Bankruptcy

Is exclusively for family farmers, and has some rules that take account of the economic realities that farmers live with. 

If you don’t qualify for Chapter 7, if you need to avoid foreclosure on your home, if you have certain debts that are not dischargeable in Chapter 7 (such as intentional damages or divorce debt), or if you want to pay back your debt, Chapter 13 bankruptcy is a 5-year repayment plan. This process will stop all garnishments and lawsuits against you, whether you are able to pay back 100%, 50%, or 5% (or if anything in between) of your total debt.

A simple answer is not possible. I have an information packet for potential clients to fill out, after which I meet with you, clarify the details of your situation, and recommend what your options are.  

Once I know sufficient details and understand which way you want to go, I will quote you a minimum retainer, or a larger set fee if that is your preference. If you don’t like either option, you will likely owe nothing, and got a free analysis of your situation. Your options begin as low as $400 depending on your situation and what you want me to do, but more complicated situations will easily exceed $1,000. There is a $335 filing fee that goes to the Bankruptcy Court for a Chapter 7, and a $310 for a Chapter 13.

The right to file bankruptcy has been in the U.S. Constitution since it was first written in 1787.

Indiana allows each person filing bankruptcy to protect (or exempt) $17,600 equity in a residence ($35,200 for a married couple), $9,350 in other property ($18,700.00 total for a married couple), any amounts in IRS qualified retirement accounts, as well as some medical devices. But you can only protect $400 worth of cash or money assets.

Houses, vehicles, furniture etc. are included. If you want to keep paying for your home, car, furniture, etc. and you do not have equity exceeding the limits indicated above, you can usually “reaffirm” these debts and keep the property. You cannot force a creditor to reaffirm, but most creditors are quite willing to do so (if you are current on your payments), as secured creditors always retain the ability to repossess the property and pursue you for the balance if you don’t make future payments. 

These are recent taxes, child support, government insured student loans, debts from a divorce, recent wages owed to an employee, and several other unusual types of debt, are not dischargeable in bankruptcy and you still owe them after the bankruptcy is over.

This is usually a minimum of 90 days from the time you file, if no creditor or court problems occur. About 30 days after you file your bankruptcy petition you will have to go to court to testify about your financial situation, basically saying everything in your bankruptcy petition is true and that you are not about to inherit a bunch of money nor have you won the lottery. If the Bankruptcy Trustee finds yours is a “no asset case” (i.e. that you have no unprotected property that can be sold to pay your bills) then your creditors have 60 days to file an objection to your bankruptcy. A creditor’s objection must be based on a claim that you were not truthful, or had no intention of paying when you incurred the debt, or some other violation of bankruptcy rules, not simply that you owe someone money.

Wage garnishments are stopped immediately upon filing bankruptcy, but not child support withholding orders.

Bankruptcy will be on your credit record for 10 years. There is no predetermined legal impact on your ability to borrow money or to buy on credit as a result of filing bankruptcy, but sellers and lenders are certainly free to turn you down for credit. People who have substantial income and a strong employment history will likely get credit, but interest rates are likely to be near the top of the legal limit, unless your financial situation (property and income) greatly improves. Higher interest rates on your biggest purchases (home loans, vehicle loans, business loans) will increase your long run costs by several thousand dollars. A reaffirmed mortgage or other secured debt will usually retain the same interest rate, though it can be renegotiated sometimes. So if your overall total unsecured debt is not very high, the long term cost to you of filing bankruptcy may exceed the short term benefit. On the other hand, for most who meet the legal parameters to file bankruptcy, the immediate benefit will outweigh the long term negative impact. 

Filing bankruptcy is a matter of public record, and it is easy enough for almost anyone to find out about, if they really want to, by calling the bankruptcy clerk’s office or checking the bankruptcy court’s website. Local newspapers don’t routinely print bankruptcy filings. The Indianapolis Star has in the past printed an alphabetical listing of all bankruptcies in central Indiana, about once a month, in its Sunday edition.