Filing Chapter 13 in Indiana

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Consumers in Indiana can file for either Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy is a liquidation proceeding and some of the debtor's assets are sold by the bankruptcy trustee to repay a portion of the debtor's debt. In most Chapter 7 bankruptcy cases in Indiana, a debtor receives a bankruptcy discharge within six months of filing for bankruptcy. However, if the debtor does not qualify for Chapter 7 bankruptcy or if the debtor would like to keep her assets, it may be a good idea for the debtor to consider filing for Chapter 13 in Indiana.

In a Chapter 13 plan, the debtor continues to pay off debts under an installment payment plan, or repayment plan, administered by the bankruptcy trustee. Another benefit of filing for Chapter 13 bankruptcy in Indiana is that the debtor is able to keep his assets while he completes his repayment plan.

Filing for Chapter 13 Bankruptcy in Indiana

To be eligible to file for Chapter 13 in Indiana, the debtor must have regular income for a minimum of six months before the debtor files for Chapter 13 bankruptcy. The income can come from any source including a pension, retirement benefits or spousal support. Based on the debtor’s income and monthly expenses, the debtor will work with a bankruptcy attorney to create an installment plan the debtor can afford.

The debtor must submit the proposed repayment plan within 15 days of filing the bankruptcy petition. Unlike Chapter 7 bankruptcy, filing for Chapter 13 bankruptcy does not result in an immediate discharge, but the debtor develops a three to five year repayment plan to discharge most of the debtor’s unsecured debt within that time frame. The debtor must receive an approval of his repayment plan at the confirmation hearing. The debtor’s creditors are also invited to attend the confirmation hearing and may object to all or part of the debtor’s plan. After the approval of the debtor’s plan, the debtor immediately begins to make payments to the Chapter 13 bankruptcy trustee.

Chapter 13 Repayment Plan

In a Chapter 13 repayment plan in Indiana, the debtor pays all monthly payments to the debtor's creditors through the Chapter 13 bankruptcy trustee. The debtor makes a lump sum payment each month, and the bankruptcy trustee then disperses the funds to the debtor’s creditors. It is the bankruptcy trustee’s job to ensure the debtor makes all monthly payments to the bankruptcy trustee in full and on time each month.

If the debtor misses a payment, the bankruptcy trustee can recommend to the bankruptcy court that the debtor’s bankruptcy case be dismissed. However, if the debtor completes the installment plan, the debtor will receive a bankruptcy discharge of all unsecured debt included in the bankruptcy plan.

Getting Legal Help

If you are thinking about filing Chapter 13 in Indiana, contact an experienced bankruptcy attorney. An attorney will evaluate your financial situation and help you decide whether filing for bankruptcy is right for you.