Indiana Bankruptcy Information
If you plan on filing bankruptcy in Indiana, you need to know the laws as they relate to you in filing an Indiana bankruptcy.
Chapter 7 Bankruptcy in Indiana
Chapter 7 is the most common form of personal bankruptcy that is filed in Indiana. When filing Chapter 7 bankruptcy in Indiana, your non-exempt property is given to a bankruptcy trustee. The trustee then liquidates your property and gives the proceeds to your unsecured creditors. In exchange for this, you are entitled to a discharge of some of your debt.
Chapter 13 Bankruptcy in Indiana
Chapter 13 is your other option for filing personal bankruptcy in Indiana. When filing Chapter 13 bankruptcy, you keep possession and ownership of all of your assets. In exchange, you have to give some portion of your future income to repay your creditors. Usually, this is over a period of three to five years.
Deciding on Chapter 7 or Chapter 13 in Indiana
One of the first decisions that you will have to make is whether to file Chapter 7 bankruptcy or Chapter 13. An Indiana bankruptcy lawyer will help you make this important decision.
Chapter 7 looks much more appealing to most people because they see it as a way to \"wipe out\" all of their debts and make a fresh start. It is the most attractive choice if you are under a heavy burden of debt and are not able to pay it back. However, some of your debt may be non-dischargeable. If you have this kind of debt, you may want to consider filing Chapter 13 bankruptcy in Indiana.
If you have property that you want to keep, Chapter 13 is probably a better option, especially if you are behind on business or mortgage payments. Chapter 13 gives you the opportunity to make up overdue payments over a period of time. It also enables you to reinstate your original mortgage agreement.
If you do not qualify to file Chapter 7, you have to file Chapter 13. The main key to being eligible to file Chapter 7 is your income. If it is below the median of a family your size in Indiana, you can file Chapter 7. You may still be able to file Chapter 7 if your income is above the median for Indiana, but you have to pass the \"Means Test\". This test is to see if you have enough disposable income to pay back at least some of your unsecured debts over a five-year repayment period. If the \"Means Test\" says you have enough disposable income, you have to file Chapter 13.
Federal exemptions are not allowed in Indiana. You can only take the state exemptions allowed by Indiana. An Indiana bankruptcy lawyer can go over these exemptions with you. Your Indiana bankruptcy attorney will also discuss the amounts and limits on these state exemptions.