Indianapolis Chapter 7 Bankruptcy Lawyer
There is oftentimes a negative connotation attached to the term “bankruptcy.” Generally, no one wants to be known as someone that has gone “bankrupt.” In reality, the concept of bankruptcy should be viewed as a tool to help a person or business get back on their feet financially. Sometimes, there are unforeseen and uncontrollable life events that can send finances spiraling out of control. It can happen to anyone, and has happened to people for years.
The Bankruptcy Code, enacted by Congress in 1978, is the federal law that controls bankruptcy proceedings in the United States. Consumer bankruptcy is a process that helps individuals liquidate assets to pay off their debts. Specifically, Chapter 7 and Chapter 13 apply to individuals (rather than businesses), and help people resolve debts in order to get a fresh start financially.
What is Chapter 7 Bankruptcy?
A Chapter 7 bankruptcy allows consumers to discharge debts completely. Filing for Chapter 7 bankruptcy is often the appropriate strategy for individuals that don’t own many assets but have overwhelming unsecured debt that they are unable to manage. Common examples of unsecured debts include credit card bills, medical bills, and payday loans.
The first step before an individual can file for bankruptcy in general is they must take a credit counseling class within six before they file. A list of federally approved credit counseling agencies can be found here. The class may be completed online and once completed, individuals will receive a certificate of completion. This certificate must be kept on hand and provided to your attorney as the US Trustee will require the proof before filing.
Am I eligible to File for Chapter 7 Bankruptcy?
In Indiana, a person is eligible to file for Chapter 7 bankruptcy based on two general criteria.
First, a person is eligible if they have either never filed for bankruptcy before or haven’t filed for bankruptcy in the last 8 years. If a prior bankruptcy has been filed within 8 years, the individual may still be eligible to file for a Chapter 13 bankruptcy but will no longer qualify for a filing under Chapter 7.
Second, a person is eligible to file bankruptcy under Chapter 7 if their annual household income is under a certain amount. The following is a list of the most up to date annual household income limits for filing Chapter 7 Bankruptcy:
- One-person household: $48,243
- Two-person household: $60,452
- Three-person household: $71,090
- Four-person household: $85,368
*If the household is larger than four people, the amount increases by $8,400 for each additional person living in the home.
If an individual’s household income is more than allowable to file for bankruptcy under Chapter 7, it is still possible to qualify. The Indiana Means Test is an assessment used to determine how much disposable income a person really has, regardless of the annual income brought in by the household. It is extremely important to have an experienced attorney to help navigate the Means Test in order to maximize its effect on qualifying for a Chapter 7 bankruptcy filing as there are various factors used to decide if a filer qualifies.
If I file for Chapter 7 Bankruptcy, will I get to keep my property?
When an individual files for Chapter 7 bankruptcy, they are asking the court to look at their possessions and determine if anything can be sold to repay debts. However, Indiana law allows the debtor to take several exemptions. These exemption laws may allow individuals to keep their homes, vehicles, and much if not all of their personal property. Retirement benefits (401k, 403(b), pensions, etc.) are completely protected. Additionally, social security benefits are completely protected and cannot be seized by the creditors. Items that are not typically exempted include other investments, vacation homes, and other personal property that could be sold for value.
However, it should be noted the homes are not always kept. The housing exemption depends on if payments on your mortgage are up-to-date along with the amount of equity you currently have in your home. The same goes for most vehicles. If you own your car outright without any more payments needing to be being made, it would depend on the vehicle’s value and if it is within the Indiana exemption limit.
Most people that are eligible for Chapter 7 bankruptcy, and that have good legal representation, are able to keep all of their assets while getting rid of their overwhelming credit card debt and medical bills. If properly done, a Chapter 7 Bankruptcy can be the start on the pathway to a new financial beginning. Contact the experienced attorneys at Banks & Brower at 317-870-0019 to set up a free consultation.
How Long Does Chapter 7 Take?
The timeline really is dependent on the filer. As mentioned previously, the filer must complete a credit counseling course before filing. Additionally, they need to get several documents related to their bills and financial information dating back at least six to seven months. There are also various filing and miscellaneous fees that will be needed to file unless the court deems you eligible for fee waiver. These fees generally cost under $400.
Once all bankruptcy forms are filled out and the credit counseling has been taken, your attorney will file the case and begin communication with the US Trustee on your behalf to organize the case and notice creditors. Next a “341” meeting will take place. This meeting is a meeting of the creditors where you, your attorney, the US Trustee, and any creditors you are seeking to discharge will meet to organize the discharge. Before you obtain your discharge but after your case is filed, you will be obligated to take a second credit counseling education course.
Once all of the above steps have been completed, you will receive your discharge. Most cases typically take six months from filing to discharge.
Contact an Indianapolis Chapter 7 Bankruptcy Attorney
To learn more about bankruptcy or how exemptions are applied in Indiana check out one of our other Bankruptcy articles. If you have any additional questions I want to know how bankruptcy would impact you in your particular situation, feel free to contact the Bankruptcy attorneys at Banks & Brower. We offer free consultations and are available 24/7/365 to tend to your needs. Call in at (317) 870-0019 or email us at email@example.com to set up an appointment today.