Chapter 7 bankruptcy is certainly not for everyone. As an attorney in the Indianapolis area, I think it is important for people having a difficult time either paying off or staying current on their debt some of benefits of filing Chapter 7 Bankruptcy. In my opinion, some of the most important things Chapter 7 bankruptcy can do for you are as follows:
1. Stop or prevent Garnishment: Once a creditor in Indiana has filed a lawsuit against you and obtained a judgment the next likely step the creditor can take is to garnish your wages. Typically, this amounts to 25% of your after-tax pay. Filing a Chapter 7 bankruptcy can prevent this from happening.
2. Remove a judgment lien. If you own real estate and a creditor obtains a judgment against you there is a possibility that there is also a lien that has been placed on your home to secure the judgment. This means that you cannot sell the home without paying off the judgment. It is often possible in Chapter 7 bankruptcy to remove the judgment lien from your home.
3. Stops your obligation on credit card/unsecured debt. If you meet with a bankruptcy attorney in Indianapolis or the surrounding areas and he or she advises you that Chapter 7 bankruptcy could be of benefit to you and you decide that you do wish to proceed with bankruptcy the attorney will likely advise you to stop paying your credit card or other unsecured debts.
4. You can give back secured property. If you have a home or vehicle that you believe is the root of your financial problem Chapter 7 bankruptcy will allow you to give that vehicle or home back to the bank and stop making any payment toward that debt. You will not be liable for the remainder of the balance on the loan if the sale of the home or vehicle is not enough to cover the loan. Further, you will not have any tax liability for forgiveness of debt.
5. Get rid of income taxes. If you owe back taxes that are several years old you may be able to discharge the income taxes and pay nothing to the IRS or Indiana Department of Revenue. Generally, at the time of the writing of this blog, if you owe 2009 income taxes that were filed on time they are likely dischargeable in a Chapter 7 bankruptcy. However, there are other factors that go into this determination and only a bankruptcy lawyer can tell you whether your income taxes would be dischargeable after meeting with you.
6. Get your budget in line. When you file a Chapter 7 bankruptcy petition a portion of that petition is a budget. You are required to inform the judge as to an itemization of your income and expenses. This is a great tool to make sure you are moving forward on the right foot after the filing of your bankruptcy petition.
7. Stop creditors from harassing you. Once a Chapter 7 bankruptcy is filed your creditors are no longer allowed to attempt to collect from you via telephone, mail or by any other means.
8. Cancellation of expensive cell phone contracts or leases. If you file a Chapter 7 bankruptcy petition you will have the option whether or not you want to keep a cell phone contract or lease agreement. You have the option depending on how you feel the obligation will fit into your post-bankruptcy budget to either agree to continue the contract or to cancel it.
9. Delay foreclosure. If you live in the Indianapolis area and you have a pending mortgage foreclosure filing a Chapter 7 bankruptcy will delay the mortgage foreclosure. Even if you are surrendering your home, filing a Chapter 7 bankruptcy petition may allow you additional time to remain in the home without payment.
10. Finally and probably most important, gets rid of your debt. Chapter 7 bankruptcy will legally discharge any unsecured debt such as credit cards, payday loans, personal loans, and medical bills so that you are able to meet your monthly living expenses instead of using all of your income to pay bills.
If you believe you may need to file bankruptcy and live in Indianapolis, Zionsville, Carmel, Westfield, Noblesville, Fishers, Tipton, Greenwood or any of the surrounding areas and would like to meet with me at Halcomb Singler, LLP (located conveniently near 31 and Carmel Drive in Carmel, Indiana) please call our office at (317) 575-8222 or click here. Halcomb Singler offers a free initial case evaluation with no obligation and no pressure to file bankruptcy.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses