After more than 26 ½ years practicing Indiana bankruptcy law, you’d think I’ve seen it all, and in many ways, I have. But offering help and advice to people is never, ever repetitive – each situation is different. Today I’d like to share three true stories (the names have been altered) to show the many forms of relief that the bankruptcy system, used properly – and in time – can have in making big and important improvements in debtors’ lives.
True Tale #1
Judy worked for Hostess Corporation until everyone was laid off. She kept waiting to be recalled. As her debts piled up with no income coming in, she could have filed bankruptcy Chapter 7 in Indiana. Instead, Judy kept waiting and hoping to find work and catch up on her debts. Now that she’s working again, the only way in which she qualified to file personal bankruptcy in Indiana is under Chapter 13 bankruptcy law. And, while the company is planning to reopen its Indianapolis plant, it’s too late for Judy to gain discharge on many of those debts.
True Tale #2
After his heart attack, Jack was left with more than $50,000 in medical bills. Jack’s only income comes from social security. By law, those benefits are exempt from creditors, and so it appeared on the surface that Jack would have no reason to file individual bankruptcy in Indiana.
Nonetheless, filing bankruptcy is exactly what Jack chose to do. Why? To stop the phone calls and letters that had been making his life so torturous. The bankruptcy automatic stay provision, Jack learned, would put a halt to all legal and collection activities against him. Automatic Stay, is defined as “an injunction that automatically stops lawsuits, foreclosures, garnishments, and all collection activity against the debtor the moment a bankruptcy petition is filed.
True Tale #3
Sam was in something of the same situation, with his only income being from social security disability. According to the U.S. Bankruptcy Code (on which the new bankruptcy laws of Indiana are based), Social Security income is not to be included in a debtor’s disposable income. He, like Jack, wanted to end the phone calls and letters from creditors. Sam’s only concern about bankruptcy was that he wanted to buy a motorcycle and he was afraid that, if he filed, he’d be denied credit. The Columbus bankruptcy lawyer who helped Jack loves sharing how relieved the man felt upon learning that it’s a common myth that there’s no available credit following bankruptcy. The reality is, most of my clients are eligible to buy a car or cycle the day after they file – and at a decent rate of interest!
Bankruptcy is first and foremost a safety net. Indiana bankruptcy law is there to protect honest but unfortunate debtors and offer the chance for a fresh financial start. That fresh start may take the form of debt relief, peace of mind, or a set of wheels!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg