If you are considering filing for bankruptcy, there are certain things you need to consider and have ready before filing. You will also have questions about what type of bankruptcy to file and how long it will take. Bankruptcy law is federal law, so it will be the same procedure to file bankruptcy in Indiana as in any other state, with some differences in the local rules for each court as far as deadlines and filing procedures. If you are considering filing for either Chapter 7 or Chapter 13 in Indiana, you should certainly consult with an experienced Indiana bankruptcy attorney who can evaluate your circumstances and make recommendations on how to proceed. Read on to learn more about what you can expect and what you should have prepared prior to filing for bankruptcy in Indiana.
Do I Qualify for Bankruptcy in Indiana?
To qualify for bankruptcy in any state, a few questions must be answered. The first question is, what kind of bankruptcy do you want to file? The most common is a Chapter 7 bankruptcy, which is a total dissolution of all eligible debts. Chapter 7 is also the simplest type of bankruptcy as far as bankruptcy go. Another kind of bankruptcy is a Chapter 13 bankruptcy, where you agree to a five-year repayment plan for your debt, which a trustee oversees.
Qualifying for a Chapter 7 Bankruptcy:
To qualify for a Indiana Chapter 7 bankruptcy, you cannot have filed for a Chapter 7 in the 180 days preceding your filings. If you filed and did not show up for court or disregarded the process in some other way, you cannot file. However, after 180 days, you will be eligible to file again.
You must pass what is called a "means test." The means test will compare your income to your debts and dictate if you qualify for a Chapter 7 filing. If you make too much money and have too little debt for Chapter 7, you can still do Chapter 13. Many higher-income earners use this method to prevent foreclosure, as the Chapter 13 plan will allow them to get back on track with mortgage payments in a controlled setting.
Qualifying for Chapter 13 Bankruptcy:
To qualify for Indiana Chapter 13 bankruptcy, you need to be a person or a business entity with less than $2,750,000 in debt when filing for bankruptcy relief. It does not matter if you are self-employed or if that is a personal debt. It just has to fall below that number. If you fall below that number, you are qualified to file. Remember, though Chapter 13 is not a complete dissolution of your debt, it is reorganizing that debt, making payment more manageable for you.
Indiana Bankruptcy Checklist
So what should you have handy if you want to file for bankruptcy? Here are the top documents and information you should have available prior to starting the filing process:
-the most recent bills and settlement offers from creditors, you must get every single creditor, or that debt might not be added to your list of creditors included in your bankruptcy filing
-your bank statements, the last six months would be ideal
-a list of assets, what do you own, and what are you paying off? Title or mortgage for your home
-a list of any student loans you have, federal student loans are non-dischargeable, but private student loans may be forgiven
-any invoices for purchases made in the last year, especially anything big over $1000
-any receipts you have saved
-a copy of any documents from any pending or recently closed lawsuit. An example would be a creditor who took you to court and got a money judgment against you. You may be able to include that judgment in your bankruptcy.
How Long Does Bankruptcy Take in Indiana?
Bankruptcy can vary as to how much time it takes. Sometimes things can get slowed down if the courts are busy. Other times a creditor can object to the discharge of a debt and decide to file what is knoswn as an adversary proceeding against you. An adversary proceeding is like a side lawsuit where the creditor will argue why the debt should not be discharged, and you and your attorney will fight it. You will not see many adversary proceedings in simple Chapter 7 bankruptcies. Still, the other types of bankruptcy will have them, sometimes often if it is related to a business filing for bankruptcy. Never assume that you can discharge a money judgment entered against you by a court of law in bankruptcy; the creditor will likely choose to fight for the money a second time in court since they won the first time.
Chapter 13 will take five years to be completed because once Chapter 13 is granted, you will be on a five-year repayment plan. Chapter 7 usually makes its way through the court system in four to six months, depending on how quickly you complete required tasks (like taking a credit counseling class) and provide your attorney with the required information to file the petition and schedules. Furthermore, it will take time for all of your creditors to know that the debt has been discharged. However, an initial notice is sent out to every creditor you list once you file for bankruptcy, letting them know there is a stay on all collection activity.
The events leading up to the decision to file for bankruptcy can be very difficult, emotionally and financially. You should understand that there is no need to take this on yourself. A lot of the time, people just get in over their heads or have to deal with unexpected medical expenses that put them over the edge financially. The Bankruptcy code is written to talk about providing people with the opportunity for a "fresh start," and you have the same right to it as anyone else. If you are considering filing for bankruptcy in Indiana and are wondering where to begin, feel free to give O'Flaherty Law a call, we would be happy to help you.
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