Ch 7

Law Offices of Brad A. Woolley

Lafayette, Indiana Bankruptcy Attorney Helping You File Chapter 7 and Chapter 13 Bankruptcy

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  • Priority Debts in Chapter 13 Bankruptcy

    Chapter 13 can be a stronger and more flexible tool for dealing with priority debts than Chapter 7. The last blog explained how sometimes Chapter 7 can be a good tool to pay or reduce your priority...
  • 6 Ways Chapter 13 Bankruptcy Can Save Your House

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Indiana Chapter 7 Bankruptcy

Sometimes circumstances beyond your control force you to suffer financial losses due to a recent job loss, reduction of income, illness or injury, death or other issues. When this happens, it seems the stress and anxiety of how to pay the bills is overwhelming. To further compound the stress, the bill collectors will call you with demand for payment and threaten you with garnishment, foreclosure or repossession. Bankruptcy is here to assist you.


What is Chapter 7 Bankruptcy ?

Chapter 7 Bankruptcy

A chapter 7 bankruptcy can do the following:

  1. Provide a debtor with peace of mind and protection from collectors 
  2. Stop creditor harassment and intimidation 
  3. Stop garnishments of wages 
  4. Stop lawsuits 
  5. Stop foreclosure temporarily to allow possible workouts 
  6. Stop a wage levy by the IRS or Indiana Department of Revenue

Chapter 7 is the bankruptcy that most people file. It is commonly used to discharge (get rid of) unsecured debts like:

  • credit cards
  • medical bills
  • unsecured personal loans
  • judgments
  • garnishments
  • repossession
  • bad mortgages and foreclosures
  • certain taxes owed to IRS or State of Indiana
  • and other debts.

Full disclosure and the listing in your bankruptcy of all of your bills is mandatory by law. You are required to sign the Bankruptcy documents under penalty of perjury and you are required to testify under oath at a Meeting of Creditors hearing that the documents truthfully and accurately show all of your debts and all of your assets.

There are certain debts that are non-dischargeable in chapter 7 and you should be sure to discuss all of your debts with your attorney. The following types of debts may not be discharged in bankruptcy and should be disclosed to your attorney prior to filing:

  • debts owed to ex-spouses for alimony and child support
  • debts due to driving the under the influence
  • debts based upon fraud or misrepresentation
  • certain types of taxes
  • court ordered fines
  • student loans (except in extreme cases)
  • purchases of luxury goods within 90 days of filing bankruptcy
  • recent cash advances on credit cards
  • and other items

How Do You File For Bankruptcy In Indiana?

How Do You File For Bankruptcy In Indiana?

How you file for bankruptcy in Indiana requires you to have a good bankruptcy attorney. There are several things that need to be done in order to file a bankruptcy. First and foremost, it is not necessary to hire an attorney to file bankruptcy but it is highly recommended. Having said that, this is generally the process for filing bankruptcy with a lawyer:

  1. Meet with an attorney and sign an employment contract
  2. Provide the required information to your attorney so that your bankruptcy petition can be typed and prepared correctly
  3. Do not forget to list all of your creditors
  4. Pay the required attorney fees and filing fees to get the case filed
  5. Participate in a required pre-filing credit counseling session prior to the bankruptcy being filed and provide your attorney with a certificate of completion
  6. Review and sign your bankruptcy petition for filing (Note that your bankruptcy cannot be filed without your signatures)
  7. The Bankruptcy documents are electronically filed with the United States Bankruptcy Court and you are assigned a case number
  8. Immediately upon the case being filed, an automatic stay under Section 362 of the Bankruptcy Code goes into effect that prohibits your creditors from continuing to harass you or attempt to collect money from you
  9. Once the case is filed, you are assigned a Chapter 7 Trustee who is responsible for reviewing your bankruptcy documents and conducting your bankruptcy meeting of creditors to determine if there are assets to administer for your creditors
  10. You should stay current with all of the debts you intend to keep
  11. Within 30 days of the case being filed, you should attend the Financial Management Course for people who file bankruptcy
  12. Attend the Meeting of Creditors hearing usually scheduled around 30 days after your case is filed
  13. Execute any reaffirmation agreement needing to be filed
  14. In most cases, the discharge order is granted about 65 days after the 341 hearing.
  15. Court issues an Order Closing case about 70 days after the case is set for the 341 Meeting of Creditors

