When starting the filing process, the bankruptcy trustee will investigate your finances and assets to determine whether you’re eligible to file. Depending on whether you file under Chapter 7 or Chapter 13, the trustee has the power to liquidate non-exempt assets and determine whether you can discharge your debts in accordance with the United States Bankruptcy Code.

Here’s what you need to know about the bankruptcy trustee and what they will investigate.

What Is a Bankruptcy Trustee?

A bankruptcy trustee is an official representative appointed by the United States Trustee Program, which is part of the Department of Justice. Although the trustee will make recommendations to the Bankruptcy Court regarding what actions to take, the bankruptcy judge has the final authority.

Additionally, the bankruptcy trustee cannot take any steps without the Bankruptcy Court’s approval. The full scope of the bankruptcy trustee’s responsibilities will depend on whether you’re filing under Chapter 7 or Chapter 13.

Whether you’re filing Chapter 7 or Chapter 13, the bankruptcy trustee will hold the 341(a) Meeting of Creditors, an obligatory meeting for bankruptcy filers. At the meeting, the trustee asks the bankruptcy filer questions under oath to ensure that the filer didn’t lie or make mistakes when completing the bankruptcy paperwork. The trustee will ask questions verifying the filer’s assets and finances, and they’ll ask about any problems or inconsistencies with the filer’s paperwork.

What Does the Bankruptcy Trustee Investigate in Chapter 7?

A bankruptcy trustee overseeing a Chapter 7 bankruptcy has many responsibilities.

First, the trustee will review the debtor’s means test, and survey their financial information. The trustee may request documentation that corroborates the debtor’s financial situation and assets, and they’ll also inform the filer of any information they need for the 341(a) Meeting of Creditors.

If you file under Chapter 7, the bankruptcy trustee will investigate your assets and finances to determine your filing eligibility, and to determine if there are non-exempt assets they can liquidate.to pay back creditors. It’s important to remember that most Chapter 7 filers don’t lose any of their possessions during the liquidation process because of exemptions.

Finally, the trustee will determine whether or not there are grounds to deny the discharge your debts through Chapter 7. If you hid or lied about your finances and assets, the trustee will object to the Court discharging your debts. Other reasons why they may object to your discharge include:

• You deceived the trustee or the court.
• You already filed Chapter 7 bankruptcy in the last eight years.

What Does the Bankruptcy Trustee Investigate in Chapter 13?

When a debtor files under Chapter 13 bankruptcy, the trustee must verify their identity and review their finances and assets — as was the case with Chapter 7 — but they must also determine whether the debtor can fund their Chapter 13 repayment plan. In addition, the trustee will review to see if the Debtor’s Chapter 13 Plan meets all the requirements of approval or “confirmation”. The Trustee makes reports to the Court, but once again, the Judge in the bankruptcy process has the final say.

What If I Fail to Disclose Information About My Finances or Assets?

During the filing process, the trustee has the right to survey all of your finances and assets, and they can request any additional supporting documentation. The trustee will investigate whether any inconsistencies in your filing indicate fraud.

The trustee can also subpoena others to testify about your finances. For example, if the trustee suspects you have money or valuable assets you’re hiding, they can subpoena a friend or family member who may have information about the money.

During the Meeting of Creditors, the bankruptcy trustee will also ask questions you must answer under oath. These questions aim to clarify any red flags or inconsistencies within your finances that indicate dishonesty.

Some of these signs of fraud include undisclosed or undervalued property, transferring property in anticipation of filing, not verifying income, making preferential payments to a creditor — such as paying back a debt to a family member — and spending excessively.

Plus, the trustee will likely ask you questions to verify your identity and ensure you filed the paperwork correctly.

Suppose you knowingly or mistakenly hid or misrepresented your finances or assets, the bankruptcy trustee will likely object to the Court discharging your debts. Additionally, if you committed fraud during the bankruptcy process, you may face felony charges with hefty fines and possibly jail time.

Contact an Indianapolis Bankruptcy Attorney

If you’re considering filing Chapter 7 or Chapter 13 bankruptcy, don’t go through the process alone — contact an experienced bankruptcy attorney today. A bankruptcy attorney can help you ensure that you file correctly, and they’ll work to help you get your finances back on track.

For bankruptcy legal assistance you can count on, contact the Indianapolis bankruptcy attorneys at Sawin & Shea, LLC. Schedule a free consultation today by calling 317-759-1483, or you can request an appointment online here.

The post What Does the Bankruptcy Trustee Investigate? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

We’re here to help.

If you’re struggling with debt and considering bankruptcy, speaking with a bankruptcy lawyer can help you determine your best options and give you some clarity on how the process works.

At Sawin & Shea, LLC, our Chapter 7 Bankruptcy lawyers have helped clients just like you in the Indianapolis and surrounding areas. With over 65 years of combined bankruptcy and consumer protection legal experience, we know what it takes to help our clients achieve financial freedom and successfully complete their Chapter 7 bankruptcies.

