of planning then ensues, a lot of gathering information.  There’s a credit counseling process the debtor goes through.  But, all this time, the creditors don’t yet know about any of the goings-on.  They will be notified by the bankruptcy court, but only after a petition has been filed.

And, while the debtor will have listed all his or her creditors on the bankruptcy paperwork, the question still arises – just how will those creditors (plus any others that may have been inadvertently left off the list) be told that someone who owes them money has filed either personal bankruptcy in Indiana or small business bankruptcy in Indiana?

Used to be that the notice of advertisement would simply be placed in the local and/or the national newspaper.  But, with daily newspaper circulation down more than 30% in recent years, that’s no longer enough.  “This consumer shift to online media makes it imperative….to design a notice program that includes both print and Internet advertising,” explains the American Bankruptcy Institute Journal.

In cases of individual bankruptcy in Indiana, national newspaper notices would be less important than in cases of large corporate bankruptcy, of course.  Direct mailings to the list of creditors would go out from the court, in addition to notices in local newspapers, both hard copy and websites.  Even though, of the tens of thousands of cases in which I’ve been the attorney offering Indiana bankruptcy services, creditors rarely show up for the Creditors’ Meeting, they still need to be “invited”.

Anything else just wouldn’t be fair, and, after all, fairness to all the parties involved is what Indiana bankruptcy is all about!

Readers of both genders have been commenting on these Bankruptcy in Indiana articles..  But the fact is, the majority of clients who seek the help of the debt consolidation lawyers in the Zuckerberg bankruptcy law offices are female. That’s due to no special effort on our part to attract women, but to hard statistics:  In each recent year, more than one million women in our country have found themselves in bankruptcy court.

The Journal of Financial Planning, one of the many professional journals I read in order to offer readers and clients the most up-to-date Indiana bankruptcy information, comments on that statistic, titling an entire article “Women Hit Hardest by Life Crises.”  An AARP study agreed: :”After a crisis”, it found, “women struggled more than men.”

Over my more than twenty-five years offering Indiana bankruptcy help, I’ve worked with women from every walk of life – single, married, divorced, homemakers, career women, entrepreneurs, young and old. My experience is congruent with what I hear from the Anderson, Bloomington, Indianapolis, and Columbus bankruptcy lawyers – a large number of our women clients who file personal bankruptcy in Indiana either had already gone through a divorce or were dealing with an upcoming divorce.  Statistics show that fewer than half of single moms receive all the child support they were awarded in divorce court.

The Woodstock Institution researched the bankruptcy situation in Cook County, Illinois, concluding that “women make up a larger share of individual bankruptcy filers in all communities…than men do.”  In fact, they found that “of all bankruptcy cases in Cook Country between 2006 and 2010, 45% were filed by women-headed households, while only 31.8% were filed by male-headed households.

Often I find myself working with a single mom who needs payday loan debt help, student loan debt help, or both.  Or, there might be a female entrepreneur forced into small business bankruptcy in Indiana after her divorce.  Quite often, I’m called upon to help stop foreclosure, so that children won’t need to change school districts.

Whatever the situation, I know that careful Indiana bankruptcy planning results in better outcomes.  And, really, that’s the whole idea behind the help we offer – making sure the outcome is the best it can be in each situation – most especially when there are children!