Legal Question in Bankruptcy in Indiana

Re: Is Bankruptcy right 4 my situation?

Your situation sounds absolutely awful. I cannot imagine the pain you have been through.

If you want to keep the house, you must get the mortgage arrearage caught up, whether you file for bankruptcy or not.

If you DO file for bankruptcy protection, you can get rid of your other debts, such as medical bills and credit cards, and you will be able to buy yourselves a few months (during the automatic stay that goes into place during the bankruptcy proceedings) to get caught up on the arrearage. Once that is done, then you can reaffirm on the loan.

Here is some basic information that might help you make your decision:

In Indiana, you can file jointly, as a married couple, or separately. Assets that you are allowed to keep: $7,500 in home equity (double that, if filing jointly) $4,000 in personal property, which includes equity in your vehicle(s) (double that, if filing jointly). Items that you cannot get discharged in a Chapter 7 bankruptcy include student loans, child support, maintenance to a former spouse, most taxes and damages in a drunken driving accident. Pretty much everything else is fair game for discharge.

The most common reasons that people file for bankruptcy protection are: 1. Job loss/business closure or downsizing. 2. Major uninsured medical bills. 3. Divorce. There is no limit to the amount of bills or debts that you can get discharged. You just have to show that your income vs. your bills won't provide you with a way to make meaningful progress on paying off your debts. You can choose which items you want to keep and continue to pay on, such as autos and your home. This is called reaffirmation. The whole process from filing to discharge takes about four months.

The first step is getting copies of your credit reports.

To get copies of your credit reports, contact the three major bureaus at their toll-free numbers below:

Equifax 1-800-685-1111

Experian 1-888-397-3742

Trans Union 1-800-916-8800

It takes about 10 days for the reports to arrive, and the cost is about $9 apiece.

I hope you find this information to be helpful. Best of luck to you.

Re: Is Bankruptcy right 4 my situation?

I am very sorry for your loss.

I read Ms. Philpot's response, which is full of good information.

I would add this: if you are now able to begin to pay down the arrearage, the three months-worth that you are behind, it might be a good idea to ask the mortgage company again to give you six months or so to pay back the arrearage. You need to be able to pay the current mortgage and a portion of the arrearage. It is a sorry fact that financial institutions don't care very much about your problems. But they do respect your power. So make sure they know you have consulted attorneys, tell them what you can do so far as repayment is concerned, and tell them if they are not able to accept that, then you will file a Chapter 13 bankruptcy and force them to accept it. If you could afford to spend the money on an attorney letter before filing for bankruptcy, that would probably be money well spent.

As far as your big question is concerned - is bankruptcy right for your situation - that can't be answered without a lot more detail, which would require a consultation in person. Contact your county bar association to see if they have a referral service that you can use to find an attorney.

Good luck in your recovery from this disaster.