The Long and the Short of Bankruptcy in Indiana

June 9, 2013 2:54 pm Published by

Many of the questions I hear from Bankruptcy in Indiana readers and from the dozens of Indiana individual bankruptcy clients I meet with each week center around time.  In other words, people want to know how long the process takes, and how the process works. One website that summarizes an actual timetable for bankruptcy Chapter 7 is bankruptcyaction.com.

One of the Indianapolis bankruptcy lawyers who works in the Zuckerberg bankruptcy law offices  shortened this material into six phases. My own way of doing things is to talk about eight phases, because, before the bankruptcy documents can be filed with the court, all the financial information needs to be carefully collected and sifted through, and the debtor needs to go through a “mini-course” before filing.

Day #1 -The bankruptcy documents are filed with the court..

Day #14 – Creditors are notified a petition has been filed.

Day #20 – #40 – Creditors' meeting is held at t6he Court.

Day #20 – #30 and after – Trustee sells non-exempt assets. 

Day #90 – Unsecured creditors' deadline to file claims.

Day #60 – 90  Debtor discharged.

Of course, after more than twenty six years practicing Indiana bankruptcy law, this timeline has become second nature to me.  The other day, though, I couldn’t help thinking about how short a process we have here in the United States.  I say that, because just the other day, I read an article about bankruptcy that appeared in the Irish Examiner newspaper. “There has been a sharp increase in Irish people seeking bankruptcy in Britain,” the article begins. Business correspondent John Walsh explains why: In Great Britain in takes a year to be legally discharged from one’s debts. Up until now, it had been taking twelve years to be discharged from debts in Ireland; that has now been reduced to three years, with the banks retaining the right to keep some restrictions going after the three years are up.

When I shared the article with one of my Columbus bankruptcy lawyer colleagues, she pointed out that it isn’t as easy as it sounds for Irish people to file bankruptcy in Britain – applicants must move their main center of business interest to the UK, physically move there, and establish a primary residence.

I should explain that here in the U.S., even though we have federal bankruptcy laws, you file for bankruptcy in Indiana – or in Pennsylvania, or California, or Tennessee, etc. – based on the state you've been living in for "the majority of the 180 day period" preceding the filing.  In other words, you have to have been a resident 91 days.

Also, it’s important to remember, the 60-90 day timeline I mentioned above applies only to Chapter 7 bankruptcy.  Under Chapter 13 bankruptcy law, by contrast, the debt repayment plan takes three to five years. (I wouldn’t be running to the United Kingdom to file personal bankruptcy when Indiana bankruptcy law offers such viable opportunities for a fresh financial start!)
 

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This post was written by Mark Zuckerberg

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