In Indiana, individuals may file Chapter 7 bankruptcy, if they need a fresh start. While assets may be lost, it can remove a load of debt that seems to grow heavier by the minute. Alternatively, people who want to keep their assets, and continue to pay their way, may consider Chapter 13 bankruptcy. With a restructured payment plan, they can emerge from debt and move forward.
Indiana Bankruptcy Topics
- Personal Bankruptcy Options
- Keep Your Home: Bankruptcy and Foreclosure
- Indiana Exemptions to Bankruptcy Liquidation
- Options for Filing Bankruptcy
- Local Bankruptcy Courts and Trustees
Under the bankruptcy code, residents of Indiana can file Chapter 7 and Chapter 13 bankruptcy.
- Chapter 7 Bankruptcy - As unemployment continues to rise, many people have lost their jobs. Thus, it is a hardship just to pay for groceries. When there are no other options, chapter 7 bankruptcy can give these people a clean slate and a chance to start again. A fresh start is the only way they can even consider going on, and trying to improve their current circumstances. However, no matter how poor they are, debtors cannot escape certain financial obligations, and there are income limitations. The median income for a single person is $41,697, a family of two is $53,169, and a three-person household is $61,164.
- Chapter 13 Bankruptcy - Chapter 13 is designed for individuals who have assets they do not want to lose. Maybe an income-earner had to take a lesser paying job. Maybe a serious illness has added medical bills to the already-tight budget. For whatever reason, they still want to retain their assets and pay the bills. But, they need a helping hand to keep their financial heads above water. To qualify for Chapter 13 bankruptcy, the debtor may not have more than $1,010,650 in secured debt and a maximum amount of $336,900 in unsecured debt. (See more on Filing Chapter 13 in Indiana).
Filing bankruptcy during foreclosure serves one purpose. It halts creditors from any type of harassment to pay the bills. However, if the process has already begun, the lien holder can request the stay be lifted, so they can go ahead and sell the house, in an effort to recoup their losses. It would be much better not to wait until it gets that far. As soon as a debtor starts to get behind in paying bills, and cannot see any significant improvement coming, it is time to consult a bankruptcy lawyer.
In Indiana, debtors can claim certain exemptions from a list of assets that the court cannot include in any bankruptcy proceeding. The list includes, but it not limited to, the following:
Type of Asset(s)
Details on Applicable Exemption(s)
Real and personal property not worth more than $7500. Health aids cannot exceed $10,000. Tenancy property is exempt, if debts are only incurred by one spouse
Group life insurance, fraternity and society benefits, life insurance proceeds for a dependent or spouse, proceeds for accident or mutual life insurance
If in a business partnership, the property is exempt.
Firefighters, police or sheriff’s officer accrued benefits, public employees, retirement benefits, state teachers
Crime victims benefits-minus the bills for treatment of any crime injury, unemployment and workmen’s comp
Tools of Trade
Uniforms, arms and equipment needed for a job
$4000 of any real or personal property
- Use a Bankruptcy Lawyer - A bankruptcy lawyer can keep the debtor from accidentally forgetting something and being charged with fraud. He/she can also answer a myriad of legal questions that will naturally come up during the bankruptcy process. A lawyer looks out for the interests of the debtor, and knows all of the legal nuances that can make a difference in the outcome of the case.
- Use a Filing Service - In an effort to save money, many debtors opt to use a filing service. Unfortunately, it is not recommended. Any mistakes may cost more than hiring a legal professional. The service only files the paperwork; and they are not responsible for missing documents. In addition, they cannot represent the debtor in court or answer any legal questions.
- File “Pro Se” - For debtors who want to be self-representative, they can file pro se. However, unless they have a deep understanding of Indiana bankruptcy law, it can be a financially fatal mistake. Legal nuances that the average nonprofessional cannot know may make a huge difference in the outcome of the case. It is worth borrowing the money to hire a lawyer.
Indiana Northern District Court
102 Robert A. Grant Federal Bldg
and United States Courthouse
204 South Main Street
South Bend, IN 46601
Indiana Southern District Court
105 Birch Bayh Federal Bldg and
United States Courthouse
46 East Ohio Street
Indianapolis, IN 46204