Before working with any lawyer, however, it’s always important to do your research and prepare a list of questions to ensure the lawyer you choose has the experience and skills necessary to help you successfully navigate the bankruptcy process.

1. What is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy, also known as liquidation or straight bankruptcy, can help those having financial difficulties clear away various types of debts. When you file for Chapter 7 bankruptcy, the Court will place an automatic stay upon filing, which stops creditors from collecting payments, garnishing wages, or repossessing property.

You will be assigned a trustee during the process who will review your assets and finances. They will then determine what, if any, non-exempt property they can seize and will use the proceeds from that property to repay a percentage to your creditors. Most Chapter 7 cases are what we call “no-asset” cases and people keep everything they have.

2. How Long Does Bankruptcy Chapter 7 Take?

In general, the entire process from filing to discharge of debts takes about three to four months. However, every case is different. Various factors can play a role in how long your bankruptcy takes, such as how long it takes to submit all of your documents and if a Trustee is going to collect and sell off any of your property. And a significant amount of time comes from mandatory waiting periods required by the law.

3. Will All of My Debt Get Discharged?

When you file a Chapter 7 bankruptcy, it is only your unsecured debts that will be eligible for discharge. This includes debts such as credit card balances, medical bills, personal loans, utility bills, back rent, mortgages, and car payments. However, if you used your home or car as a secured debt with a lender, you may need to return the property to the lender if you don’t pay as agreed.

Some unsecured debts are not eligible for discharge in a Chapter 7 bankruptcy, which include:

• Child support
• Student loans
• Alimony
• Certain kinds of tax debt
• Homeowners’ association fees
• Court fees and penalties

4. Will I Lose My Property When I File Chapter 7 Bankruptcy?

State and federal laws protect certain properties in bankruptcy, meaning they are exempt and cannot be taken by your Trustee on behalf of your creditors. Most people keep everything they have in Chapter 7 cases. It is important to talk to a bankruptcy attorney about what might be at risk in your case.

Also, if you have a debt that is a lien against collateral (a car loan, a mortgage loan), the creditor can force a return of that collateral to try and partially satisfy their debt. That being said, most creditors allow debtors to reaffirm their secured debts, which means you can keep the property so long as you are current on payments.

5. What Are Your Bankruptcy Lawyer Fees?

Legal and attorney fees can vary from one law firm to the next. There are also court fees you will need to pay when you file. Currently, the Court’s filing fees for Chapter 7 are $338. As for the lawyer fees, you should ask your attorney what their fee structure is when you sit down to meet with them. A good lawyer will have nothing to hide and should be upfront about the cost of working with them.

6. What Will Happen to My Credit Cards When I File Chapter 7?

Most debtors cannot keep their credit cards when they file for Chapter 7. You will need to disclose all of your credit cards that have a balance on them when you file. However, even your cards that have a zero balance will likely lose borrowing privileges. But the good news is that credit card debt is dischargeable in Chapter 7 bankruptcy.

7. How Long Will Chapter 7 Bankruptcy Stay on My Credit Report?

Typically, Chapter 7 bankruptcy stays on your credit report for ten years. The standard is ten years for Chapter 7 and seven years for Chapter 13. This means that doing things after bankruptcy to build credit is important.

When you sit down with your bankruptcy lawyer, they can help you weigh the pros and cons of filing and your credit report taking a hit. In many cases, it is worth it to file to alleviate the financial burden, even though your credit will be affected. In a lot of cases, bankruptcy can actually improve your credit. It can stop negative information from continuing to pile up on your reports. Your lawyer can also offer advice on rebuilding your credit faster after your bankruptcy is complete.

8. Why Do I Need a Chapter 7 Bankruptcy Lawyer?

Navigating bankruptcy on your own is generally not advised. While you can file without one, there are a lot of legal details and paperwork to stay on top of, and if you make any mistakes, it can negatively affect your case and prolong the process.

Working with a Chapter 7 bankruptcy lawyer will give you peace of mind and help the process go smoother. They can also help protect your assets and help you more efficiently achieve financial freedom.

A good bankruptcy lawyer will:

• Offer you a free initial consultation to review your case and help you determine your best options.
• Offer you advice and help you better understand what to expect.
• Help you gather all necessary information and file paperwork.
• Represent you in court.

Sawin & Shea, LLC: Chapter 7 Bankruptcy Lawyers

At Sawin & Shea, we provide compassionate and understanding representation to those struggling with debt and filing for bankruptcy. Whether you are considering applying or need help with something during or after your bankruptcy, we are here to help.

Contact us at 317-759-1483 or send us an email for a free consultation today with one of our Chapter 7 bankruptcy lawyers today!

The post Questions to Ask a Chapter 7 Bankruptcy Lawyer Before Filing for Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

However, for this reason, it’s not uncommon for people to want to know how to remove bankruptcy from a credit report. Whether you want to open new lines of credit, secure a new loan, or buy a home—there are many reasons why you might want to get rid of your bankruptcy to improve your credit score.

Unfortunately, most bankruptcies cannot be removed from a credit report, not unless you qualify under certain conditions. If you don’t qualify, you might simply have to wait until the bankruptcy leaves your report after the standard reporting time. You can, however, make your credit better post-filing. In many cases, the act of filing a bankruptcy makes credit better by ending ongoing negative information from continuing to appear on the reports. In either case, speaking with a bankruptcy attorney may help.

At Sawin & Shea, we understand how difficult going through bankruptcy can be and are dedicated to helping make the process as smooth and stress-free as possible for our clients. Whether you are filing for Chapter 7 or Chapter 13, we can assist you, both with the process of filing and even after your bankruptcy has been discharged.

Credit Scores: What Happens When You File for Bankruptcy?

When you file for Chapter 7 bankruptcy, you will list all of your debts, non-exempt assets can then be liquidated to pay back your creditors. Most Chapter 7 cases are what is called a “no-asset” case and the debtors keep everything they have. Most types of debts are typically discharged.

With Chapter 13 bankruptcy, instead of discharging all of your debt, a payment plan is worked out so that you can pay a percentage of your debts over a three to five-year period. In this situation, your creditors and lenders might get more money back than they would with a Chapter 7. This process can still hurt your credit, but it might not affect it as severely as it would if you filed Chapter 7.

How Long Does Bankruptcy Stay on Your Credit Report?

The length that a bankruptcy stays on your credit report will depend on the type of bankruptcy you filed. The two primary types of bankruptcy are Chapter 7 and Chapter 13.

A Chapter 7 bankruptcy can remain on your report for up to 10 years. Chapter 13 will stay on your credit report for 7 years.

Who Reports Bankruptcy to the Credit Bureaus?

Despite what some may believe, the Bankruptcy Court does not interact with credit bureaus, meaning they do not report your bankruptcy to them. However, the court has a legal obligation to maintain an accurate record of bankruptcy filings, and once a case is filed, it becomes permanent and public record.

As such, anyone or any organization can access bankruptcy files either by visiting the courthouse or through the online system. So, it is usually the creditors or the credit bureau themselves that access this information and report it. The Bankruptcy Court has no control over what credit bureaus do with the information once they access it.

How to Remove Bankruptcy from a Credit Report

No one can legally remove accurate information about bankruptcy from their credit report. However, under the Fair Credit Reporting Act, you can file a dispute with the credit bureau if the information on your report is inaccurate or incomplete.

If your bankruptcy is legitimate, you will not be able to legitimately dispute it. In this case, your only option is to wait until the credit bureau removes it after the standard seven to ten years. If the bankruptcy is not removed after that time, you can file a dispute to have it removed. In the meantime, make your credit better by doing all the things that make credit good. Do not overextend yourself on credit and make timely payments on credit accounts.

Common errors or mistakes that credit bureaus make regarding bankruptcies that you can file a dispute for include:

• Misspelling errors, wrong addresses, wrong dates, etc.
• Discharged debts still showing up on your credit report.
• Mistaken identity or someone else’s bankruptcy showing up on your credit report.
• The bankruptcy still showing after the seven to ten-year period.

If any of these mistakes show up, you have the right to dispute them. However, the bankruptcy itself will still appear on your report for the standard amount of time if it is legitimate.

You can file your dispute with the credit bureau by phone, by mail, or by using their online system. However, it is generally a complex process, and if you have concerns about your rights, you may want to work with a bankruptcy attorney to help you handle your case.

How Sawin & Shea, LLC Can Help

For help with your bankruptcy case, get in touch with the Indiana attorneys at Sawin & Shea. We provide compassionate and understanding representation to those struggling with debt.

Our attorneys can help walk you through the bankruptcy process every step of the way. We can even offer guidance after your bankruptcy case has ended to help you rebuild your credit.

Contact us at 317-759-1483 or send us an email for a free consultation today!

The post How to Remove Bankruptcy from a Credit Report appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

You thought the phone calls were over – and they should be. That’s why it can be especially disheartening if creditors keep calling. Who knows how to get debt collectors to stop calling after bankruptcy? How long after filing for bankruptcy do collectors keep calling? Why would such a thing even happen? There are three reasons:

1. Some creditors simply haven’t yet received the message that you have filed for bankruptcy. Possibly the information hasn’t yet been processed and had the chance to filter through their system. This can be the case with small enterprises or with multi-level corporations.
2. Some creditors are actively trying to take advantage of you. They may be fully aware that an automatic stay is in place, but are hoping that you don’t understand your rights and will be scared into paying something.
3. You may be hearing from creditors who will not be affected by your bankruptcy. Some debts are not dischargeable:
   
   • Student loans
   • Some taxes
   • Overdue child and spousal support
   • Debts arising from willful and reckless acts, embezzlement, fraud, or larceny
   • Any debts you did not list when you filed for bankruptcy (unscheduled debts) unless the creditor learns of your bankruptcy case.

How to stop debt collector calls after filing for bankruptcy:

1. Answer the calls. You have already taken a positive step and have no need to fear phone calls from people who shouldn’t be contacting you; they are in the wrong.
2. Get the name (or employee number) of the person you are speaking to and write down all details of the call, including the date, time, company involved, and what was said. Keep all documentation, including voice messages.
3. Inform the caller that you have filed for bankruptcy and tell them to stop contacting you. Give the caller your case number.
4. If calls (or letters) continue, contact your bankruptcy attorney. Under the FDCPA (Fair Debt Collection Practices Act), third-party debt collection agents are not allowed to contact you asking for payment once you have filed for bankruptcy. It is illegal. The bankruptcy attorneys at Sawin & Shea, LLC can answer your questions and enforce your rights. At the very least, we can make sure that all information has been updated in the company’s system, and if necessary, we can pursue legal action against those who continue to illegally harass you so that you can receive compensation for your mental and emotional stress.

What if my debt cannot be discharged?

If you are being contacted about debt that is not dischargeable, you still have rights under the FDCPA. Debt collectors are not allowed to do the following:

• Call repeatedly
• Call before 8:00 a.m. or after 9:00 p.m.
• Call without identifying themselves
• Disclose your information to third parties
• Use abusive or offensive language
• Contact you after you have provided written notification that you do not want to be contacted
• Claim to be affiliated with any governmental organization if they are not
• Misrepresent the character, amount, or legal status of a debt (in other words: lie)
• Threaten to take action which is not actually intended to be taken
• Threaten to communicate or actually communicate false credit information

What if my debts have been discharged and the creditor calls keep coming?

After your bankruptcy, your creditors will receive notice of your bankruptcy discharge order. It’s not common, but sometimes debt collectors continue to demand payments from people who have had their debts discharged. If this happens to you, follow the steps outlined above.

Don’t hesitate to contact Sawin & Shea, LLC. We can inform the bankruptcy courts of what is happening, and the courts may levy fines or penalties. If necessary, we can begin legal proceedings against the debt collector who is continuing to harass you. 

A qualified legal professional knows how to get debt collectors to stop calling after bankruptcy and can help you navigate the stress of debt collectors who may or may not be obeying the law. The Indiana bankruptcy attorneys at Sawin & Shea, LLCpursue collection agencies who violate the FDCPA law, during and after your bankruptcy case. If you are struggling with creditor calls, contact us at 317-759-1483 or Send an Email for a Free Consultation. We are ready to help.

The post How to Get Debt Collectors to Stop Calling after Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

One common question we see with those considering bankruptcy is “How long after bankruptcy can I get a mortgage?” which is a valid concern.

If your financial situation improves, it’s understandable that you might want to take the step toward home ownership. And the simple answer is, yes, you can get a mortgage after bankruptcy. It will just depend on how long ago your bankruptcy was, the lender or type of mortgage loan you are applying for, and what type of bankruptcy you filed, such as a Chapter 7 or Chapter 13 bankruptcy. 

Getting a Mortgage After Chapter 7 Bankruptcy

Chapter 7 is the most common type of bankruptcy, but it is also the hardest to get a mortgage after. However, though you can expect your credit score to be impacted for 10 years after a Chapter 7 bankruptcy, you do not typically have to wait that long to apply for a mortgage. If you can re-establish your credit, or if you can find lenders that are willing to work with those who have gone through bankruptcy, you can apply for a mortgage as little as a year after your bankruptcy is discharged.

If you work on making your credit better after your discharge, most people are able to get a mortgage in 2 to 4 years after a Chapter 7. The exact timing can also depend on the specific type of mortgage loan you apply for, so keep that in mind when you start looking into buying a house.

Getting a Mortgage After Chapter 13 Bankruptcy

Getting a mortgage after a Chapter 13 Bankruptcy is often easier than after Chapter 7. This is because when you file for Chapter 13, you agree to a payment plan to repay your creditors over three to five years—and this has less of a negative impact on your credit score.

In fact, if you can show proof that you are making timely and consistent payments, you may be able to apply for a mortgage while you are still in the process of your Chapter 13 bankruptcy. FHA loans, for example, are available to those who are going through a Chapter 13 bankruptcy, so long as they meet certain conditions.

You will be more likely to be eligible for a mortgage during Chapter 13 if you:

• Have made 12 months of on-time payments in your Chapter 13 plan.
• Are approved by the court to purchase a house with an FHA loan.
• Can demonstrate that you are unlikely to have to file for bankruptcy again.

Other mortgage loans you may qualify for while still completing your Chapter 13 include VA and USDA loans. If you are trying to secure a conventional mortgage loan, however, you may need to wait at least two years.

Mortgage Companies That Deal with Bankruptcy

While there is no set list of specific companies that are bankruptcy-friendly, as every lender has different policies, and their policies can change from year to year, there are certain types of loans that you may be able to get more easily, as mentioned above.

• FHA mortgage loans: These are federally insured loans that are more attainable for cash-strapped borrowers and those going through or having just gone through bankruptcy. An FHA loan requires only a 3.5% down payment and only a 580 credit score. You can even go as low as a 500 credit score if you can put 10% down.
• USDA mortgage loans: These loans are also ideal as they offer low mortgage interest rates after bankruptcy and a 0 down payment option. For Chapter 7, you may still have to wait three years—unless you can demonstrate that the bankruptcy was beyond your control and not due to poor financial management. For Chapter 13, you can apply after 12 months of successful payment plan payments.
• VA mortgage loans: If you are a veteran who has gone through bankruptcy, VA loans are a potential option. They offer no down payment options, no minimum credit score requirement, and unlimited use of the loan program. For Chapter 7, however, you may still have to wait two years until you can apply.

Applying for a Mortgage After Bankruptcy

When you apply for a mortgage after bankruptcy, the process is generally the same as it would be if you hadn’t filed Chapter 7 or Chapter 13. However, there are some extra steps you should take to improve your chances of getting the loan.

1. Boost your credit score: If you can re-establish your credit and boost your score as much as possible, this will help before applying for a mortgage loan. You can do this by opening new credit accounts and using them wisely and making payments on time.
2. Letter of explanation: When you apply for a mortgage, including a letter of explanation for why your bankruptcy occurred can help as well. If you can demonstrate that the bankruptcy was beyond your control and that your finances have improved, the lender will potentially be more lenient.
3. Get a preapproval: Sellers and real estate agents will be more likely to accept your offer if you can show that you have already received mortgage preapproval from a lender.

How Sawin & Shea, LLC Can Help

At Sawin & Shea, we provide compassionate and understanding representation to those struggling with debt and filing for bankruptcy. Whether you are considering applying or need help with something during or after your bankruptcy, we are here to help.

Contact us at 317-759-1483 or send us an email for a free consultation today!

The post How Long After Bankruptcy Can I Get a Mortgage? appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Whether it’s a student loan, a small business loan, or even a car loan, many find themselves in a situation where keeping up with payments is difficult due to circumstances outside of their control. Most commonly individuals need help paying their mortgages. When you find yourself in a position where you are struggling to keep up with your loan, a mortgage modification may be the perfect solution. And in this case, contacting a mortgage modification lawyer will guarantee you find the best option for your unique situation.

What Is a Mortgage Loan Modification?

A mortgage loan modification is when the structure of a loan is modified to allow the borrower to successfully repay the loan. This is not available only to individuals who have completely defaulted on a loan. If you find yourself getting behind, speaking with a mortgage modification lawyer can put you in a position to get caught up before it’s too late.

A loan modification on a mortgage can occur in several ways, including:

1. Lowering interest rates
2. Reducing the principal 
3. Converting to a fixed-rate mortgage
4. Extending the term of the mortgage
5. Postponing payments

Questions to Ask Your Mortgage Modification Lawyer

Before hiring a mortgage modification lawyer, here are some important questions to ask to make sure you find the best fit for you and your situation.

1. Have you ever worked with my mortgage company?

• Some mortgage companies are more difficult to negotiate with than others. It’s important to know if your mortgage modification lawyer has successfully modified a loan from your lender.

2. How much will this cost?

• You are seeking help from an attorney because you are in a challenging financial position. You don’t want to get into a tight spot after obtaining counsel because you didn’t ask upfront how much the process would cost. Getting answers to your mortgage modification questions is crucial for your financial stability, but expertise does come at a cost.

3. How long is the mortgage loan modification process?

• Answering this question is important because mortgage lenders may move quickly toward foreclosure if you get behind on your mortgage commitment. This is another reason why hiring a mortgage modification lawyer is so important because they are aware of the timeline of the proceedings and can also negotiate so that you have more time to change your loan specifics.

4. Is bankruptcy a better option?

• At first, it may seem that mortgage modification is a better choice than bankruptcy, but this is not always the case. If you are still unable to keep up with your mortgage payments after it is modified, you are only prolonging the inevitable bankruptcy. Discuss how the two options will affect your credit score and future buying power. Asking your attorney these questions will help you decide what your best option will be to protect your assets and your future.

5. Will you use ‘violations of law’ as a negotiation tactic?

• As is true with many types of negotiations, there is an “easy way” and there is a “hard way.” Typically your loan can be successfully modified using traditional tactics. But occasionally the mortgage lender is unwilling to work with you to find a solution. In this case, your attorney will carefully go through your loan details looking for violations of the law and unjust tactics in the original contract. If any violations are found, your mortgage agreement could be declared null and void. Whether or not your situation could come to this, knowing that your attorney is willing to take these steps assures you that they will do whatever it takes to reach the best possible outcome for you.

Mortgage Modification Experts at Sawin & Shea

If you need to renegotiate the terms of your mortgage, contact the attorneys at Sawin & Shea, LLC. We can answer all of your mortgage modification questions and protect you and your assets from creditors. We’ve helped numerous Indiana residents modify their home loans, and we’re ready to help you. 

Contact us today at 317-759-1483, or you can schedule a FREE consultation with an attorney here. 

The post Questions to Ask Your Mortgage Modification Lawyer appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

Fortunately, filing for bankruptcy offers debt relief to help you get your finances back in order, but you’ll need to avoid certain pitfalls when filing, such as overspending or accumulating more debt.

Here’s what you need to know about getting through the holidays during bankruptcy. 

Don’t Accumulate Any More Debt

If you’re already in the middle of filing for bankruptcy, any new debt that you accumulate will not be discharged. This includes credit card debt, so try to avoid racking up a substantial balance this season.

Those who are about to file for bankruptcy should also avoid accumulating substantial debt. Many debtors make the mistake of racking up more debt before filing because they figure that they’ll be able to discharge it. This is even more common during the holiday season because people spend a great deal on travel plans, gifts, and food. 

When you have a sudden increase in debt leading up to filing for bankruptcy, credit card companies may object to your bankruptcy discharge. They may even argue that you committed bankruptcy fraud, which is a federal felony. Those found guilty of bankruptcy fraud could face up to a five-year prison sentence and up to a $250,000 fine. 

Don’t Purchase Expensive Luxury Items

Although some holiday expenses are unavoidable, you should definitely avoid spending over $600 on a single luxury purchase. An item may be considered a “luxury” if it’s a product or service that’s not necessary to support you or your dependents. If you’re not sure whether some of your purchases are considered “luxury,” consult with a Chapter 7 or Chapter 13 bankruptcy attorney. 

If you make a luxury purchase of over $600 within 90 days of filing for bankruptcy, creditors will request for the bankruptcy court to not discharge the debt. This also includes gifts, so it’s critical not to spend over $600 on any one gift.

Some debtors attempt to avoid the luxury item bankruptcy provision by taking a cash advance on their credit card, but this will also likely not work. If you take a cash advance of over $950 within 70 days of filing for bankruptcy, the credit card company will argue against your debt being discharged. 

How to Cut Down on Spending This Holiday Season

It’s best to avoid accumulating more debt during the holidays, and you can do this by creating a tight budget and by staying clear of any holiday sales that may increase your spending. 

When creating your budget, calculate how much you can reasonably spend without falling into further debt. Then, create a list of necessary holiday expenses. It’s critically important to avoid going over budget this holiday season as you prepare to file for bankruptcy or continue going through the filing process.

You can also find creative ways to reduce your spending, such as introducing a Secret Santa gift exchange in your family. That way, you’re not having to purchase a gift for every member of your family. 

Additionally, if you’re hosting extended family or friends for the holidays, you can introduce a potluck system so that you don’t need to spend as much on food. 

Bankruptcy Automatic Stay

Although you need to tighten your belt and avoid more debt this holiday season, filing for bankruptcy does provide certain protections and benefits that may alleviate some of your financial stress, such as an automatic stay. 

When filing for Chapter 13 bankruptcy, your home’s mortgage payments will be restructured into your repayment plan, and creditors will not be able to repossess your home or take legal action against you thanks to the bankruptcy automatic stay. 

With Chapter 7 bankruptcy, you reaffirm your secured debts while discharging unsecured debts. Secured debts refer to debts with collateral, such as a home or car. Most of the time, Chapter 7 filers are able to reaffirm their mortgages as long as they are not behind on payments. 

If you are behind on a house or car payment, you may want to consider filing for Chapter 13 bankruptcy. 

Contact an Indiana Bankruptcy Attorney

If you need help getting started with filing bankruptcy this holiday season, consider enlisting the services of Chapter 13 or Chapter 7 bankruptcy lawyers. Qualified bankruptcy attorneys can help you improve your financial situation and can assist you if you’re the victim of creditor harassment. 
For seasoned bankruptcy attorneys in Indiana, contact Sawin & Shea, LLC. We have years of experience helping Indiana residents become debt free. Call us today at 317-759-1483, or you can schedule a FREE consultation online here.

The post How to Survive the Holidays During Bankruptcy appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you’re considering filing Chapter 7 or Chapter 13 bankruptcy, consider enlisting the help of skilled bankruptcy attorneys. They can assist you through the bankruptcy process and can keep creditors from unlawfully harassing you.  

In order to understand the bankruptcy process, here’s what you need to know about consumer debt and non-consumer debt. 

What is Consumer Debt?

Consumer debt refers to an individual, family, or household’s debts incurred through personal spending and expenses. Some examples of consumer debt include:

• Personal credit card debt
• Store financing
• Home mortgages
• Rental furniture
• Personal lines of credit and bank loans
• Vehicle leases, which can include cars, planes, boats, and more
• Cosmetic-based medical debt
• Family or personal legal fees

If your debts have to do with personal or family spending rather than business expenses, penalties, and taxes, they are likely consumer debts. 

What is Non-Consumer Debt?

Non-consumer debts include business spending and expenses, as well as different taxes and penalties. Examples of non consumer debts include:

• Alimony
• Child support 
• Traffic tickets
• Parking tickets
• Criminal restitution
• Business loans
• Personal guarantees
• Business property mortgages
• Business-related legal fees
• Taxes

Are Student Loans Consumer or Non-Consumer Debts? 

You may have noticed that we didn’t list student loans in the consumer and non-consumer categories. The reason for this is because the student loan debt classification depends on multiple factors, including whether the loans were primarily spent on tuition, which would likely fall under non-consumer, or for daily expenses and rent, which a court would likely consider consumer debt. 

Because the interpretation of whether student debt is consumer or non-consumer is somewhat subjective at times, it’s helpful to have a bankruptcy attorney at your side who can assist you with proving a classification in court. 

How Does Consumer and Non-Consumer Debt Impact Your Bankruptcy Chapter 13 Filing?

When it comes to filing Chapter 13, your consumer and non-consumer debt classifications determine what is and isn’t protected by an automatic stay. 

An automatic stay prevents creditors and lenders from collecting debt or collateral on protected assets. With consumer debts, co-debtors receive the protection of an automatic stay. 

For example, if you co-own a house with someone filing Chapter 13 bankruptcy and the house is your primary residence, the automatic stay will protect you from a home foreclosure because it’s considered consumer debt. 

If you’re a co-signer or co-debtor on a business property, such as a rental home, the automatic stay doesn’t protect you from lenders, so they can repossess the property. 

How Does Consumer and Non-Consumer Debt Impact Your Chapter 7 Bankruptcy Filing?

Some people are required to undergo a bankruptcy means test before filing for Chapter 7 bankruptcy. This test calculates whether an individual can repay lenders and creditors without declaring Chapter 7 bankruptcy. 

Those who primarily have non-consumer debts rather than consumer debts do not need to take the bankruptcy means test.

What Does “Primarily” Consumer Debt Mean?

Only those with over 50% of consumer debts need to take the bankruptcy means test, so if your debt is primarily consumer, you’ll need to take the means test.

Although those with more consumer debt need to take the bankruptcy means test, that doesn’t mean they won’t qualify for consumer debt relief through Chapter 7 bankruptcy. 

The means test that determines your ability to file bankruptcy contains two parts. The first part evaluates whether the person wanting to file has a monthly income that’s greater than the median income for their state. If their monthly income is lower, they qualify for Chapter 7 bankruptcy.

In the event their income is greater than the state median, they must undergo a more rigorous evaluation. The next part of the test involves comparing a person’s income with their expenses. If the potential bankruptcy filer reduces their monthly income by their expenses — such as food, out-of-pocket health care, housing, utilities, transportation, and other essentials — and they multiply the monthly difference between their income and expenses by 60, the amount determines whether they qualify for Chapter 7 or Chapter 13:

• If the amount is $12,850,000 or more, the person must file through Chapter 13 rather than Chapter 7.
• If the amount is over 25% of the unsecured debt, the person qualifies for Chapter 13.
• If the amount is 25% or less than the person’s unsecured debts, the person filing can choose either Chapter 7 or Chapter 13.
• If the amount is $7,700,000 or less, they can choose either Chapter 7 or Chapter 13.

Contact Indianapolis Bankruptcy Attorneys

Navigating the complex world of filing for Chapter 7 or Chapter 13 bankruptcy can be complicated, to say the least. If you’re considering filing, take the guesswork out of the process by contacting the Indiana bankruptcy lawyers at Sawin & Shea, LLC. 

Call us today at 317-759-1483, or you can request a FREE consultation with one of our bankruptcy attorneys by clicking here.  

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Creditor harassment is unlawful, and there are many other things that debt collectors don’t want debtors to know to make it easier for them to get away with things they aren’t supposed to. 

This is why it is crucial for you as a debtor to know your rights and understand what is and is not okay when it comes to debt collection. This may be a stressful and scary time, but it does not have to overwhelm and ruin your life. Taking steps to understand your rights and the legalities surrounding debt collection can help you better navigate the situation. 

Below are the top five things that creditors and debt collectors don’t want you to know, as these tips can help you stand up for yourself against them: 

1. Debt Collectors Cannot Call Repeatedly

Initially, debt collectors will most likely try to call you several times a day, every day, and at all hours. However, you are technically in control and can dictate how and when they contact you. Constantly calling you can be construed as harassment, especially if you have already asked them not to. To ensure this doesn’t happen, record your calls and ask them to politely only contact you at your preferred method and time. For example, you could ask them to only email or mail you or ask them not to call at certain times of the day or on certain days. 

2. Debt Collectors Cannot Threaten You

In some situations, debt collectors may use intimidation tactics and threats to scare you into paying, but this is unlawful. Collection agencies are not allowed to claim that you have committed a crime and will be arrested if you don’t pay what you owe, nor can they threaten to ruin your life or shame you in public. 

By law, debt collectors can only discuss your debt with you, your spouse, or your attorney. They can contact others to track you down, but they may only ask for your address, phone number, and place of employment—they cannot discuss anything beyond that about your debt. 

3. You Can Negotiate Directly With the Creditor

Often, creditors will hire third-party collection agencies to handle their debt collection. Though collection agencies can offer to help you resolve the debt, it is sometimes better to negotiate directly with the creditor as it can result in a more affordable payment option and avoid unnecessary collector fees. 

After a debt collector has spoken to you initially about the situation, you can inform them that you are going to speak with your creditor first. However, keep in mind that if the debt is more than six months past the due date, the creditor does have the right to refuse to work with you directly. 

4. You Can Often Negotiate a Lower Settlement Amount

Debt collectors will initially try to collect all of the debt you owe, as this is their job. However, most collectors are authorized to settle on a reduced rate. In some cases, you can have the total amount of debt reduced by 15 to 35%. However, it’s important to note that settlement amounts are typically required to be paid in full. You will likely not be offered a new repayment plan but instead will be asked to pay the new reduced amount in full. 

5. There is a Statute of Limitations on Debt

You should never agree to a reduced settlement amount or a new repayment plan before checking on the statute of limitations on your debt. Debt collectors will never willingly inform you upfront about the statute of limitations, but it does exist. After so many years, debt collection can be barred and no longer allowed if the statute of limitations is passed. For example, there are cases where a debt collector may call after 5, 10, or 15 years to try to collect on a debt that is no longer valid. That debt may still exist, but they are no longer allowed to collect on it if it passes the statute of limitations.  

How Sawin & Shea, LLC Can Help

At Sawin & Shea, we believe in providing compassionate and understanding representation to those struggling with debt. If you feel that you are being harassed by a debt collector or have any other questions or concerns about your debt and how to manage it, contact the attorneys at Sawin & Shea, LLC. We can offer you guidance and support to ensure the best possible outcome. 

The post What You Should Know About Debt Collectors appeared first on Indianapolis Bankruptcy Attorneys of Sawin & Shea.

If you do find yourself having more money than expected, it’s understandable that you would want to know if an early payoff is a possibility. No one wants to be beholden to their debt if they can simply pay it off and get it out of the way earlier than expected. 

Unfortunately, paying off your Chapter 13 bankruptcy early can have consequences and might not even be possible. To understand how this works, it’s helpful first to understand how Chapter 13 bankruptcy payment plans work, which we will get into below. 

It’s important to note first, however, that every case is different and depends on your individual situation. So if you have further questions or are ever in doubt, you should consult with an experienced Indiana Chapter 13 bankruptcy attorney in your local area. They can review your case and offer you guidance on the best course of action for your unique situation. 

Chapter 13 Bankruptcy and Disposable Income

When you file for Chapter 13 bankruptcy, you enter into a court-approved repayment plan that allows you to make more affordable payments over a three to five-year period. Once a plan is agreed upon, you will sign a contract, which ensures your creditors are paid as discussed over the designated time period. 

The amount you are required to pay each month will be determined based on your “disposable income,” which is the amount of money you have left over after paying all of your allowed or reasonable monthly expenses. Thus, you cannot spend your money on just anything and then use what is leftover for the repayment plan. Allowed or reasonable expenses are limited to things like rent, food, utilities, and other necessities. 

Your disposable income can also change, which means the amount you are expected to pay for your Chapter 13 repayment plan can also change. For example, if you get a raise at work or start working another job that pays you more but your monthly expenses remain the same, this means your disposable income has increased, and thus your repayment plan amount will increase. 

Your income will also determine the time period over which your repayment plan will take place. If your income is less than Indiana’s median state income when you file, you will have to commit to at least a three-year plan. If your income is above the state median income, you will likely commit to a five-year plan.  

Paying Off a Chapter 13 Bankruptcy Early

So, can you pay off your Chapter 13 bankruptcy early? In most cases, the answer is no. This is because of what was just explained above, but there are essentially three primary reasons: 

1. You are subject to the timeframe of your contract. Just because your income has increased does not mean you can just pay everything off early. When your disposable income increases, it means your repayment plan amounts will increase, but you will still be required to make them for the entire time period that was initially agreed upon in your contract. 

2. You will not be granted a discharge. Part of the contract agreement when you file for a Chapter 13 bankruptcy is that once you have made all payments for the entire commitment period, any remaining debt will get discharged or wiped out. However, if you pay off your repayment plan early, you are essentially breaking your contract and your commitment to making payments for the three to five years, which means you are no longer eligible for your remaining debt to be discharged. 

3. Your creditors will object to early payoff. If you do want to pay off your plan early, you must not only get court approval, but you must also notify your creditors and get their approval as well. And unfortunately, most creditors will object to this. This is because they know that an early payoff means you are likely making more money, and thus they will want your payments to increase for the full duration of your commitment period rather than letting you payoff early as they get more money that way. 

The Exception to Early Bankruptcy Payoff 

The only exception to early payoff that courts and creditors will typically allow is if you pay off your initial debts in full. A Chapter 13 repayment plan means your creditors are getting less than what you actually owe. If, however, you start making enough money to pay off your original debt amounts, meaning the full amount of your debt, then your creditors will likely agree as it means they are getting 100% of their claimed amount that is owed. 

How Sawin & Shea, LLC Can Help

If you have questions or concerns about your Chapter 13 bankruptcy, the team at Sawin & Shea can assist you. Call our office at 317-759-1483. We understand how confusing, overwhelming, and even scary filing for bankruptcy can be, and we are dedicated to helping our clients achieve the best possible results. 

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