Nothing to Protect? Asks Indiana Bankruptcy Lawyer. Protect Before You Do!

June 12, 2012 12:21 am Published by

“Take two case studies and call me in the morning,” I sometimes feel like saying to clients of the Zuckerberg bankruptcy law offices.  That’s because, even though I practice only Indiana bankruptcy law, I like to tell my clients stories from actual courtrooms around the country to help explain how the process might work in their case.
 

Today I have three stories to share:

From Rhode Island:
 

  • 5 months prior to filing under Chapter 13 bankruptcy law, V. was injured in a car accident, for which she filed a personal injury claim.
  • In her bankruptcy paperwork, V. claimed an exemption for any money she might receive from that claim.
  • The bankruptcy trustee objected, saying the proceeds needed to be included in V.’s projected disposable income, so that the money could be used to pay creditors.
  • The court ruled in V.’s favor, saying should could keep whatever money she might receive from the claim.
     

Lesson for clients and all good bankruptcy attorneys in Indiana: While all monies received by a Chapter 13 debtor during the life of the bankruptcy could be controlled by the bankrutpcy court, in this case, because it was never sure if money would even be received at all, or what the amount would be, the courts said it did not need to be included in disposable income and go towards repaying debt.

 


From Illinois:


Since quite a few Columbus, Indiana bankruptcy clients who filed individual bankruptcy in Indiana were condo owners, this case caught my attention:


  •  
  • S. was evicted from her condominium for failing to pay her assessments
  • One month later, S. filed under Chapter 13 bankruptcy law.
  • S. claimed her association was violating the bankruptcy automatic stay by refusing to return possession of the condo to her.
  • The bankruptcy court found that while S. still owned the condo, she was not entitled to possess it without paying the bills.
  • That same ruling meant the condo was not part of the bankruptcy estate.

Lesson for those filing personal bankruptcy in Indiana:
The automatic stay halts all debt collection efforts.  However, it does not prevent an association from keeping possession of a unit that is in default on association fees.

 

From Nebraska:
 

  • T. and A. had been in a romantic relationship, so T. added A. to her checking account to allow his paychecks to be automatically deposited there.
  • The couple broke up.
  • A. took $7,000 out of the account (without T.’s permission, and overdrawing the account, which was set up to spill over onto a credit card with a 19.9% interest rate).
  • He then filed Chapter 7 bankruptcy.
  • T. sued to have her claim exempted from bankruptcy discharge.
  • The court ruled in her favor.

Lesson for Indiana bankruptcy filers:
A. Took the money without authority (he did not own the credit card into which the overdraft fell).  Illegally generated debt cannot be discharged through bankruptcy.  The same would have been true for small business bankruptcy in Indiana, by the way.

 

As I’d been thinking about saying, take three case studies, and in the morning, call for Indiana bankruptcy help!

 

 

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This post was written by Mark Zuckerberg

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