Indiana Bankruptcy Laws should be known by every resident of the state of Indiana. For debtors swamped with staggering credit card bills and delayed mortgage payments, the only solution they might avail of is bankruptcy declaration. However, filing for bankruptcy protection is not an easy way out of your debts as some believe. Federal law changes in 2005 brought on stricter requirements that have been imposed to screen potential bankruptcy applicants. Since the state follows federal laws, Indiana bankruptcy laws are also subject to these changes.
It is always important to know the basics of bankruptcy laws. Whether you want to hire a lawyer or not is your prerogative. Just make sure that when you will not employ legal services during bankruptcy petition, you know all the intricacies of the whole system. One of the first things you should know is what kind of bankruptcy protection you want. Are you willing to lose assets or do you want to hold on to every property you have? Do you want to totally diminish all your debts at one time or do you want to pay it gradually?
When you opt to choose Chapter 7, you will be given a fresh start. This is the most popular bankruptcy protection program availed by most debtors. A trustee randomly selected by the court to handle your case will take hold of your assets and sell it in exchange for liquidating qualified bills like credit card and mortgage payments. A series of evaluations will be conducted by the trustee to prove that you are really deserving of bankruptcy protection. The annualized monthly income earned by a debtor will be compared with the state’s median income level. The debtor’s income should be lower than the median income set by the US Census Bureau, or if not, you have to prove that you don’t have sufficient dispensable cash to pay the creditor.
Applying for Chapter 13 is also an alternative if you do not qualify for the first bankruptcy program or if you do not want to lose a newly purchased house or car. This bankruptcy protection is also known as restructuring settlement. It is the responsibility of the debtor to come up with a repayment plan. This should be proposed in court and warrant its approval to be implemented. The plan’s supervision will be delegated to the trustee. The debtor will give the monthly payments to the trustee who will remit the payments to the creditors according to the priority set by the court. This plan is implemented for 3 to 5 years until the debts you owe are totally paid. The court will grant an automatic stay for creditors to stop them from taking legal action.
If you have decided to not employ an attorney’s services, there are some things you should learn about exemptions. These are assets protected from the creditors. The federal laws specify some assets that are exempted. However, you can also opt to choose exemptions specified by the state of Indiana. These exemptions include:
• The house you live in worth $15,000;
• Real property worth up to $8,000;
• Any intangible property value of up to $300;
• 75% of unpaid but earned wages; and
• Other benefits like health insurance, accident policy proceeds, retirement plan, and pensions.
Whether you choose Chapter 7 or Chapter 13, you still need to do a lot of paperwork. Plus, before filing the necessary paperwork, Indiana bankruptcy laws mandate a complete credit counseling program accredited by the court to be sure that bankruptcy protection is really for you.