Indiana Bankruptcy Lawyers Offer All-or-Nothing Advice – Part One

November 10, 2012 4:42 pm Published by

Filing personal bankruptcy in Indiana, at least in theory, is a relatively simple process, if not an easy decision for debtors to make.  What I’ve discovered, though, after 25 years offering Indiana bankruptcy help, is that there’s no “cookie-cutter” way to handle people’s affairs.  And, whether I’m dealing with Indiana small business bankruptcy, an individual Indiana bankruptcy filing, or both, it’s never an all-or-nothing matter.

Often, in these Bankruptcy in Indiana articles, I end up sharing stories of actual bankruptcy cases, by way of clarifying the way the new bankruptcy laws work and the way those laws translate into real life court decisions.  So, this week, I’m calling my series “All or Something Advice”.

One of the Columbus bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices happens to be from Ohio, and a writeup of a bankruptcy case in that state caught her attention.

By way of background, I want to remind readers that normally, annuity payments are exempt in bankruptcy in Indiana. In other words, when considering how much of their income debtors are allowed to keep to pay their own expenses and whether any will be left over to pay creditors, money received from an insurance annuity typically does NOT need to be used towards debt repayment.

But, remember, it’s never all or nothing when it comes to filing for bankruptcy! There’s always the not-so-cookie-cutter part, as is clear from this situation in Ohio:

  • Denise’s husband died at age 26 – she was 24, and they had 3 small children.
  • Denise had sued the hospital for wrongful death, and hospital’s insurance company created a structured settlement using an annuity that would pay $2000 a month, plus a lump sum of $200,000 after 30 years.
  • Denise filed bankruptcy, claiming the benefit payments as exempt.
  • Trustee objected, saying the annuity was an investment and should be turned over to pay creditors.
  • Ruling was that the payments could remain exempt, but only up to $1,505, because, with her salary, Denise didn’t need the entire $2000 for support. The remaining money each month would need to be turned over to the trustee to pay debt.  When the lump sum would come in, $56,448 of it would be exempt with the rest subject to “turnover” to the court.

As you can see, the court did not rule “all or nothing” – they took into consideration the details of this individual case.  As a lawyer for bankruptcy in Indiana, my job is dealing with each individual situation, then trying for as “cut and dried” a result as possible!




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This post was written by Mark Zuckerberg

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