Legal Question in Bankruptcy in Indiana

Re: Keeping certain things

There are four different kinds of bankruptcy-they are called chapters, the most common for consumers are Ch 7 and Ch 13-each has different rules for allowing debtors to retain certain property.

In a chapter 7, you have three options when deiciding what to do when you have loans secured by collateral such as your car and your home-you can surrender them and walk away from the debt; you can reaffirm if you are current on your payments and insurance9this means you keep paying as if you had not filed BK) or you can redeem these items by paying the fair market value in a lump sum cash payment.

If you have equity in these items, that is they are worth more than you owe, you can still keep them if your equity in your personal property doesnt exceed $4000 ($8000 for married couples) and $7500 in your home($15000 for married couples), but the two may not total more than $10000($20000 for married couples)

In a chapter 13, you may keep your home by continuing to pay the lender if you are current with them, but if you are not, you may pay back the past due amounts over 3-5 years while resuming regular payments. As to your vehicles, you can keep them but you can modify the terms of your loan. The court may allow you to pay back only the fair market value of your car at a reasonable rate of interest-around 6-7% over the 3-5 years you are in Ch 13 while discharging the balance of your loan. However, you must have steady regular income to qualify for Ch 13

Most experienced BK attorneys offer free initial consultations-take advantage of that but make sure the attorney specializes in BK

Good Luck!!

John E Bator

Bator, Redman and Shive P.C.

1-317-685-2426

Re: Keeping certain things

I encourage clients to do as much of their own research into bankruptcy matters as they can stand. The reason you can't get a straight answer about keeping your car and house is because such matters are very fact specific. If you live in Indiana, your exemptions are very limited (not more than $10,000 equity on your house, for example, while other states permit unlimited equity in a home; these are states, like Texas and Florida, which are home to a lot of rich deadbeats.) Often, for Indiana residents with substantial equity, a Chapter 13 plan can be devised which protects your assets while providing an affordable plan to deal with creditors. You should gather the money you need to retain an attorney, then cheerfully pay for professional services.

Re: Keeping certain things

Under either a Chapter 7 or a Chapter 13, you can choose which items you want to keep and continue to pay on, such as autos and your home. This is called reaffirmation.

In Indiana, you can file jointly, as a married couple, or separately. Assets that you are allowed to keep in a chapter 7 bankruptcy, which is the way most folks go: $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.

The whole process from filing to discharge takes about four months.

Hope you find this information to be helpful.