Indiana residents, does your debt stretch all the way from Indianapolis to Fort Wayne? Do you wish that you didn’t have enough credit card and medical bills piled up to pave the entire length of the Indianapolis 500 track?
Thankfully, relief is in sight in the form of a Chapter 7 bankruptcy. Also known as a liquid or straight bankruptcy, Chapter 7 erases nearly all of your debts. You’ll never have to dodge creditors or worry about going off the grid to avoid wage or bank account garnishments again.
Filing Chapter 7 is Simpler than Watching a Race Car Zoom around the Indy 500
In order to file a Chapter 7 bankruptcy, you’ll need a bankruptcy attorney. These bankruptcy lawyers specialize in bankruptcy cases and are prepared to work with you every step of the way – from the first time you walk into his or her office until your Chapter 7 petition is approved and discharged successfully by the courts.
A bankruptcy attorney helps you fill out your Chapter 7 petition, files it with the court system and will be by your side when you meet with the judge and trustee (who is there on behalf of your creditors). Your bankruptcy attorney will also deal with your debt collectors, since it is illegal for them to contact you once your Chapter 7 petition has been filed.
The first time that you meet with your bankruptcy attorney, you’ll need to bring along the following documents:
- A list of your debts. Whether they qualify for dismissal or not, you’ll need a list of all creditors. In some cases, you may also need past statements and other information.
- Your last six month’s worth or paystubs.
- Last year’s filed tax return (and your spouse’s return, as well)
Want to Know if Your Income Qualifies You for a Chapter 7 Bankruptcy?
After looking over your income statements and other documents, your bankruptcy attorney will be able to determine if you qualify for a Chapter 7 bankruptcy. There are specific income requirements that Indiana residents must meet. Please note that these amounts can change annually depending on various economic factors. They are as follows:
Family Size:
- 1 person – $40,135
- 2 people – $51,104
- 3 people – $59,028
- 4 people – $69,226
- More than 4 people: Debtors must add $7,500 per family member to the income level for families over 4 members.
If you make more than the income limits, you may still be able to file for a Chapter 7 bankruptcy. Your attorney will use the means test, which was created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The means test looks at the amount of debt that you have and uses a mathematical process to determine if your debt load is excessive for your income. If you debts are extremely large, you’ll be able to file for a Chapter 7 bankruptcy, if not, you will have to go with a Chapter 13.
Wondering Which Debts Are Erased?
A Chapter 7 bankruptcy is a wonderful thing. You won’t have to spend your days hiding from debt collectors and constantly checking your bank accounts, wondering when or if your money will be garnished. You’ll be able to breathe easily again and will be less stressed. There is one little catch though – a few of your debts may not be erased. Some of them, like the following, will still exist:
- Student loans
- Recently filed tax debts
- Liens
- Alimony
- Child Support
However, the most common debts like medical bills, credit card bills and pretty much everything else are covered by a Chapter 7 bankruptcy. They will vanish without a trace once your bankruptcy petition is approved, leaving you able to enjoy your life again.
Bankruptcy Chapter 7 Exemptions
If you are still hesitant about filing for bankruptcy, Chapter 7 or any other Chapter, realize that you will still be able to keep much of your property. The Bankruptcy Reform Act allows all debtors to keep a certain amount of property and assets. The amount and type of assets you are allowed to keep depends on the state you live in. For residents living in Indiana, you are eligible to keep the following:
- Home exemption: Up to $17,600 in a primary residence or personal property is exempt from bankruptcy.
- Other Real Estate: Up to $9,350 is exempt for other real estate properties held in addition to a primary residence.
- Personal property: Up to $350
- Wages: 75% of your wages are exempt (not including taxes)
- Benefits for the following employees are 100% exempt:
- Police
- Firefighters
- Public employees
- Teachers
- Death benefits for public safety officers
- Federal civil service employees
- Other benefits exempt include:
- 100% FEMA benefits
- 100% Military Survivor Benefit Plan annuities
- 100% Worker’s compensation
- 100% Unemployment compensation
- 100% Fraternal Benefit Society benefits
- 100% Social security benefits
- Miscellaneous exemptions:
- 100% Group life insurance proceeds
- 100% Life insurance proceeds
- 100% spendthrift trusts
- 100% surviving spouse allowance
- 100% Health savings accounts
- 100% Education savings accounts
- 100% Property of public housing authorities
Other exemptions may be available to you depending on your circumstances. The amounts of these exemptions can change from year to year. It is important to talk a qualified bankruptcy attorney about what exemptions apply specifically to your Chapter 7 case. Even if you qualify for a Chapter 13, some of these exemptions may allow you to withhold more property.
Get your life back on the fast track. Talk to a Chapter 7 bankruptcy attorney today about your financial situation. With the right legal help, you can get rid of your debt and enjoy the life you deserve to live.
Indiana Bankruptcy Courts
Federal Building
101 NW Martin Luther King, Jr. Boulevard, 3rd Floor
Evansville, Indiana 47708-1951
Phone: (812) 434-6470
E. Ross Adair Federal Building and
United States Courthouse
1300 South Harrison Street, 1st Floor
Fort Wayne, Indiana 46802
Phone: (260) 420-5100
United States Courthouse
5400 Federal Plaza, Suite 2200
Hammond, Indiana 46320
Phone: (219) 852-3480
Birch Bayh Federal Building and
United States Courthouse
46 East Ohio Street, Room 116
Indianapolis, Indiana 46204
Phone: (317) 229-3800
Charles A. Halleck Federal Building
230 North Fourth Street, Room 105
LaFayette, Indiana 47901
Phone: (765) 420-6300
Lee H. Hamilton Federal Building and United States Courthouse
121 West Spring Street, 1st Floor
New Albany, Indiana 47150
Phone: (812) 542-4540
United States Courthouse
921 Ohio Street, Room 110
Terre Haute, Indiana 47807
(812) 231-1850