Legal Question in Bankruptcy in Indiana

Re: bankruptcy

Generally speaking Chapter 7 Bankruptcy discharges all of your unsecured debt and gives you a �fresh start.� Chapter 7 Bankruptcy is often referred to as a straight or normal bankruptcy. In the vast majority of cases, all of the debtor�s property is exempt and the debtor losses nothing. These cases are referred to as �no asset� cases. Ideally, all debtors would want to file under Chapter 7, but there are certain situations where filing a Chapter 13 Bankruptcy would make sense.

Consider filing a Chapter 7 when you have high credit card balances that you can not possible pay; have large medical bills you can not pay; suffering from unemployment or underemployment; are being sued or have civil money judgments against you; your wages are about to be garnished; have debt from a business failure; or are under a lot of stress from creditors

A Chapter 13 Bankruptcy is essentially a court supervised partial payment program, which allows debtors to get caught up on their secured debts (usually mortgage or vehicle) as well as discharge virtually all of their unsecured debt. A Chapter 13 is typically used when the debtor does not qualify for a Chapter 7 or the debtor wants save their home or vehicle from foreclosure or repossession. Under a Chapter 13 Bankruptcy, the debtor submits a Plan of Reorganization setting forth the debtor�s income and expenses. If the court approves it, any excess (if any) is used to pay unsecured creditors. The plan typically last 3 years, but can go as long as 5 years. At the end of the plan all the remaining unsecured debt is discharged, thus providing a similar result as a Chapter 7. Chapter 13 Bankruptcies are more complicated and require far more work that a Chapter 7, so unfortunately they cost more to do.

Consider filing a Chapter 13 when you do not qualify for a Chapter 7 Bankruptcy;are facing a mortgage foreclosure on your home; are facing your vehicle being repossessed; have steady income; had interruption in income and need time to catch up; the value of your property exceeds the exemption amounts under Chapter 7 e.g. too much equity in your home or vehicle; want to pay back as much money as you can to your creditors; or are under a lot of stress