We Work to Eliminate Your Unsecured Debt
Chapter 7 bankruptcy is the most common form of bankruptcy for Indiana consumers. In most cases, Chapter 7 bankruptcy allows you to eliminate all of your unsecured debt (like credit card debt, medical bills, repossession balances, payday loans, etc.) without losing any of your belongings and without any payment plan.
In the majority of consumer Chapter 7 bankruptcy cases, there are no assets taken by the court! You can keep your financed home, cars, furniture, jewelry, and other belongings while eliminating your credit card debt, medical debts, and other unsecured debts. We serve the north-central Indiana region, including the Indy and Lafayette areas. We are here to help. Read more below if you want to know the details about how Chapter 7 bankruptcy works.
There are other exemptions available as well, these are just the most common ones. If you are a married couple that owns these things jointly, the exemption amounts are double. With most of our clients, we are able to exempt all their belongings, so the court doesn’t take any assets.
Qualifying for Chapter 7 Bankruptcy in Indianapolis
Do You Qualify for Indiana Chapter 7 Bankruptcy?
There are three main issues to consider when we determine if you qualify for Chapter 7 Bankruptcy.
This one is easy. If you haven't filed for bankruptcy in the last 8 years, you are ok on this requirement. If you have filed previously, then it will depend on the chapter you filed under the last time. Even if you filed a Chapter 7 recently, you likely still have options under Chapter 13. The attorneys at Perez & Perez Bankruptcy have access to a national database of bankruptcy filings, so we can look up all the details about any prior cases for you to make sure you qualify.
The income tests are more complex. The overall concept is that we have to show that you can't afford to pay any of your unsecured debts back in order to qualify for Chapter 7.
So, to determine this, there are some calculations to complete, primarily the "Means Test". The attorneys at Perez & Perez are experienced and well versed in the body of case-law interpreting the means test and will work hard to ensure that you obtain the best possible result in your case.
In general, if your household income is below the median income for a household of your size, then you will qualify for Chapter 7 with regard to income. Of course, there are always exceptions, so you’ll need a full consultation to be sure. By way of a general idea, the current median incomes in Indiana by household size are as follows (in gross income):
- Household of 1: $46,000
- Household of 2: $59,000
- Household of 3: $69,000
- Household of 4: $79,000
- Then it goes up by $8,400 for each additional person.
If you are above the median, then we'll look at your household expenses as well. In many cases, above median individuals and couples are still eligible for Chapter 7.
Chapter 7 bankruptcy is liquidation. By filing a Chapter 7, you are asking the court to look at everything you own and see if any of it can be sold to pay your creditors. However, most people who file Chapter 7 with proper representation don’t lose any assets. This is because Indiana allows “exemptions” that our attorneys can claim for you. These exemption laws allow us to protect your belongings.
In general, Indiana law allows us to protect your assets up to:
- Home equity (value above and beyond what you owe on the mortgages):$19,300
- Household items, equity in cars, jewelry, other tangible assets: $10,250
- Cash, bank accounts, stocks, money owed to you, other intangible assets: $400
- Retirement accounts like 401(k), 403(b), IRA: 100% protected
- Social Security benefits: 100% protected
Steps to Filing Bankruptcy Chapter 7
If after speaking to one of the attorneys at Perez & Perez Bankruptcy we jointly determine that it is in your best interest to file a Chapter 7, we will get you started with the process to file.
The first step is to retain our firm to represent you in the case. We can advise you on how to deal with creditor calls and collection actions starting on day one. We then set you up on a payment plan for the attorney fees and costs associated with filing your case. Once that's complete, we gather some basic documents from you (like pay stubs, tax returns, etc.) and prepare a rough draft of your petition. We'll then set up a "signing appointment" where we can review those together and update them for filing with the court. Every appointment you have with us will be with a licensed attorney and you will have every opportunity to ask questions. We want you to be completely comfortable that you understand everything about the filing. After the signing appointment, we file the case.
Filing the bankruptcy case with the court gives us an immediate court order stopping all collection actions against you. This is known as the “automatic stay.” As soon as your case is filed, any remaining collection calls, lawsuits, garnishments, or other forms of collection against you must stop immediately!
About 30 days later we'll have a meeting with the Trustee that is assigned to your case. This meeting is also known as the "341" or "Meeting of Creditors". This is very quick and usually fairly informal. In most cases, it is the closest you'll ever get to appear in court, and creditors rarely appear. One of our attorneys will be there with you to help you through it and answer your questions.
If the trustee finds any assets that can be used to pay your creditors, they will work on liquidating those assets and paying the creditors.
Discharge of Debts
Certain debts are not dischargeable in Chapter 7 bankruptcy. Some examples include:
The Discharge is a court order permanently eliminating your obligation to pay certain debts. Most unsecured debts such as credit cards, store charge cards, medical bills, repossession balances, foreclosure balances, judgments, debts to former landlords, and many others, are discharged in Chapter 7.
Child Support, Spousal Maintenance, and Divorce property settlement debts
Certain tax debts
Debts incurred through fraud, including running up credit cards prior to filing
Debt associated with intentional theft or intentional injury of another
Debt associated with injury to others due to a DUI car accident
If you have questions about whether a particular debt can be discharged we can review your specific situation to give you a legal opinion and discuss your options. Some debts that cannot be eliminated in Chapter 7 can still be dealt with in Chapter 13. Chapter 13 can be a particularly great tool to deal with tax debts, student loans, and certain support debts.
We are a debt relief agency helping people file for relief under the bankruptcy code. The information contained herein is not legal advice. Any information you submit to Perez & Perez via this website may not be protected by attorney-client privilege. An attorney responsible for the content of this Site is Juan A. Perez Jr., licensed in Indiana with offices at 151 E. Delaware St. Ste. 1460A, Indianapolis, IN 46204.