The general public commonly pictures those who need to file bankruptcy as homeless, penniless, or as those who have been reckless with their finances. Nothing could be further from the truth. At Halcomb Singler we find that most people who need to file for bankruptcy have jobs, a home, and vehicles. These people have typically just fallen behind on bills due to an injury, illness, job loss, or divorce. People who file bankruptcy often feel ashamed and guilty about their inability to repay their debts and have often done everything they can think of in order to repay their creditors. Unfortunately, sometimes there is just not enough money available after paying for housing, food, medical necessities, and transportation to pay creditors. When those creditors start calling, filing lawsuits, garnishing wages or commencing foreclosure lawsuits is when people typically start to research bankruptcy options.
Attorney Erika Singler takes pride in taking the stress of financial problems off of the shoulders of her clients. Erika experienced first-hand the stress and anxiety that debt issues caused in her household as a child as well as the failure of a family-owned business that resulted in one of her parents filing for bankruptcy protection. This experience has given Erika an understanding of the complex emotions that each person must go through in order to determine that he or she may need to look into filing bankruptcy.
At Halcomb Singler, LLP, we believe whether or not to file bankruptcy should be looked at more from a business standpoint. The fact is that if people are in a position to pay their bills they are not looking into bankruptcy. Bankruptcy is there for those with good intentions who took on debt with every expectation that they would repay the debt in full. In many situations people who choose to file bankruptcy are making a choice between filing bankruptcy and losing 25% of their take home pay to a garnishment which would not leave them with enough money to make their mortgage payment. In other cases people decide to file bankruptcy in order to have more time to bring their mortgage payments current so that they do not lose a house to foreclosure.
The United States, through 11 U.S.C.28, developed a bankruptcy code. This federal code (along with some other federal codes, federal rules and state exemptions) allows individuals and married couples to file for bankruptcy in an attempt to either reorganize or eliminate their debts. The bankruptcy code does not set forth any minimum amount of debt that any individual or couple must have in order to file bankruptcy. Similarly, the bankruptcy code does not limit the income of any individual or couple that would preclude them from filing bankruptcy. There are many different Chapters of Bankruptcy including 7, 9, 11, 12 and 13. However, most individuals file either Chapter 7 or Chapter 13 Bankruptcy. At the most basic level Chapter 7 and Chapter 13 Bankruptcy are different because in Chapter 13 Bankruptcy the bankruptcy debtor repays all or a portion of their debt through monthly payments over 36 to 60 months and in Chapter 7 bankruptcy a debtor will typically not repay any of his or her debt.
While many people believe they will lose all of their assets if they file bankruptcy, this is completely untrue. Currently in Indiana, a single debtor is able to exempt (or keep) $350.00 in cash, $9,350.00 in personal property, and $17,600.00 in equity in a home, and an almost unlimited amount in tax-deferred retirement on the date of the filing of an Indiana bankruptcy. In the event a couple needs to file bankruptcy jointly because they both owe debts the exemptions are increased to $700.00 for cash, $18,700.00 for personal property and $35,200.00 for home equity. What this means to most Indianapolis individuals who need to file bankruptcy is that they likely will not lose any of their “stuff” if they file bankruptcy. In fact, it is rare that an individual loses any property that he or she did not intend to give back to the bank, such as a home or a car.
Bankruptcy can be a great tool because it can offer protection from creditors, who can be very aggressive in attempting to collect their debts. Specifically, Bankruptcy can:
However, bankruptcy is not the correct course of action for everyone. Every person is different and every person struggling with debt is facing a different situation. Even though people are entitled to file bankruptcy, it is not always a good tool for every debt situation. At Halcomb Singler we will advise you if we do not believe bankruptcy is your best option.
Often fear or embarrassment will cause an individual or couple to delay in seeking legal advice, which will result in judgments or garnishment. At Halcomb Singler, LLP, we offer a free initial case evaluation with an experienced bankruptcy attorney who may recommend bankruptcy, debt settlement or some other option. It is common for people to leave their initial consultation feeling relieved because they now have a plan of action, regardless of whether it involves bankruptcy. Please feel free to contact our office if you are struggling with debt so that together we can formulate a financial plan forward.
*Halcomb Singler, LLP, is a debt relief agency. We help people file for bankruptcy relief under the bankruptcy code.
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