What Not To Do If Filing Bankruptcy In Indiana

What Not To Do If Filing Bankruptcy In Indiana

  1. Not consulting with an experienced bankruptcy lawyer or attorney prior to filing
  2. Filing bankruptcy when you don’t need to and using your bankruptcy discharge too early,
  3. Selling assets that you would not lose if you filed bankruptcy
  4. Refinancing your house so you can’t afford it in a few years,
  5. Taking a loan against your 401(k),
  6. Using your credit cards for cash advances or balance transfers within a few months of needing to file bankruptcy,
  7. Obtaining payday loans,
  8. Numerous other mistakes.

Will Filing A Bankruptcy Stop A Wage Garnishment In Indiana?

Will Filing A Bankruptcy Stop A Wage Garnishment In Indiana?

The filing of a Bankruptcy in Indiana will stop a wage garnishment even if it is a chapter 7 or chapter 13 bankruptcy. Once the bankruptcy petition is filed with the bankruptcy court, the bankruptcy code gives you an automatic stay of all civil collection matters against you. A criminal case or current child support proceedings will not be stopped in most cases. The following is the typical scenario:

You are contacted by your payroll department that a wage garnishment will take effect next payday and you will lose 25% of your net check. There is no way that you can pay your monthly rent, house or other living obligations losing that much of your check. You contact a bankruptcy attorney and decide to file bankruptcy. Your payroll is cut by your employer on Tuesday and payday is Friday. Will the wage garnishment be stopped in time? You will need to have the case filed before Tuesday to even have a chance at stopping the wage garnishment. Once the case is filed, your attorney can send the appropriate paperwork to your payroll department to stop the wage garnishment and get you your entire paycheck. In order for this to happen, your attorney and you need to work together to get the required results.

If you are facing a current or pending wage garnishment in Indiana, contact the Law Offices of Brad A. Woolley for an appointment to get your paycheck back!

Will I Lose My House And Car If I File Bankruptcy In Indiana?

Will I Lose My House And Car If I File Bankruptcy In Indiana?

In most cases, you will not lose your house or auto as long as you remain current with the payments to the lienholder. In Indiana, a person filing bankruptcy must show all of his or her personal property and its value. Our state opted out of claiming federal exemptions and Indiana laws control in almost every situation. The general rule is that each bankruptcy filer is entitled to have $9,350 of non-encumbered property and $17,600 of equity in his/her home. In most joint cases, that means $18,700 of personal property and $35,200 of home equity in their residence.

In the event you have not lived in Indiana during the majority of the 2 years prior to filing bankruptcy, you may have to use the exemptions allowed by the state where you used to reside. Therefore, it is imperative that you advise your attorney of all residences you have had in the last 3 years pursuant to question 15 of the Statement of Financial Affairs.

Indiana Bankruptcy and Will I Lose My Tax Refund If I File Bankruptcy?

Indiana Bankruptcy and Will I Lose My Tax Refund If I File Bankruptcy?

In a chapter 7 bankruptcy, your tax refund can be taken from you if you are not careful. It is imperative that you consult with an experienced attorney about this matter.

Under Indiana law, the bankruptcy trustee cannot take your earned income credit (EIC) for the benefit of your creditors but it must be properly claimed exempt in your bankruptcy schedules. The trustee can take your additional child tax credit and the federal and state income taxes that your employer deducted from your paycheck.

The month you file for bankruptcy will determine the level of interest a bankruptcy trustee has in taking your tax refund.

For A Free Bankruptcy Initial Consultation Call

(765) 420-8900 or 1-800-756-0711

OR CLICK HERE TO EMAIL BRAD