Chapter 13 Bankruptcy is a great “tool” in the toolbox of attorneys who assist people with debt issues. In Indiana, Halcomb Singler, files Chapter 13 bankruptcy petitions most often to assist those who had a temporary decrease or lack of income and fell behind on their home mortgage payments. A Chapter 13 bankruptcy can give a Hoosier homeowner up to 60 months to get current on their mortgage and will stop a sheriff sale. However, that doesn’t mean that Chapter 13 is easy to complete successfully and it also doesn’t mean that Chapter 13 is for everyone.
For those struggling with the decision to file bankruptcy, pursue debt settlement or simply to do nothing (this is actually an effective strategy in some situations when a person has no assets/income to protect), Halcomb Singler, LLP, offers a free initial consultation. At the consultation we discuss your household income, expenses, debt and assets in order to come up with a plan that will best assist you in solving your debt problem moving forward.
When we meet with potential clients at our Carmel, Indiana office, we evaluate their debt issues in order to determine how best to solve them. So, when do we often find that Chapter 13 isn’t a great option? First and foremost, in order to file a Chapter 13 bankruptcy, a person must have some money left over each month to make a payment. If the person/couple has insufficient income left over each month to cover their basic living expenses then Chapter 13 won’t work because there won’t be any funds available to pay into a Chapter 13 repayment plan. Another indication that will usually move us away from Chapter 13 and toward debt settlement is when the individual or couple has higher than average expenses that they are not willing to change. For example, a $500.00 per month fee for traveling baseball for a child isn’t going to be something that one is going to have the funds to continue paying during a Chapter 13 bankruptcy. On the same note, if a couple sees nothing wrong with spending $800.00 eating out per month and has no desire to change they are just not going to be able to make a monthly trustee payment. At Halcomb Singler we understand that our clients are able to do what they want with their money and if, after discussion of all of the remedies that creditors have, they aren’t likely to change certain spending behaviors then it is up to our attorneys to find different solutions.
The fact is that it is difficult to maintain the minimal budget that is required for a Chapter 13 bankruptcy over time. In order to do so, an individual or family must be disciplined with their spending. In the event that a Chapter 13 bankruptcy is filed, if the monthly trustee payments fall behind then the Chapter 13 bankruptcy will eventually be dismissed. And when a Chapter 13 bankruptcy is dismissed then then the individual or couple is still liable for any outstanding debt that hasn’t been paid through the bankruptcy. So, if it is clear from the outset that the individual or couple isn’t likely to be successful in a Chapter 13 bankruptcy we often advise debt settlement. Debt settlement is a process through which we negotiate debts on behalf of our clients outside of bankruptcy. Debt settlement requires our clients to obtain/save funds to offer to creditors. However, debt settlement allows our clients more financial freedom than may be available if a bankruptcy is filed.
How debt is addressed is very dependent upon the person with the debt. That is why meeting with a Halcomb Singler attorney in person is invaluable for us to assist clients in determining how to best eliminate debt. No two situations are the same. The bottom line is that there is typically a way to deal with debt so that in the future your family is not struggling financially. We can help you determine how. To schedule an appointment please contact our office at (317) 575-8222.